Designing the Intentional Organization
The role of entropy in organization design
Organizations are human-made systems for accomplishing some kind of change in the world (which we helpfully shorten to “work”). Accomplishing work is a deliberately vague term I’m using to encapsulate all organizational productivity. Work is what happens when the people within an organization are able to direct their attention and energy into activities that help the organization achieve its overall purpose. This process of “accomplishing work” isn’t something that an organization can just figure out once and simply replicate forever. Successful products and services are shifting targets. Customer tastes and preferences change. Market dynamics change. Economic and political conditions change. An organization cannot be conceptualized as a static entity while everything else going on around it and within it is in a constant state of flux.
Therefore, there is no perfect business model. There is no perfect structure. There is no perfect way to hire or manage or promote or otherwise manage humans. There are only less and more effective ways to do these things at a specific point in time and given your unique context.
The organizations who have figured this out on the most basic level are the ones aren’t finding themselves drowning under the relentless surf, but the ones who seem to be riding the waves to new heights. They know that what they’ve figured out today can possibly be what holds them back in the future. They know they must constantly refine their ability to seek out and make sense of useful information (information that originates both within their own walls and from outside) and then use that information to adjust and change themselves. They seek out and constantly evolve their operating system to optimize for these two forces: they are Intentional Organizations.
One way to understand this process of noticing, digesting, and using information is to look at the extremes of potentially dysfunctional organizations: Entropic and Negentropic Organizations.
All systems have a natural tendency toward increasing entropy when left undisturbed. A teenager’s freshly cleaned room will become cluttered unless energy is inserted in the form of cleaning it. An ice cube will turn from solid to liquid if held in your warm hands. A campfire full of solid logs will become gas, ash, and heat — all of which are forms of matter and energy with greater entropy than the structurally organized logs. What is structured and orderly will trend toward unstructured and disorderly. On an infinite time scale, this results in the heat death of the universe. On a much shorter time scale, it can result in the heat death of organizations.
Organizations succumb when they react poorly to increasing or decreasing entropy. When entropy increases, alignment begins to fall apart, communication becomes more infrequent and ineffective, and any sense of shared purpose uniting teams and individuals fades away. Teams and individuals begin to spin off and do their own thing without any coordination. There is often frenetic energy found in the halls and in the conference rooms but it doesn’t translate into actual value for the organization or its customers. There may be a lot of energy and movement but it is not organized into anything coherent. The organization struggles to make sense of what it’s experiencing externally (such as technological trends in the market) or internally (the sense of frustration among the software developers) because there aren’t any mechanisms to do so. Busyness becomes a badge of honor and burnout is rife. Teams become intensely inwardly focused while moving faster than ever — a recipe for disaster. Eventually, all this frenetic energy escapes and only the smoking hull of what used to be a productive organization remains.
When leaders sense they are in an uncomfortably entropic environment they can be tempted to overreact. They fight against this dissipation of energy, this impending chaos, by doing what they can to create rational structure, policies, and processes. They create explicit incentives and punishments to create or remove behavior they think is counter-productive. They create and tinker with organizational structure they hope will bring rationality to what otherwise feels uncomfortably chaotic. They create yearly budgets and quarterly reports and never ending status update meetings. Ultimately, this deep fear of entropy causes them to try to lock down as much movement as possible. Lock the entropy in! Don’t let it escape! If they swing too far the other way they try to freeze the organization into an ice cube they are deathly afraid to let melt. They seek the opposite of entropy, negentropy, by investing and storing energy in the organization. They create what I call the Negentropic Organization.
Unfortunately for them, overly Negentropic Organizations seem stable and rational until they are hit with something unexpected or novel. What once seemed stable and rational can quickly change into the chaos and discord, or, if the unexpected force is extreme enough, the complete failure of the organization itself. Think of an ice cube (a perfectly rational and stable Negentropic Organization) being tossed into a cup of hot soup. That stability and rationality dissipates and dissolves quickly, leaving nothing of the original structure behind. Negentropic Organizations seem equally stable and rational until they suddenly have a disruptive new competitor, a key leader unexpectedly quits, a civil war across the world disrupts their supply chain, or a political election turns economic forces against you. If you can guarantee these things, or others like them, will never happen then feel free to pursue the Negentropic Organization. Otherwise, you’re better off looking for something else.
Obviously, neither situation is ideal. Entropic Organizations are too busy moving quickly and chasing every new idea to have the discipline to notice what’s happening around them. On the off chance that some seed of insight lands within the organization, it’s quickly overwhelmed before it can grow. Negentropic Organizations are so insular and rigid that they don’t even try to notice, or even ignore, what’s happening around them. On the off chance some seed of insight or innovation lands within this type of organization, it’s usually choked off by bureaucracy and “not invented here” syndrome.
