Warren Buffett and Secrets of Management - 57
The thought of simplicity concerning running a business is easy enough to understand, and it is a crucial aspect of success in the products or services we offer. But there is an underlying importance related to simplicity that is a huge factor in the success of Buffett and Berkshire Hathaway (BRK-A).
For Buffett, he doesn't find it too hard to figure out what the value of a business is. Where the problem comes in is when the future cash flow of the company is estimated. He handles this in a couple of ways:
The first thing he does to greatly enhance his success in projecting what future cash flows will be, is to stick with businesses that are simple and easy to 
understand and stable in what they offer.
Second, a key determining factor in if he will buy the company, is if there is a margin of safety between what the purchase price is and what the value of the company is determined as being; both now and in its predicted future cash flows.
Simplicity is far more important than thinking of something easy (although that's an important part of it) because it's crucial to the effectiveness of management to be able to accurately project future cash flows that will help them to make decisions today.
If something is not able to be projected out into future, as far as cash flow goes, than you're just rolling the dice and hoping for the best. We can be much more accurate than that.
If you want to create new things that are difficult to know whether they'll produce predictable cash flow in the future, keep them as part of the experimental part of the company and understand its place.
Other Buffett Resources:
Warren Buffett: The trouble with being a legend
Warren Buffett: 'I told you so'
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