In nature, phase shifts are dramatic. Think of water: ice is solid and rigid, water is fluid and adaptable, steam is expansive and high-energy. You can’t manage ice like water or steam. Each phase has very different characteristics which require different management models, insights, and skill sets.

The same applies to your business. As it grows, it too goes through predictable phase shifts, and the management models, insights, and skill sets that brought you to the current stage aren’t applicable to the next.

So how can you use this insight to your advantage?

The most important thing is to be able to recognize the shift between one phase and another.
The Organizational Physics Strategy Map is my favorite tool for doing this. It lays out where your business, markets, and products are at in their development now. In addition, it indicates if you are in step with your current phase or not.

Here’s the map. Can you use it to identify your business’ current stage and next phase shift?

Phase shifts are like the transformation of water. Each stage—Pilot It, Nail It, Scale It, Milk It—requires a different mindset, skill set, and approach. Recognize these shifts and adapt. Remember, you can’t manage water like you manage steam or ice. Each phase demands its own strategy.

To learn more about navigating business phase shifts, here are two good places to start:

1. Read the Mastering Lifecycle Strategy white paper
2. Complete a Top-Level OKRs Strategy Survey with your leadership team

When it comes to building a high-performing team, there are two prevalent camps of thought. One believes the secret lies in hiring qualified people, offering competitive compensation, career development opportunities, and a slew of “free” perks like vacation days, ping-pong tables, work-from-home options, and free snacks. However, this approach often leads to a sense of entitlement rather than true engagement and performance.

The key to genuine high performance lies in a very different environment. It starts with a crystal-clear purpose and strategy for the business. Each team member must have a defined role that aligns with their intrinsic motivations, skills, and style. Total compensation should feel fair and equitable, and individuals need a high degree of autonomy over how they achieve their work.

The real kicker? The design of the system itself determines how people show up and perform. A well-designed organization attracts the right talent who thrive in that environment and naturally weeds out those who don’t fit. You don’t need free food and ping-pong tables to motivate people. Instead, create a workplace where talented individuals are excited to bring their best selves to the table.

Great companies don’t mimic others; they create unique environments that demand high performance. The right people will be drawn to such an environment, while the wrong ones will opt out. Focus on what truly matters: clear purpose, aligned roles, healthy compensation, and autonomy. This is the formula for building a high-performing team.

It’s time I made entropy my friend instead of treating it as my enemy.

For much of my career as a coach and author, I’ve preached the gospel of integration over entropy. Drawing on the first and second laws of thermodynamics, I’ve often illustrated entropy as the villain and integration with the environment as the hero. In my book, Organizational Physics: The Science of Growing a Business and the Universal Success Formula, I show how Integration over Entropy is the ultimate barometer of success and happiness. My intention was clear: to teach leaders how to identify energy drains—symptoms of entropy—so they could plug those drains, creating more capacity for integration, innovation, and positive outcomes.

However, upon deeper reflection, I realize I’ve been caught in a dualistic trap. I’ve categorized energy gains like Love, Flow, Success, Harmony, Growth, and Development as positive, and energy drains like Fear, Discord, Inefficiency, Corruption, and Disintegration as negative. As a systems thinker, I pride myself on recognizing that most situations involve managing polarities and trade-offs, rather than solving black-and-white problems. Yet, in this instance, I missed the mark.

Embracing Entropy as a Positive Force

It’s time for me to put entropy in its proper place as a positive force for change. In the physical world, all systems eventually succumb to entropy. Death, decay, and disintegration are natural parts of the lifecycle. Without death, there would be no room for new life to emerge. Old systems give way to the new, creating opportunities for progress and renewal.
Consider the natural world: a forest fire, while destructive, clears the way for new growth. Similarly, in our lives and organizations, entropy points the way to “problems,” which in turn are opportunities for improvement. Everything is interconnected. When we view destruction as inherently bad, we […]

Have you ever found yourself seething with anger or feeling deeply upset over a situation, only to realize later that the intensity of your emotions far outweighed the actual circumstances? This is a common experience, and it serves as a powerful reminder: if you’re hot, the problem is you.

At first glance, this might sound like an oversimplification, or even an accusation. But it’s neither. It’s a profound truth that speaks to the heart of our personal growth and evolution. Our experiences in life are deeply intertwined with our consciousness. What one person perceives as a source of happiness, another might see as a reason for sorrow. This divergence in perception highlights a crucial point: life is fundamentally lived from the inside out.

The Lens of Consciousness

Our consciousness acts as the lens through which we interpret and interact with the world. When we encounter a situation that makes us angry, upset, or self-righteous—when we are “hot”—this often points to an inner state that is ready for transformation. These intense emotional reactions are signals from our consciousness, indicating areas where we need to grow and evolve.

For example, consider a situation where a colleague receives praise for a project you worked on together. If you find yourself feeling resentful or indignant, it’s worth examining why this reaction occurred. Is it because you feel unappreciated or overlooked? Or perhaps there’s an underlying insecurity about your own value and contribution? The specific trigger matters less than the inner state it reveals.

Progress Through Transformation

Recognizing that the problem lies within us is not about denying that wrongs and rights exist in the world. Of course, injustices and ethical violations occur, and they deserve to be addressed. However, it is important to observe […]

Free Resources and Helpful Links Doc shown near the end of the video in case you want them.

