Entropy Scan

/Entropy Scan
Entropy Scan2021-01-15T09:25:29-08:00

Introducing the Organizational Physics Entropy Scan Survey

How do you take qualitative feedback from your team and turn it into the right set of quantifiable insights and actions—and then measure progress over time?

Regardless of company size or business model, every leader is faced with the same 3 core organizational challenges:

  • Signal vs. Noise: What are the environmental signals we should pay attention to and which ones are the noise we should we ignore?
  • Effectiveness vs. Activity: Where should we allocate our finite time and energy in order make the most impact, rather than just spinning our wheels?
  • Diversity vs. Dissonance: How do we best gather diverse perspectives yet avoid dissonance by aligning around the right set of objectives and key results (OKRs)?

These challenges are ongoing. Meaning, the scope and details may change but the job never ends. Savvy leaders always strive to find the signal in the noise, to align the company around its greatest improvement points, measure progress, and continuously gather diverse perspectives. They do this in a way that builds shared consciousness and commitment on what to do next and why, and get it done fast.

The greater the rate of growth and change, the faster the increase in complexity, and the harder it is to manage all of these tasks. Why? Because even if the leader has what they believe to be the true picture themselves, they still have to communicate and align with others. No single individual can solve the organization’s greatest internal challenges alone. Certainly one individual can and should be accountable for each core objective or key results, but it will still take a cross-functional team to resolve them. So the real question is, how?

If you resonate with how I’ve described the perpetual challenges of leadership, you owe it to yourself to take the Organizational Physics Entropy Scan Survey for a 14-day free trial.

The Organizational Physics Entropy Scan Survey was created out of my own experience as a CEO and later facilitating several hundred global leadership teams to identify and align on the root cause of their organizational challenges and resolve them.

You can think of the Entropy Survey as a proven root-cause diagnostic tool that allows your organization to systematically scan for potential improvement points in a way that cuts through the noise, ignores the non-essential, and reduces dissonance. With a little bit of training and support (included in your paid subscription), the Entropy Survey can catalyze sustained and measurable performance gains over time.

However, because it is not a typical approach to change management, it does require a deeper understanding of the principles behind it. Let me set the stage by explaining entropy.

What is Entropy

“… if your theory is found to be against the Second Law of Thermodynamics I can give you no hope; there is nothing for it to collapse in deepest humiliation.”
— Sir Arthur Eddington

The most fundamental truth in the universe is that every organization has finite energy in time. Period. This is why you need to breathe and eat. It’s why you need connections with family and friends and stimulation from Netflix and social media. It’s why your business needs new sales and capital. If no new energy is coming in, that system is going to fail. Every isolated system fails.

The reason why an organization needs new energy from outside itself is because entropy, the universal force that causes things to fall apart, is always present. The greater the entropy within a system, the more internal problems it has, and the harder it is to grow, evolve, and make progress as an organization.

In case this concept isn’t fully clear yet, I’ll share a metaphor for entropy that may aid in understanding: If your organization was a ship instead of a business, then entropy would be akin to having a hole in the hull. The bigger the hole, the more problems this causes along the journey. It’s hard to sail fast and far when you’re constantly taking on water, right?

Wise captains understand that a leaky vessel doesn’t repair itself. It gets more leaky over time. Therefore, they have protocols to sniff out where sources of entropy (energy drains, friction, problems) are emerging within all aspects of their ship, operations, and crew. If they notice an issue starting to emerge, then they are fierce at rooting it out. If successful, that frees up more energy and capacity to drive external gains. Why? Because they’re no longer wasting energy dealing with sub-optimal operations, environment, or crew.

The ship is a metaphor, but the same principle holds true across every business. Every system has finite energy in time. If an organization has to spend more if its finite time and energy bailing water or identifying and resolving the root cause of problems, or if it misses the early signs of key problems emerging, then it’s not going to be successful. In fact, it will soon sink.

What is the Entropy Survey?

The Entropy Survey provides a periodic scan for entropy emerging across the most critical functional areas of your business. These areas include: the level of throughput and production, sales and repeat sales, brand awareness and market clout, innovation and disruption, metrics and insight, strategic clarity and priorities, staff recruiting and retention, shared vision and values, communication and teamwork, structure and accountability, processes and systems, and quality and efficiency.

