Every growing company adds things. A new product line for a big customer. A special pricing exception. An extra approval after one bad contract. A weekly meeting to fix a coordination problem. A second tool because the first one couldn't do one thing.
Each addition was reasonable on the day it was made. Almost none of them ever get removed. Over a few years, the company ends up paying to maintain decisions that no longer earn their keep. That cost doesn't show up as a line item. It shows up as slower work, thinner margins and a leadership team that feels busy all the time.
Revenue gets measured. Complexity doesn't.
A product can bring in revenue and still lose money once you count the support, inventory and attention it takes. A customer can be "strategic" and still consume three times their share of service capacity. A report can be individually useful and collectively part of a reporting load nobody reads.
The problem is that every item has a defender. Nobody defends the total.
Where the tax hides
- Variety. Too many products, service tiers, markets or customer types for the size of the company.
- Handoffs. Work that touches five people when two could do it. Every touch adds a queue and a chance for something to drop.
- Exceptions. Custom terms, one-off processes and "just for this client" workflows that the team has to remember.
- Overhead. Meetings, approvals, layers and tools that survived long after the reason they were created.
Picture a company that keeps hiring coordinators because projects keep slipping. When they map one project, it turns out to have eleven handoffs and four approvals, and two of the approvals exist because of a mistake made years ago. Another coordinator won't fix that. Removing six handoffs will.
One question for every item
Go through your products, customer exceptions, recurring meetings, approvals and tools, and ask: if we were designing the company today, would we deliberately add this?
Then put each item in one of four buckets: keep, simplify, consolidate or kill. Most teams find the "kill" bucket is bigger than expected, and that it hurts less than they feared.
Just as important: decide what you won't add until the simplification is done. The next hire, tool or product line should go into a simpler business, not on top of the current one.
What to do this week
- List every recurring meeting and approval and who owns it.
- Map one core process from start to finish and count the handoffs.
- Pull your bottom 20% of products or customers by contribution, not revenue.
- Kill one meeting, one approval and one exception before Friday.
- Freeze one planned addition until you've seen what the simpler version needs.
Complexity Tax
Complexity Tax scores complexity pressure across variety, handoffs, exceptions and overhead, estimates the directional economic drag, and sorts what you carry into keep, simplify, consolidate and kill, with a list of what not to add yet and a 30-day simplification move.
Better before bigger. Remove what's already consuming margin before you add more.
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Danny Feldman is a 3× founder and the advisor behind Feldman Advisory. He founded and scaled Stellar to $100M in annual revenue across 15 states, raised $55M+ as a founder, and used AI to double revenue before exiting to private equity. Earlier, he recruited and trained 55,000+ sales reps at Cutco and grew a division from 1 to 58 locations. Operator to operator, he now helps founders of $1M–$20M companies get out of the middle of the business, build the leadership team, and raise capital. Book a 30-minute call →