I hope you found this helpful. Thanks again to Vijay Sondhi, CEO of NMI for participating and sharing his perspective. Cheers, Lex

If you have a hurt shoulder, where should you focus your energy and attention to help create permanent pain relief?

Do you rely on aspirin, ice, shoulder band resistance training, or even surgery?

Or, do you consider the connective tissue that surrounds the shoulder in your neck, torso, and even all the way down to your feet?

While it might seem strange that the pain in your shoulder could be caused by an imbalance all the way down in your feet, the reality is that foot pain can cause you to lean forward or hunch over, leading to a forward head posture that strains your neck, shoulders, and back.

Everything is connected.

What about your business? If there’s pain in your business, such as friction, inefficiency, infighting, poor velocity, or substandard quality, where should you focus your energy and attention to create relief?

Do you address the pain point directly, or do you examine the interconnections that surround it?

This is why I created the Entropy Survey. It’s a root cause diagnostic tool that scans your business for internal pain points and identifies the connective tissue causing the pain.

It allows you to see the inner workings of your business through a systems view.

For example, is the breakdown in our sales function due to a poor customer onboarding process, inadequate product management, or because we are targeting the wrong types of customers?

If you don’t look holistically at the entire business, then you’ll attempt to cure the symptom but miss the underlying root cause.

Everything is connected. Look to the interconnection points and put your energy and focus there.

If operational excellence is important to you, I highly recommend taking this tool, the Entropy Survey, for a free test drive and discovering what you can uncover.

If you believe like I do that a person’s life is a reflection of their commitments, then this interactive program “Your Vision & Action Plan” is one of the most important investments you can make. It will guide you step by step to clarify and follow through on your most important commitments — those that you’re ready to make to yourself, your loved ones, your company, or whatever is truly most important to you.

The program is divided into three parts:

Part I. Your Long-Range Vision
The goal of this section is to capture the essence of what you want your life to look and feel like five years from now. Think of this section as the “why” of your life. Budget 30 minutes to complete this.

Part II: Your Annual Targets
The goal of this section is to clarify and align your most important annual targets for the coming year. Ones that will bring you closer to your vision and cover the most important topics of your life and work this year. Think of this section as the “what” of the coming year. Budget 20 minutes to complete this.

Part III: Your New Quarterly Growth Habits
Part III is about the process that you’ll implement this quarter that will ensure you achieve your annual targets and actualize your long-range vision. Cultivating a habit is a way of operating in your daily/weekly life that reinforces your desired behavior in support of your annual targets and your vision. Think of this section as the “how” for the coming quarter. Budget 30 minutes to complete this.

Click here when you’re ready to begin: https://organizationalphysics.com/your-vision-and-action-plan/

I’ve been a business scaling coach for over a decade and in that time I have learned a lot. Some big wins, some battle scars, and a deeper appreciation for taking a systems thinking approach to growing companies.

In  my coaching practice, I have a unique specialty area. I don’t specialize in a particular type of business or vertical niche. I work with companies across a range of sectors because I specialize in a specific stage of organizational development — the expansion stage, also known as the transition between the Nail It and Scale It stages.

This is a critical and usually rocky period for businesses to navigate. One the one hand, you have nailed product-market fit and growing sales. On the other, the old structure and approach—the one that got you here—isn’t getting you to the next level. How do you scale your company through this transition without losing your entrepreneurial speed and edge?

What I’ve learned is that most companies struggle with this transition. The founders or CEO feel like a bottleneck. There are strong vertical functions like sales, operations, engineering but weak cross-functional coordination. The company may have lost sight of its founding vision and what used to be fast and easy to accomplish inside the company now seems to take too much time and effort to accomplish.

Many companies (myself included when I was a venture-backed CEO) have tried to solve these problems but chose a “cure” that was worse than the original disease, setting themselves back months and years. There are folk cures such as replacing the founder prematurely and losing a powerful innovating force; or attempting a Queen of England structure, in which a single President and COO oversees the company while the founder focuses on innovation […]

https://open.spotify.com/episode/0J9RUbLkFA535t4e1QjJsi

I thought this was a fun interview. Mike and I discuss the laws of Organizational Physics and their implications to growing a business.

One of my biggest pet peeves is unproductive meetings. In fact, I dislike unproductive meetings so much that I began to study what it takes to facilitate great meetings—and meetings that matter.

Thinking through meeting design and facilitation has been my way of trying to lessen the burden and suffering that I and others experience when we’re stuck in a bad and unproductive meeting.

This list of Ten Rules for Highly Effective Meetings is born from experience and the principles of Organizational Physics. You can apply them to your own meetings and improve them by 30% or more.

Think about that figure for a moment. How much time and energy do you personally spend/waste in meetings each week? And how much does your entire company spend/waste each week? It’s likely a big and costly number.

A change in approach to how you organize and run meetings can have a dramatic impact on your bottom line. Meetings will take less time, consume less energy, and result in better decisions and faster organizational velocity.

Why Have Meetings at All

There’s a lot of noise on the internet right now telling you that the best solution to bad meetings is to get rid of meetings altogether. Slamming meetings isn’t a new trend. Here are two of history’s most prominent management gurus on meetings:

“Meetings are indispensable when you don’t want to do anything.” – John Kenneth Galbraith

“Either you meet or you work. You cannot do both at the same time.” – Peter F. Drucker

I used to be in this “get rid of meetings so we can work camp” too. But I came to a realization. Trying to get rid of meetings, or attempting to automate them away through the use of AI, is like trying to get rid of the […]