The Entropy Survey is sent out to a cross-functional team (we recommend you start with your Leadership Team) of 12 to 18 leaders, managers, and other key organizational influencers. The reason why the survey group is limited in size is that this isn’t a “fire and forget” survey or an anonymous pulse survey. This is an in-depth survey (it takes about 45 minutes to complete) and it is designed to catalyze a powerful discussion with the survey team afterwards. One that leads to deep strategic and tactical insights and alignment on the plan to address the biggest sources of entropy harming the organization. About 12 to 18 people is a large enough survey group to provide the necessary inputs, but not so large that it is unwieldy to manage. If there is a need to scan deeper or wider, multiple survey groups can be created.

When to Run an Entropy Survey

At a minimum, I recommend that you run an Entropy Survey about once every nine months with your Leadership Team and other key managers or influencers. This should be done at least 3 weeks prior to your annual or bi-annual strategic planning session or before any major change initiative such as an organizational redesign is launched.

The reason why the survey should be based around these tent poles of strategic planning and/or a major change initiative, is that the data and insights from the Entropy Survey are priceless inputs to have going into the strategic planning or organizational change initiative. Without it, there’s a real risk of missing the right new key strategic imperative, misreading the root cause of internal challenges, not building enough shared consciousness across the team on the real focus areas, or not giving enough credence to under-looked areas of the organization that are causing high entropy and are about to cost the organization big-time.

The reason you don’t need to run an Entropy Survey on a shorter cadence is that the biggest sources of entropy—the biggest problem areas and potential improvement points that the survey uncovers—will require assigning a project leader and cross-functional support team to resolve them. It usually takes two to three quarters to show meaningful progress on these initiatives, so there’s not much need to survey faster than this cadence.

How to Quickly Go From Noise to Signal to Insight

Here’s how the process works. An Initial Survey is sent out to the survey group and their responses and scores are tabulated for you to use in the upcoming strategic planning or change initiative kick-off. The results of the Initial Survey are presented in such a way as to take the team through a series of deeper and deeper insights. Basically, they see the responses as a series of charts or maps that go from Noise to Signal to Insight.

The first map is “Noisy” by design. It’s their un-patterned individual scores and responses. It’s not obvious to the team seeing this data for the first time what is causing what and why the team members have such seemingly diverse views. “O” in the center means no entropy, no problems, no room for improvement and “5” on the perimeter means high entropy, big problems, and big opportunity for improvement:

Noisy Entropy Map—Individual Scores

Initial Entropy Map showing individual responses. It is “noisy” by design. 0 in the center equals no entropy, no problems, no opportunities for improvement. 5 at the edge equals high entropy, big problems, big opportunities for improvement.

Guided by the assigned in-house facilitator (there’s a facilitator’s guide and training and support included in your paid subscription), the team briefly discusses their initial reactions to seeing their responses laid out this way. Common responses are, “Huh? We’re really that far apart?” Or, “I definitely see a close grouping in some areas but a wide divergence in other areas. I wonder what’s going on?” Any type of reaction is perfect at this stage because we’re not solution-finding yet.

The in-house facilitator then assigns one individual, pair or triad to silently read and summarize the team’s written responses in each category, including what seems to be working well and what seems to need improvement. Each summary is presented back to the full group. This summary is the catalyst for a powerful discussion that starts to illuminate for the team how others are perceiving different variations of the same internal challenges.

Signal Entropy Map – Avg Scores

The next map is the “Signal” map. It shows the average scores for each category based on the summary. Now, armed with a deeper shared understanding of the issues revealed in the prior map, the Signal map starts to reveal which functional areas of the business are having the most issues or pain.

The biggest sources of entropy are occurring in the biggest peaks. For example, the biggest sources of entropy for this company are the biggest peaks or the categories of Strategic Clarity/Priorities and Quality/Efficiency, followed by Processes/Systems, Structure/Accountability, Communication/Teamwork, Metrics/Insight, and Throughput/Production:

Initial Entropy Map showing average scores. The biggest peaks represent the biggest sources of entropy in this business. We’re starting to see some signal from the noise but it is still not very helpful yet.

So far, we’re getting some signal but still lack real insight. The data presented this way is not yet very helpful to figure out where this team should focus its finite time and energy in order to make a real difference.

The combination of the category summaries created by the team and the Signal Entropy map prompts another discussion and debate. We want the debate! What is causing what? Where should we focus our finite time and energy first? This is a very critical discussion. For instance, one area this organization is showing high entropy is within Communication/Teamwork. That’s a very worrisome sign. But what is causing that? Is it that there’s an apparent lack of a clear Strategy or Priorities? Is it a breakdown in Structure or Accountability? A breakdown in Processes or Systems? Do we need to do some trust falls together at some backwoods retreat? (Probably not!) What is causing what?