Instead of shooting for an organizational ideal at either end of this entropic continuum, we’re better off looking for something that can fluidly move along this continuum. An organizational design that can both respond to threat and harness opportunity. A design that retains some of the fluidity and excitement of the Entropic Organization and also some of the rationality and calm of a Negentropic Organization — while avoiding the pitfalls of each. What we’re looking for is the Intentional Organization.
Intentional Organizational Design
Because organizations are comprised of human beings, they have a secret weapon for combatting the forces of entropy and negentropy — the deliberate use, cultivation, and stewardship of human attention. Many systems that face entropy don’t have the benefit of adjusting themselves over time to deal with the forces. A rock on the ground, if left undisturbed from human hands, is going to experience the forces of erosion until it is dispersed into individual grains of sand. A tidy house left undisturbed will accumulate dust and will eventually fall apart. A human organization, though, can move and modify itself to better incorporate and respond to the forces it’s experiencing. This force starts with attention and is characterized by how it’s treated by the leaders, structures, routines, habits, rituals, and unstated assumptions about how work is done. In other words, the organization’s operating system.
The Intentional Organization doesn’t have a specific structure or compensation model or hiring process or anything else. Instead, it has a specific practice around noticing, making sense, and experimenting that allows it to change itself over time. Not change itself because external consultants said so or a leader has a hunch (or needs to do something to distract the board from a bad quarter) but because the people within the organization, from the top leadership to the lowest-ranks, are smart, caring, and capable. When given the support and proper environment they can perceive the world around them and try new ways of working in response to what they are sensing. The Intentional Organization is characterized by the design of this virtuous cycle and not necessarily any specific idea or practice they may adopt.
As you might imagine, then, most of the work we do at The Ready is about helping organizations get that virtuous cycle going. That means helping our clients get better at asking and taking action on three types of questions:
- How do we become more aware to what’s happening around and within us?
- How do we make sense of what’s happening around and within us?
- How can we make it simpler and easier to change ourselves based on this information?
First, Get Good at Noticing
All organizational change starts with awareness. Awareness that something isn’t quite right. Awareness that there may be better ways of doing something. Awareness that it’s impossible for us to have reached some sort of ideal state of equilibrium and therefore there must be something we could do to get better. For the Entropic Organizations, it means slowing down and making sense of all the energy and movement. It may mean adopting some guardrails and structure that helps us slow down and notice what’s happening. For the Negentropic Organization, it means expanding our awareness outside of our immediate surroundings or situation and trying to notice what is happening around us.
How to Get Better at Noticing
1. Experiment with a deliberate operating rhythm. A good operating rhythm has time for retrospection and reflection built into it. It lets you offload good habits to the operating rhythm instead of relying on human willpower alone.
2. Practice. Practice noticing when you’re feeling frustration, apathy, excitement, or engagement. What is happening in your organization when you feel these ways? Notice your own feelings and talk to your colleagues about what they’re noticing, too.
3. Start by stopping. Create space to breathe and think. It’s hard to pay attention when you’re constantly moving at top speed. Stop doing things you’ve always done and notice what happens. If nothing bad happens, and you suddenly have more time to think and work deeply, then consider making the change permanent.
4. Experiment with transparency. Is there internal information that would help your team or org be better that they don’t have access to? More information available to more people means more people potentially becoming aware of something useful. For example, try setting up a weekly “ask me anything” session with your team and see what conversations emerge. Or, challenge your team to have more conversations as a group as opposed to 1:1. Or, share slightly more information than you’re used to sharing and see if anything bad happens.
5. Use the OS Canvas to identify tensions and opportunities that exist in your operating system.
Then, Get Good at Making Sense of What You’ve Noticed
After becoming aware of potentially useful information that’s bouncing around the halls or in the environment around us the next step is to make sense of it. Sense making is what allows us to connect these bits of interesting information to the larger aim of using them to somehow make ourselves better. It’s all about approaching this newfound information with a mindset of curiosity and exploration instead of fear and aversion. Our sense of what’s possible expands and internal motivation to move closer to that possible future begins to fill that vacuum. In both Entropic and Negentropic Organizations the desire is to have more conversations and build a shared sense of what is possible. Entropic Organizations are overwhelmed by motion and speed — there’s no time to make sense of what’s going on. Negentropic Organizations don’t really have any sense of the future being any different than the present, so why spend any time thinking about what could be different? In both cases, sense making happens when people feel safe to ask why, reason from first principles (instead of organizationally accepted analogy), and feel hopeful that a new future is possible and desirable.
