The Rise and Fall to Growth
To Bet or Not To Bet
[part 2: why]
Don't bet your future
On one roll of the dice
Better remember
Lightning never strikes twice
…
Huey LewisAntibiotics play a crucial role in defending our bodies against bacterial diseases. When employed correctly they swiftly and efficiently eradicate infections, leading to a speedy recovery within days. However, when employed for conditions unrelated to bacterial infections, overused, or used at the wrong time, antibiotics not only prove ineffectual but may also pose risks to our general well-being. Also, based on research findings, the greater the frequency of antibiotic use for treating bacterial infections the more our bodies develop resistance, diminishing their effectiveness in promoting recovery.
A similar situation is with business solutions. Each solution will address only the appropriate problem when applied at the right time with the right dosage. But it doesn’t mean that the next time with the identical problem it will work the same way. The problem may be the same but the organization has already been changed due to its dynamic nature. The dynamically changing internal and external conditions will never allow any organization to persist in the same state. The ability to adapt to those changes, i.e. adjust applied known or new solutions based on ongoing internal and external changes, characterizes the flexibility of the organization. According to known OLC models, the loss of flexibility in the organization is an indication of stagnation, bureaucracy, aging, and approaching death. That is right, as any inappropriate decision makes one or several steps (depending on how crucial the problem is) toward the organization's shutdown.
Having a framework to allow organization management to sense the internal and external changes and, based on encountered signals, adjust the power of different organizational engines for ongoing trajectory correction is crucial for the organization's survival and growth. As you may know from part one of this series we already named that framework as Organization Dynamics Control (ODC).
In this part we will focus on the evaluating importance of having an ODC framework in the organization’s management toolset. Why it may be decisive and what the possible impact could have in keeping an organization flexible and responsive to all external and internal challenges.
Known factors in organization success.
A logical start for any system evaluation is to go with an understanding of the inputs the system will have. For ODC the inputs are factors that are highly important for any organization’s success. There are several studies executed to generate models for organizations’ critical success factors, the most well-known models are Leavitt’s Diamond, McKinsey 7S, MIT 90’s. Let’s summarize them and randomly list them in one table:
The first look at this table would identify that there is no leadership in the internal and government in the external factors. This is expected, as we are not going to build the full hierarchy of factors. Also with some attention, you will notice that some of the factors in the list are more tightly connected and seem to be a member of other factor’s hierarchy. So to avoid confusion let’s consider the list as flattened organizational success factors. Each of those factors can group the measurable inputs under its own umbrella. Down the road we may need to adjust this list and add more granularity. But let’s be agile and consider this as a good starting point for the inputs’ group list. And now we are ready to continue with “why?”.
So Why?
Reviewing the critical success factors it is clear that none of them are static and have certain dynamics involved, of course with different intensities. The organization just could not survive by defining a single strategy and sticking with it for a long time frame or by becoming satisfied with the knowledge and skills level within the organization and stopping further progress. Reviewing internal success factors it is clear that based on the type of dynamics they can be grouped into two subgroups: continuous and quasiperiodic:
Such grouping allows us to come up with statements. If the dynamic is continuous then the intensity of factor change is crucial for the organization. For quasiperiodic dynamics, the periods of factor change become crucial for the organization. Those periods are specific for each organization, so they must be diagnosed and estimated. It is important to understand that all the factors with quasiperiodic dynamics should have the flexibility for different periods and intensity of changes and simultaneously possible changes in one factor could bring cascaded changes in other factors. The last part applies to factors in the continuous change segment as well. Also, it is key to mention that each revision of factors with quasiperiodic dynamics will bring to the renewal of the intensity of change for factors with continuous dynamics. When drawing parallels with OLC models those periods become stages of the organization’s life cycle where according to OLC models key factors need to be revised to support the continuous growth.
Let’s do the same exercise with external factors:
Despite the difference in factors’ distribution, the situation here is identical. But now there is a clear vision that any external factor change could cascade to all or any combination of internal factors changes including the factors with quasiperiodic dynamics. Congratulations if you have noticed. Here we have a divergence with the strictness of OLC model stages. Policy change in the country could skyrocket a business to a more advanced stage or push back to down stages.
Hope I was able to transfer all the interconnection complications and mutual influences of the factors critical for any organization’s success. I can imagine a leadership that would be able to handle this with a superset of complementary hard and soft skills. But I can also guarantee that there will be a huge stack of lessons learned, which could be most enjoyable if one of the lessons is not ‘how to shut down the organization’. Successfully managing those dynamic success factors without some framework that has a built-in concept for dynamics control is almost like betting on fortune.
For predictable and controllable growth the business community needs an organization dynamics control (ODC) framework which will give the possibility to sense the internal and external changes and adjust the controls accordingly.
Conclusion:
All great minds working on organization theory and OLC agreed that any organization is a dynamic system. However, the concern is that all linear systems are dynamical systems but not all dynamical systems are linear and describable within two dimensions. The difference in success factors’ dynamics and the complexity of their interrelations make it clear that the organization is a multidimensional nonlinear dynamical system and the two-dimensional models just will suffer to describe it.
Does business management need to review the impact of some engineering process change for effectiveness improvement on the culture of the organization? Both effectiveness and culture are an organization’s critical success factors. May the negative impact of culture change outweigh the effectiveness improvement and result in overall organizational degradation? Of course, it may. But does it mean that the particular process change for effectiveness should be canceled? Of course not. It may be revised to avoid the negative cultural impact or implementation should include the steps for managing cultural change. Sounds simple? Now put this into a whirlpool of other events.
Juggling multiple high-stakes priorities is no small feat, especially in the fast-paced world of entrepreneurship. Those seasoned leaders might have a knack for intuitively identifying and processing interrelations but throw in a competitor’s sudden product launch and a handful of other important priorities and it becomes a real test of decision-making.
And then there’s the personal side — like your family member waiting in line for fifteen minutes. It’s a delicate balance, isn’t it? Sometimes the entrepreneurial journey demands split-second decisions and an ability to navigate through a myriad of challenges. It’s like trying to conduct a symphony with each instrument playing a different tune. Ever been in a situation like this?
Navigating the complexities of organizational success without a well-designed dynamic control framework seems like quite a challenge. A team of seasoned leaders at the helm could indeed increase the odds of success. It’s akin to having expertise and knowledge in horse racing where your chances of winning are significantly improved with a solid understanding of the game. However, involving expertise and knowledge does not make any change to the fact of making bets in horse racing.
Thank you for reading. Hope to see you in [part 3: who]. Stay calm.
