Today, I had a matrix-like experience using ChatGPT. I was asked by a freelance journalist on LinkedIn if I had any comments to share about an article she was writing about culture and structure.

In light of ChatGPT’s recent beta release, I was curious to see how it would perform. So I asked it the same question the reporter asked me: “What are the symptoms of a company that needs a better organizational structure?”

I thought. “Not bad! There’s no indication as to why those symptoms occur, or what to do about them, but it’s not a bad summary by ChatGPT.”

I then took a flyer and asked it another question. “How would Lex Sisney redesign my organization structure?”

I think this summary captures my approach to changing organizational structures very well. But the thing is that I never used the term “hierarchy of purpose” in any of my writings. I had never heard of this term before reading this, so being called an expert was quite amusing. The concept sounded cool, however, and I liked it a lot. So I asked ChatGPT, “What is a hierarchy of purpose?”

Holy Toledo. My work has been defined by ChatGPT in a way I haven’t even articulated to myself. For years, I have been teaching a hierarchy of purpose model without ever referring to it as such. It’s kind of surreal.

After that, I wondered, “Who came up with this hierarchy of purpose concept and why hadn’t I heard […]

Lex Sisney is a business coach, speaker, and author who has developed a framework called “Organizational Physics” to help businesses improve their performance and achieve their goals. According to Sisney, Organizational Physics is a science-based approach to management that combines principles from physics, systems theory, and human behavior to help organizations operate more effectively.

At its core, Organizational Physics is based on the idea that organizations are complex systems that operate according to certain laws and principles. By understanding these laws and principles, businesses can optimize their performance and achieve their objectives.

Some of the key principles of Organizational Physics include:

Alignment: Aligning the goals, strategies, and actions of an organization to ensure that everyone is working towards the same objectives.

Integration: Creating a system of interconnected processes and functions that work together to achieve the goals of the organization.

Flow: Ensuring that work flows smoothly through the organization, minimizing bottlenecks and delays.

Resilience: Building an organization that can adapt to changing circumstances and remain effective over time.

Performance: Measuring and tracking key performance metrics to ensure that the organization is achieving its goals.

Overall, Organizational Physics provides a holistic and scientific approach to managing organizations, helping businesses to improve their performance, increase their resilience, and achieve their goals.

As I write this, #ChatGPT4 has just been released in beta. I am asking it questions about my work and philosophy for scaling companies. I thought you might find value in its concise responses. If you are inspired to gain a deeper understanding of the Organizational Physics approach to scaling-up, I invite you to check out my books and articles.

Entropy. It’s a bitch.

According to Lex Sisney’s Organizational Physics framework, entropy is a concept that refers to the tendency of an organization to become disorganized and chaotic over time if left unchecked.

Entropy is the opposite of order and represents the degree of disorder or randomness in a system. In an organizational context, entropy can manifest in several ways, such as:

Lack of alignment: When different parts of the organization are not working towards the same goals or are not following a common strategy.

Inefficient processes: When processes are slow, redundant, or wasteful, leading to delays, errors, or frustration.

Poor communication: When information is not flowing freely or is not being shared effectively, leading to misunderstandings or missed opportunities.

Resistance to change: When the organization is resistant to change or is unable to adapt to new circumstances, leading to stagnation or decline.

Sisney argues that entropy is a natural tendency that all organizations face, and that it must be actively managed and reduced to ensure long-term success. He also emphasizes the importance of balancing the forces of producing, stabilizing, innovating, and unifying to counteract the negative effects of entropy.

In summary, entropy is the tendency of an organization to become disorganized and chaotic over time if left unchecked, and it is a key concept in Organizational Physics.

As I write this, #ChatGPT4 has just been released in beta. I am asking it questions about my work and philosophy for scaling companies. I thought you might find value in its concise responses. If you are inspired to gain a deeper understanding of the Organizational Physics approach to scaling-up, I invite you to check out my books and articles.

The 4 Styles. Each of us has some combination of the Producer, Stabilizer, Innovator, and Unifier styles (PSIU)

PSIU is a personality profiling tool that is part of the Organizational Physics framework developed by Lex Sisney. PSIU is an acronym that stands for four basic personality types or “energy patterns” that people can exhibit in a workplace setting:

Producer: People who exhibit the Producer energy pattern are focused on getting things done and achieving tangible results. They are often competitive, action-oriented, and driven to succeed.

