structure Archives - Organizational Physics by Lex Sisney

Where Are Your Energy Drains?

According to the laws of physics, your success is determined by how you manage energy – and there’s a universal success formula to prove it. Quite simply: success is a function of integration over entropy. Your goal is always to have high integration and low entropy. In “How to Choose the Right Strategy“, I explained how to create high integration in your company. What gets too little attention in business, however, is the havoc that high entropy plays on a system. It truly is the ultimate killer. Or as physicists Sir Arthur Eddington aptly put it in the early 20th century, “The law that entropy always increases holds, I think, the supreme position among the laws of Nature. If someone points out to you that your pet theory of the universe is in disagreement with Maxwell’s equations — then so much the worse for Maxwell’s equations. If it is found to be contradicted by observation — well, these experimentalists do bungle things sometimes. But if your theory is found to be against the second law of thermodynamics I can give you no hope; there is nothing for it but to collapse in deepest humiliation.”

So if there’s anything you should be doing in your business that you’re probably not focused enough on, it’s cultivating an awareness of entropy and a commitment to reducing it. Personally, I didn’t appreciate the significance of entropy in my own business until I ran into it. Hard.

In 1998, at the age of 28, I co-founded an affiliate marketing company in Minnesota and moved it to Santa Barbara, California. By 2001, the company was soaring like a rocket, generating incredible growth rates (much easier to do for a small company than a […]

By Lex Sisney|2021-05-18T05:49:57-07:00February 27th, 2012|

The Misaligned Organization and What to Do About It

In 1993 I was a college student in St. Paul, Minnesota. I drove a twenty-year-old canary yellow Toyota Corolla with bald tires, a broken heater, and a misaligned chassis. Because my spending priorities then were the necessities of college life (pizza, beer, girls, and rent), I never invested in making the car safe to drive.

Navigating that car on the icy roads of thirty-below Minnesota winters required a certain ability to go with the flow. But eventually, my refusal to to replace the tires and align the chassis caught up with me. Driving late one winter night … it’s easy to guess what happened. Wipe out. Crash. Car totaled.

Thankfully, no one was hurt.

I share this story because it’s easy to tell when a car is misaligned. The car squeaks, there’s friction and a loss of power, and it’s difficult to steer where you want to go. Similarly, if you know what to look for, it’s easy to tell when your business is misaligned. If you act early on, you can avoid a crash and even improve performance fast.

What It Means to Have an Aligned Organization

Well after I had sold that old Toyota, I received some more equally important lessons on the value of organizational alignment. In my late twenties to mid-thirties, I personally led two companies into compound annual growth rates (CAGR) exceeding 5,0000% per year. From startup to $4M and $12M in two and four years respectively. While this may be chump change to some entrepreneurs, these periods of rapid growth were priceless learning for me. They also provide a valuable lesson that’s applicable to companies of all sizes and at all lifecycle stages. […]

By Lex Sisney|2021-05-18T05:21:42-07:00February 10th, 2012|

Mastering Team-Based Decision Making

Every business has mass, which is a measure of its resistance to change. The challenge in getting an organization to change direction is the fact that its mass isn’t neatly self-contained. Rather, it’s scattered throughout its people, systems, structures, and processes – and the collective inertia causes resistance to change. In order to get the organization to execute on its strategy, you’ve got to get the mass contained and headed in one direction.

Having aligned vision and values, as well as an aligned organizational structure, is the first step. If you have misalignment in these areas, then no matter what, you’re not going to get very far. At the same time, alignment in vision, values, and structure alone won’t cause the business to move. They just help to hold the mass together and keep internal friction low. Making the organization come alive and move quickly in a chosen direction requires that two things be done well: making and implementing decisions. In fact, the secret to organizational momentum lies in continually making good decisions and implementing them quickly.

The Most Important Process in Your Business

Every business relies on multiple processes (sales, customer service, finance, product development, marketing, etc.). These can be highly visible or nearly invisible, organic, haphazard, detailed, flexible, constant, or changing and either a boon or a burden. When a process is performing well, it allows the work to get done better and faster. When it’s not, you feel like you’re swimming upstream.

While your business has many different processes – some working well and others maybe a total clusterf#@*k – it’s the process of decision making and implementation that’s most critical to your success. Why? Because at the most fundamental level, a business […]

By Lex Sisney|2021-05-18T05:23:17-07:00January 24th, 2012|

The 5 Classic Mistakes in Organizational Structure: Or, How to Design Your Organization the Right Way

Is your organization designed to be a rocket or a parachute? If I were to ask you a random and seemingly strange question, “Why does a rocket behave the way it does and how is it different from a parachute that behaves the way it does?” You’d probably say something like, “Well, duh, they’re designed differently. One is designed to go fast and far and the other is designed to cause drag and slow an objection in motion. Because they’re designed differently, they behave differently.” And you’d be correct. How something is designed controls how it behaves. (If you doubt this, just try attaching an engine directly to a parachute and see what happens).