It’s a million-dollar question. Notice that the team doesn’t yet have shared insight about what is causing what. And we definitely do NOT want them running off prematurely trying to cure the patient but only getting to the symptoms. This would result in a lot of activity but no meaningful progress, or even worse, a failed change initiative. We want the discussions to occur but not to allow the team to get into solutions until they are presented with the next map, the Insight map.

Insight Entropy Map—Adding PSIU

The Insight map provides some much needed—well, you guessed it—insight! If you are already familiar with the principles of Organizational Physics and PSIU, this chart will instantly bring tremendous clarity and insight into what is causing what. PSIU stands for Producing-Stabilizing-Innovating-Unifying forces and it is an approach to understanding systems dynamics that show up in individuals, teams, organizational structure, and strategy. In other words, it’s the same language and lens that can be applied to all levels of a system. When we overlay PSIU onto the same Entropy Map, the light bulbs start to turn on for the team:

Entropy Map showing PSIU mapped to each quadrant. Now we’re getting to some real insight.

The 2×2 PSIU matrix that shows Producer-Stabilizer-Innovator-Unifier in each quadrant is the exact same matrix that the team receives when completing a personalized PSIU assessment on themselves, so it uniquely ties together personal development with organizational development on multiple levels. We could already see that biggest sources of entropy for this company by highlighting the biggest peaks. That was already clear. But now we can also discern which force or quadrant is having the biggest breakdowns. In this case, the Stabilizing quadrant is the most out of alignment.

What does this tell us? Well, the details are in the written team survey responses and team summary, but it is clear that there’s a breakdown happening in the Stabilizing quadrant. Meaning, there needs to be a concerted effort to bring some stability into how this organization sells, services, and delivers for its internal and external clients. This will prompt additional insights as the team starts to identify cross-connections across the categories.

For instance, look at the big peak in Strategic Clarity/Priorities in the Innovating quadrant. Does this mean that we need to Innovate more? It actually means that we need to bring some Stabilizing force to how we Innovate. Specifically, this organization needs to align on a clear and committed set of strategic priorities. Strategic clarity and priorities must get resolved first because if the strategy and priorities aren’t very clear and committed to, the organization will end up spinning in circles. It should also become clear that the organization shouldn’t Stabilize or Unify for their own sake, but rather to Produce and Innovate better and faster. Meaning, the left half of PSIU matrix needs to support the right half, not the other way around!

Looking at the company’s potential improvement points in this light starts to reveal all of the interconnections across the organization. Maybe you can already start to discern the interconnections between all four quadrants? These interconnections and their implications become more clear in the facilitator’s training and guide. They will also up-level the team’s awareness that they don’t exist in isolation. They exist in interconnection with their peers.

What Happens When You Don’t Track Entropy

It seems pretty obvious that every company needs to take a holistic approach to organizational transformation, right? And that’s the thing. Each survey participant was seeing the same problems but coming at them from their own vantage point. Operations sees it from an ops perspective, Marketing from a marketing perspective, Sales from a sales perspective, etc.

Without the insight that you can derive from the Entropy Survey process, this cross-functional team might have the impression that they’re not actually closely united when they actually are! What’s been missing is a catalyst to get the team on the same page, speaking the same language, and to build shared energy and commitment to solve their biggest problems in the right sequence.

Without the insights provided by the survey data, the maps, and the team discussion, it is very likely that the status quo will continue or deteriorate, with your team lamenting and legacy problems persisting. A leaky vessel gets more leaky, so plug the root cause!

How to Track Progress Over Time: The Comparison Survey

About nine months after the initial survey is a good time to run a Comparative Survey that compares the company’s progress against the prior survey’s potential improvement points and also identifies the new potential improvement points. Meaning, the reward for a job well done is to be able to work on a higher class of problems. The result is a Comparison Survey that looks like this:

The Comparison Entropy Map shows progress over time and also where to focus next.

What has happened in this company over the past 9 months? Notice the gap between the old areas that were causing the most entropy before (in black) and the current sources of entropy (in blue). This company has made rapid progress in clarifying its strategic priorities and in bringing some Stabilizing force into play. This allowed them to increase throughput and quality, improve communications and teamwork through a new structure and approach, and streamline its metrics and decision making. Life is better for almost everyone working in this business compared to nine months before.