Stabilizer: People who exhibit the Stabilizer energy pattern are focused on creating stability and maintaining order in the workplace. They are often detail-oriented, process-driven, and risk-averse.

Innovator: People who exhibit the Innovator energy pattern are focused on generating new ideas and pushing the boundaries of what is possible. They are often creative, visionary, and unafraid of taking risks.

Unifier: People who exhibit the Unifier energy pattern are focused on creating harmony and building relationships in the workplace. They are often empathetic, collaborative, and skilled at conflict resolution.

Sisney argues that by understanding the PSIU energy patterns, managers and leaders can better understand the strengths and weaknesses of their employees, and can leverage these patterns to build more effective teams and organizations. He also emphasizes the importance of creating a balanced team that includes representatives from each of the four PSIU energy patterns, as this can help to ensure that all aspects of the organization are properly addressed.

As I write this, #ChatGPT4 has just been released in beta. I am asking it questions about my work and philosophy for scaling companies. I thought you might find value in its concise responses. If you are inspired to gain a deeper understanding of the Organizational Physics […]

The purpose of this article is to talk about the launch and growth of your second business unit, which could be a new product line or a new geographic market that complements the core or original product line or market.

The main point I want you to take away from this article is this: If your company is having trouble launching and growing its second business unit, then you likely need to address a design flaw in the original or core business unit first.

My own experience as a CEO was that I struggled to lead the launch of the second business unit against the incessant demands of the core business because I didn’t understand this concept well enough.

A majority of my coaching clients are looking for help with launching their second unit, whether it’s a new product or new market, while thinking that things are going pretty well in their core unit. They just need some guidance on launching the second. But after diving into the situation, the client CEO quickly realizes that for the second unit to thrive, the core unit must first evolve.

Since this issue is not well understood, I hope to shed some light on it in this article and share my approach to solving it.

The Health of the Mother Determines the Growth of the Child

Fundamentally, what you’re trying to achieve with the launch of a second business unit is to have the “mass” of the core business executing swiftly and profitably against changing external and internal conditions and with enough capacity and wherewithal to simultaneously pilot, nail, and scale the second unit.

What I didn’t appreciate fully until I had been through it as a CEO myself is that despite all our attempts to free up the […]

I’m pleased to announce that a new, revised edition of Organizational Physics is now available in international hardcover, Kindle, and Audible.

What’s New in the Revised Edition

When I set out to write Organizational Physics ten years ago, I knew then that its underlying principles were sound. I had both the experience of using them as a CEO and as a business scaling coach to other CEOs. I could identify parallels spanning across disciplines as diverse as business, nature, sports, and the laws of physics. My thinking then, and still today, is that if I can spot a principle that cuts across domains, then I can take it to the bank.

In publishing this revised edition, I’m happy to say that the original principles I introduced in the first edition of this book have not changed. On the contrary, my appreciation for their pervasive power and influence over every aspect of life, business, and society has only deepened.

The primary changes between the first and revised editions are that, in addition to updating the graphics and typeface, I’ve added five case studies that provide insider accounts from other CEOs of what it’s really like to scale a business, its ups and downs, and how to leverage Organizational Physics principles to your sustained advantage.

I want to express my sincere gratitude to the CEOs who contributed these case studies, to the many others who contributed testimonials, and to all the clients I’ve coached over the past decade. You make my work possible, and it is transformative because of you.

To new readers, I hope you enjoy and get lasting value from the revised edition of this book as thousands of other business leaders have […]

Lex Sisney @ Commission Junction: The Llama Farmer Who Popularized Affiliate Marketing

EPISODE DETAILS
Lex Sisney shares the story of how he built Commission Junction, the world’s biggest affiliate marketing network. Listen.

SHOW NOTES
Affiliate marketing, in case you don’t already know, is a core part of how “free” websites make money on the Internet. Websites with lots of visitors post ads. When visitors click those ads and buy something from the advertiser, that advertiser pays what’s called an “affiliate bounty” to the website owner.