But if I were to ask you a similar question about your business, “Why does your business behave the way it does and how can you make it behave differently?” would you answer “design?” Very few people — even management experts — would. But the fact is that how your organization is designed determines how it performs. If you want to improve organizational performance, you’ll need to change the organizational design. And the heart of organizational design is its structure.

Form Follows Function — The 3 Elements of Organizational Structure & Design

A good design supports its purpose. There’s a saying in architecture and design that “form follows function.” Put another way, the design of something should support its purpose. For example, take a minute and observe the environment you’re sitting in (the room, building, vehicle, etc.) as well as the objects in it (the computer, phone, chair, books, coffee mug, and so on). Notice how everything serves a particular purpose. The purpose of a chair is to support a sitting human […]

By Lex Sisney|2021-05-18T05:25:49-07:00January 9th, 2012|

The Physics of Fast Execution

If you want to execute fast, gather the mass. Let’s do a thought experiment. Imagine that you’re standing in the middle of a racquetball court surrounded by four walls. At your feet is a soccerball. First, notice how the soccerball just tends to sit there. That’s called inertia. In order to get the ball to do something, you have to apply a force to it. In this case, you give it a kick and the ball rolls along the floor, bounces off the wall, and careens in another direction before coming to rest again. Next, you walk and retrieve the ball and bring it back to the center of the court, place it on the floor, and this time, you give it a really hard kick. What happens? The ball rolls even faster across the floor, bounces off the wall with more power, and travels further in a new direction than the first kick. In essence, you just experienced all three of Newton’s laws of motion.

Newton’s three laws of motion will shed light on the speed and direction of your organization. If you want to move your organization forward quickly in a chosen direction, you should understand these laws and how they apply to business execution. Put another way, if you want to be successful, work with – not against – the physics.

The First Law of Motion

Newton’s first law of motion is about inertia. Inertia is a recognition that an object will tend to do what it’s been doing, unless acted upon by an imbalanced or outside force. In our thought experiment, that’s why the ball tends to stay at rest in the middle of the floor until you do something, like give it a kick. Inertia works in both […]

By Lex Sisney|2023-02-20T10:23:37-08:00December 13th, 2011|

The Stabilizer Style

The Stabilizer is focused on how to do things and working methodically to get them done the right way. To get an immediate sense of the Stabilizer’s qualities, think of a very structured, process-oriented person who likes to analyze the data before making a decision. This person is highly organized, has outstanding attention to details, and takes their time in their words and actions. That’s a Stabilizer. If you put this person in a rowboat and say, “row!” What will they do? Well, first they’ll analyze the rowing mechanism and plan the most efficient stroke. Then they’ll want to understand where they are rowing, for how long, what the best route is, when the water and food breaks will occur, and the prevailing winds and currents. Once everything is planned in detail, with two contingency plans in place, then they’ll start to row!

The Stabilizer has a tremendous ability to find better, more efficient ways of doing things. They excel at organizing, planning, controlling, and systematizing things. They create order out of chaos and usually have outstanding retention of pertinent details. The Stabilizer tends to value control over freewheeling innovation, unless that innovation can be analytically justified. They have little patience for errors, sloppiness, or anyone or anything violating a defined process or procedure without good cause. A Stabilizer is methodical and makes decisions based on analyzing the data and finding more efficient solutions. Naturally, it takes time to gather and analyze data and to understand the intricate details involved in a decision. Consequently, the Stabilizer moves at a deliberate pace in their thoughts, words, and actions.

The Big S

When the Stabilizer trait is overly high, we call it a Big S. A Big S is like a bureaucrat that […]

By Lex Sisney|2024-03-13T03:04:17-07:00November 14th, 2011|

The Stages of the Execution Lifecycle

Navigating your company up the execution lifecycle ¹ and keeping it in optimum shape is a great challenge. This article will show you how to do it successfully.

The stages of the execution lifecycle become easier to understand with a little pattern recognition. Basically, every business must shape or respond to its environment and it must do so as a whole organization, including its parts and subparts. If it doesn’t do this, it will cease to exist. Recognizing this, we can call out four basic patterns or forces that give rise to individual and collective behavior within an organization. They are the Producing, Stabilizing, Innovating, and Unifying (PSIU) forces. Each of these expresses itself through a particular behavior pattern. The combination of these forces causes the organization to act in a certain way.

Just like the other lifecycles, the execution lifecycle exists within a dynamic between stability and development. The basic stages of the execution lifecycle are birth, early growth, growth, and maturity and, from there, things descend into decline, aging, and death. The focus within the execution lifecycle should be to have the right mix of organizational development and stability to support the stages of the product and market lifecycles. That is, the lifecycle stage of the surrounding organization should generally match the lifecycle stage of the products and markets. If it’s a startup, the surrounding organization is the entire company. If it’s a Fortune 500 company, this includes the business unit that is responsible for the success of […]

By Lex Sisney|2021-05-18T05:37:49-07:00October 28th, 2011|