The Complexity Tax

Let’s imagine a small business. Twelve people. Healthy margin, growing top line, customers who renew without much drama. On paper it’s the kind of company you’d congratulate someone for building.

Now look at a Tuesday.

One client is invoiced on a different cycle because a founder agreed to it over dinner two years ago. One product line has a pricing exception that only one person can explain, and she’s on holiday. Onboarding has four steps written down and roughly nine steps in practice. Two customers get a monthly report that isn’t offered to anyone else, assembled by hand, because at some point someone asked nicely. Nobody remembers who approved that. Everybody keeps doing it.

None of this appears in the numbers. The P&L shows revenue, cost of goods, payroll, a margin you can be proud of. It does not show that the person holding the whole thing together answers eleven Slack messages before lunch that all begin with “quick question — how do we usually…”

That gap has a name worth using: the complexity tax.

It’s a tax because you pay it whether or not you agree to it, and it’s assessed on activity rather than income. Every exception, every undocumented workaround, every special case that lives in one person’s head is a small recurring charge against the business’s capacity to think. It doesn’t take money. It takes attention, which is the scarcer input.

The unpleasant part is how it’s collected. Not in a lump sum you can plan around, but in fragments. Three minutes here. A re-explanation there. A decision that should have taken an afternoon and instead takes nine days, because the person who has to make it is also the only person who knows how the invoicing exception works.

I’ve watched myself pay it. My own process was, for a long time, held together by memory and habit. I knew what to do next on any given account because I’d done it a hundred times. That felt like competence. It was actually a liability with good posture — the whole thing was legible to exactly one person, and if that person had a bad week, the process had a bad week too.

Here’s the part that makes it compound rather than merely annoy.

Complexity is added by people solving real problems. That’s the trap. Nobody introduces an exception out of carelessness. A client needs something slightly different, you accommodate them, the deal closes, everyone’s happy. Each individual exception is defensible. It’s the accumulation nobody signed off on.

And accumulation is quiet. You don’t get an alert when your business crosses from “a few special cases” into “the special cases are the system now.” You just notice, gradually, that everything takes longer than it used to and nobody can say precisely why. New hires take six months to become useful instead of two. Small decisions get escalated because the rules aren’t written anywhere, so everything feels like it might be a judgment call. Things start falling through the cracks — not dramatic things, just a follow-up here, a renewal there — and the response is always to try harder rather than to look at the machine.

Trying harder is how the tax rate goes up. More effort applied to a tangled process produces more tangle.

The tell is almost always exhaustion that doesn’t match the workload. If the volume is flat and the fatigue is climbing, you’re not looking at a demand problem. You’re looking at friction, and friction is a process question wearing a people costume.

So what actually pays it down.

Write things down. That’s it. That’s the unglamorous whole of it.

Not a policy manual nobody opens. Not a documentation initiative with a kickoff meeting. Just: the next time you explain how something works, write the explanation instead of speaking it. Then send the written version. You’ve done the same work and produced an asset instead of a conversation.

Do that for a month and something interesting happens. The act of writing a process down exposes the parts that don’t survive contact with a sentence. You’ll get halfway through describing your approval flow and realise there isn’t one — there’s a person who says yes. That’s a finding. You couldn’t have found it any other way, because the process only looked coherent while it lived in your head, where the gaps get filled in automatically.

Documentation is a diagnostic disguised as an administrative chore.

Then comes the harder move: delete. For every exception you’ve written down, ask what would break if it stopped. Sometimes the answer is a client relationship, and you keep it and price it properly. More often the answer is nothing — it’s a fossil from a situation that resolved itself in 2023 and the ritual outlived the reason.

A business is allowed to retire its rituals.

None of this is about becoming rigid. The goal isn’t a company where nothing bends. It’s a company where the bends are deliberate and visible, so you can see what they cost. An exception you chose and wrote down is a decision. An exception that accreted is a leak.

And there’s a compounding effect in the other direction too, which is the genuinely fun part. Every process you write down clearly becomes a process you can hand to someone else. Every process you can hand to someone else becomes a process you can improve, measure, or eventually take off a human’s plate entirely. You can’t automate a workflow you can’t describe. You can’t delegate one either. Documentation is the precondition for both, which means the boring month of writing things down is what buys you every good option that comes after.

I’d take that trade every time. Not because writing procedure is enjoyable — it isn’t — but because the alternative is a business that only runs at the speed of whoever is most tired.

If you want a place to start, pick the question you’ve answered most often in the last two weeks. The one that makes you sigh slightly before you type the reply. Write the answer once, properly, somewhere findable. Then notice how often you send the link instead.

That’s one line item off the bill. There will be others.

I’d genuinely like to hear what your most expensive one turned out to be — the exception you found when you finally wrote it down, and whether you kept it or killed it. Tell me. I collect these.