How to Get Better at Making Sense of What You Notice
1. Build a prioritization practice. Most orgs treat prioritization like a one-time event. True prioritization is an ongoing conversation and should evolve as you get better at noticing and learning.
2. Talk about purpose. The benefit of a purpose articulation exercise isn’t just the finished statement — it’s in the process of creating it together. Getting clear about your team or org’s purpose gives you a new lens for making sense of what you notice.
3. Cultivate an environment of psychological safety. Getting excited about a better future isn’t going to happen if people feel like they’re going to be ridiculed for doing so.
4. Seek external inspiration. Other organizations are doing fascinating things in terms of how they work. What do you think about these practices? Could any of those ideas work at your org?
5. Use the OS Canvas to talk about potential future states in each part of your operating system.
Finally, Get Comfortable Trying New Things (and Repeat)
Once we’ve become aware of useful information and made sense of it (which are both ongoing processes, not one-time events), then we need to have mechanisms for enacting change within our organization. Consuming new information through awareness and sense making is only helpful to the extent it allows us to change ourselves for the better. Awareness and making meaning are the fuel, a process for experimenting or trying new ways of working, being, and organizing are the engine that allows change to happen.
In this case, the engine takes the form of experimenting with new ways of doing things. Individuals, teams, and teams-of-teams learn how to pilot new ideas and determine whether it’s bringing us closer to the type of organization we want to be.
Then, once we’ve started changing, we’ve made it possible to notice new information that can further drive our growth. As we grow and learn we become more sensitive to information that is useful. It’s the difference between someone who never listens to classical music and a professional conductor listening to the same Mozart symphony: the person who has greater expertise will notice things about the musicthat the uninitiated can’t even hear. It’s the same way for teams who care about getting better and have been growing together for a long time. They notice things that a new team didn’t even know was a thing they even had the option of noticing.
Intentional Organizations make it easy for experimentation to happen. They have cultures where failure isn’t feared and finding new and better ways of doing things are celebrated. They have minimal organizational debt so that new ideas aren’t strangled by bureaucracy. They trust their people to use their judgment, stoking the first of intrinsic motivation whenever possible.
How to Get Better at Trying New Things
1. Organize an org debt bounty program. Finding and removing org debt is incredibly motivating and creates space for new ideas.
2. Build a repeatable process for trying out new ideas and sharing the results. Teach leaders and teams ways of conceptualizing experiments, tracking their progress, and learning from what they’ve done.
3. Use the OS Canvas to prioritize which parts of your OS need experimentation first.
4. Seek individual coaching to cultivate self-awareness and ways of leading that go beyond hierarchical command-and-control forms of leadership.
Getting on The Path to Intentionality
“The Ready Way” is that there is no “The Ready Way” other than teaching an organization to get this virtuous cycle started, sustained, and scaled into their basic way of operating. There is nothing off-the-shelf that we can prescribe and install.
We start the work with Entropic and Negentropic Organizations the same way: we teach them to be deliberate with their attention. After that, the work unfolds differently while being united by the same basic structure: developing the organization’s ability to notice useful information, make sense of how that information could make them better, and ultimately use that information to change its own operating system. The portfolio of solutions changes as the organization itself changes. There is no silver bullet. There is no hack or shortcut. The work is the work and it only starts when the leaders and the people within the organization jump into the mud with us.
We call The Ready an org design consultancy but what we really are are guides, advisors, coaches, instigators, and allies in the ongoing and infinite struggle against organizational entropy, whether you’re experiencing too much or too little of it. We help tame the Entropic Organization and energize the Negentropic Organization. We show you how to step into and own your own Intentional Organization operating system. Are you ready?
Did you know that The Ready founder, Aaron Dignan, recently finished a new book all about how organizations can change the way they operate? If you’re interested in the future of work movement, the work we do at The Ready, or simply how to make your own organization better, then you should definitely pre-order your copy of Brave New Work today.
I publicly shared an early version of this article and received incredibly valuable feedback from the following folks: Lauren Frankfurt, Mack Fogelson,Spencer Pitman, Alastair Steward, Todd Hoskins, Jon Lukin, Chris Donnelly, Ben Brubaker-Zehr, Nicole Martin, Lyndsey LaBontee, and Tim Casasola. They are all very bright people who pushed me to refine my thinking in a way that made this article much better thanks would have been.