That might not seem revolutionary, but it was a huge innovation in the way companies could market and sell their products. Prior to affiliate marketing, startups needed large advertising budgets just to get launched. However, thanks to affiliate marketing, startups had a way to sell products without paying any money up front, and that opened the door to tons more entrepreneurs.
Since the concept of affiliate marketing was first invented in the mid-90s, plenty of affiliate marketing networks have been launched. But the biggest and most successful one has been Commission Junction. And, on this episode of Web Masters, we get to hear from Commission Junction founder, Lex Sisney, the man who went from shoveling llama poop on his mother’s farm to launching the world’s preeminent affiliate network.

My friend @DavidNilssen has just launched his new pod cast #thefutureisborderless and I was the sacrificial first guest. :-) David is a perpetual learner and I’m excited for the results. In this podcast, we discuss the big ideas behind my new book Designed to Scale. You can subscribe and listen to The Future is Borderless below. Enjoy.

YouTube – THe Future is Borderless on YouTube

Spotify – The Future is Borderless on Spotify

iTunes – The Future Is Borderless on Apple Podcasts

I found the recent employee petition to fire senior leaders at Coinbase—including the President & COO, Chief Product Officer, and Chief People Officer—quite fascinating. If you haven’t seen it yet, it’s worth a quick read. There’s a hidden reason these three roles are being targeted besides their seniority.

To summarize the petition, as the crypto market has collapsed, some members of the employee base are pointing fingers at leadership and calling for the ousting of the President & COO, Chief Product Officer, and Chief People Officer as the primary culprits for the company’s issues. I am sure that there are long-held grievances behind this petition that are only now coming to light because of the stress and fracturing caused by the crypto market collapse.

Certainly, a big part of Coinbase’s problems is that they prematurely scaled and over-hired. They are now laying off 18% of their workforce and that may not be the end of it. Coinbase isn’t the first hyper-growth company to make the mistake of presupposing sustained market demand, and it won’t be the last one either. But what remains unrecognized is that Coinbase actually has some some classic flaws in its organizational structure that are contributing to its breakdowns.

The employees don’t recognize these structural flaws—only the symptoms—so they are pointing fingers at these leaders to get them ousted. CEO Brian Armstrong doesn’t recognize these flaws either, so he is pointing fingers right back at the employees to “grow up or get out.” The irony is that, if these structural flaws remain, the leaders may change but the underlying issues at Coinbase will remain.

None of these structural issues that I’m going to point out are very apparent during the good times. In fact, many of Coinbase’s […]

Subkit did a nice interview of me this week under Go Solo. One piece of advice that I would share with new aspiring coaches, and that I didn’t mention in the article, is to have a process to take clients through. Meaning, don’t sell yourself. Sell your process. Of course, having a process doesn’t mean there is no flexibility in the client engagement. Every client is unique. But the process itself provides the architecture to deliver results for each client. Anyway, having a process to follow isn’t something that I fully appreciated when I launched my coaching practice twenty years ago. It’s one of those things where the value is only fully realized in hindsight and I would consider it essential. Hope this concept helps others in their own coaching journey.

SWOT is a solid framework for strategic planning. The concept is pretty simple and has been around since the 1960s. The idea behind it is that, to achieve operational excellence and drive the right strategy, you should assess your organization’s internal Strengths and Weaknesses and its external Opportunities and Threats (SWOT).

I like the SWOT analysis framework a lot. However, if you’re like me, you may have found that the actual usable outputs from a SWOT analysis have not been as effective as you had hoped. The “data” ends up being bullet points. The “insights” don’t reveal the root cause. The process generates a lot of opinions but it can feel harder than it should be to align the team on concrete action steps based on a SWOT analysis.

It’s time to solve these problems. It’s time for an evolution of the SWOT. What might this look like?

After working with several hundred companies around the world, I have developed two powerful tools that you can deploy immediately to take your SWOT Analysis to a whole new level.

I call them the Entropy Survey and the Top-Level OKRs Strategy Survey. Here’s a high-level summary of what you can achieve with them and how they relate to SWOT:

• Use the Entropy Survey to better assess your company’s internal strengths (S) and weaknesses (W).
• Use the Top-Level OKRs Strategy Survey to better assess its external opportunities (O) and threats (T).

These two tools each complement the other. Using them provides three big advantages when compared to a traditional SWOT analysis:

1.  It allows for better and faster data gathering.
2.  It provides powerful mental models for your team to visualize its strengths, weaknesses, opportunities, and threats.
3.  It identifies the root cause of problems so that […]