But what should the new focus be? Notice that entropy hasn’t decreased and has even increased a bit in Innovation/Disruption? Did the company fail in this area? No! Every organization has finite energy in time. If it had tried to engage in aggressive innovation before, it would have failed at that and most everything else because it wasn’t set-up to innovate well. It had too many pressing priorities to address in its strategy and internal environment. The entropy in these areas has now been brought down and the company finally has the capacity and wherewithal to aggressively innovate once again. This company will run another comparison survey in about 3 quarters to continue to track its progress and to highlight where it needs to focus next.

The Entropy Survey is NOT for Every Type of Captain

The Entropy Survey is not for every leader. As an illustration, imagine two competing businesses targeting the same market space with effectively the same strategy and business model. Both companies have raised gobs of venture capital, have near-equal technical capabilities and market timing, and have on paper what appears to be a team of seasoned execs.

The CEO at Company A is all about achieving top-line revenue growth, both organic and through acquisitions. CEO A personally runs a weekly deal board meeting and is focused on doing whatever it takes to win key customers. They spend a lot of time optimizing and tweaking the sales commission plan and they are constantly on the hunt for new deals as well as merger or acquisition opportunities. Basically, everything is geared towards driving increasing monthly recurring revenue and quickly achieving a high valuation and exit, either through IPO or strategic sale.

The CEO at Company B is more focused on building a high-performing organization in a disciplined way. Yes, CEO B would love to consider some acquisitions but not yet. Right now, the focus is 100% on delighting customers and building an organizational foundation to scale. As part of that effort, CEO B pays attention to signals that reveal where things are going well and where there are obstacles preventing high-quality work from getting done fast. When an obstacle is identified, the team at Company B has learned to attack the root cause—as a team—and resolve it. A key element of their approach is to teach and educate the rest of the organization on those key learnings and then move on to the next challenge on the docket. They are measuring pre- and post- progress indicators and celebrating success at each iteration. A key tool in the arsenal of CEO B is the Organizational Physics Entropy Survey.

Let me ask you, which CEO, Company A or B, do you think will come out on top in the end?

It’s hard to say, right? If market timing is good, then Company A may hit IPO or exit faster and achieve a great return for early investors. But if the market turns against Company A, either from recession or a turn in investor sentiment or a bad customer reputation, then the weakness inherent in the Company A foundation is going to reveal its cracks rapidly. You may be asking how I know that the foundation at Company A is weak? I know because they haven’t put much attention, time, or energy into building it and sustaining it as they’ve grown. It’s all been a bunch of duct tape, sleight of hand, and fire-fighting under the pressure to win and onboard the next deal.

The CEO at Company B, on the other hand, has a strategy that works in good times and bad. To aid its commitment to continuous improvement, prior to every strategic planning offsite or major change initiative, Company B runs an Entropy Survey so that it can identify where friction points and obstacles are emerging within the organization early. With a bit of training, the survey also reveals the underlying root cause(s) in a way that builds consensus and alignment. As a result, the team knows what to focus on next and why. It moves very quickly to solve the right set of high-leverage improvement points and cascades that learning across the entire organization. Each new Entropy Survey allows it to track its progress at reducing entropy over time, to identify where new sources of entropy are emerging, and why, and to resolve them.

At Organizational Physics, we exist to serve the CEO and Leadership Team at Company B. That’s why we’ve created the Entropy Survey—a powerful tool and insight to drive sustained and measurable progress over time.

Reducing Organizational Entropy is the #2 Job of Every Leader

If you think about it, the #1 job of every leader is to ensure that the organization is pursuing the right strategy and avoiding strategic follies. The reason why strategic execution is #1 is that if the environment zigs but the organization zags, nothing else is going to matter much for very long. No organization is bigger than the environment it inhabits, so aligning the company on the right strategy and driving the execution of that strategy through the team, culture, metrics, structure, etc. is always mission-critical.

But the #2 most important job of a leader is to identify where the internal entropy is coming from and eliminate it or neutralize it. Great leaders reduce entropy for everyone. Period. But this is always an ongoing battle. As the organization grows and gets more complex, entropy will naturally increase. There needs to be some scalable method to sense it early, cull the signal from the noise, and bring together a wide and diverse range of perspectives to execute fast on the right—not just the expedient—things. The answer is the Organizational Physics Entropy Survey. Sign-up below to take it for a free 14-day test drive and see for yourself.

What’s Included

When you join the program, you’ll receive access to:

  • Entropy Survey members area
  • Facilitators Guide and training
  • Dedicated account rep
  • Unlimited comparison surveys

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