The Homeostatic Organisation/ Organism — The Innovation Show
“No structure, even an artificial one, enjoys the process of entropy. It is the ultimate fate of everything, and everything resists it.’ — Philip K. Dick
Homeostasis refers to the maintenance of relatively constant internal conditions in an organism. For example, we maintain an average body temperature of about 98.6°F (37°C). In a cold environment, we shiver to return to our ideal body temperature. We fan ourselves or find other means to restore homeostasis in a warm climate. This delicate balance within biological systems is the hotbed of existence.
In our 9-part series, Mark Solms tells us homeostasis is linked with entropy. Entropy is the natural tendency of things to lose order and fall into chaos. Entropy is a measure of disorder. The laws of entropy make ice melt, batteries lose their charge, billiard balls come to a halt, and hot water merge with cold.
Homeostasis runs in the opposite direction. It resists entropy. Homeostasis ensures we occupy a limited range of ideal states, like a perfect body temperature. To the astute reader, you will realise that our bodies need a consistent energy supply to maintain homeostasis and resist entropy. Energy is either useful or useless, depending on its ability to work. For instance, coal energy can generate heat, boil water, and power engines, but energy is lost at each stage. As useful energy depletes, system entropy increases, reducing its work capacity. This decrease explains why our bodies eventually decline.
Since resisting entropy requires energy, we must consciously create it. We exercise to prevent muscle loss, learn new skills for job relevance, and innovate to stay competitive in a market. As Mark and I discuss, homeostasis is not exclusive to biological organisms. Organisations, in their essence, are living entities too. They breathe, grow, adapt and strive to maintain their version of homeostasis. Organisations, like organisms, must continually reinvent themselves and regenerate energy to achieve homeostasis.
Organisational energy stagnates when organisations often enjoy decades of relative stability in their core business. In such cases, experienced managers may have little experience (or interest) in thinking big, formulating strategy, or driving change. If you think of people as molecules of energy, they dissipate and find areas of the business where they can do the least amount possible. Bureaucracy grows like a bacterial plaque throughout the organisation. The lifeblood of the organisation clogs up and becomes less effective. Information flows become inefficient, like varicose veins. In effect, the organisation atrophies.
The only way to keep the organisation alive is to add energy, excite the molecules (people) and align their energy once again. This brings the organisation (like any organism) back to homeostasis to continue operating efficiently. In my book, “Undisruptable”, I call this necessity for constant energy: permanent reinvention. In keeping with the theme of this Thursday Thought, it is more like permanent regeneration.
In times of exponential change due to technological progress and artificial intelligence, we need to input more energy into our careers, skillsets and organisations than ever. Growth cannot happen without a continuous supply of energy.
When we eat, our bodies metabolize fuel and transport metabolic energy to our cells, where some energy is allocated to repairing and maintaining existing cells, some to replace those that have died, and some to create new cells to help us grow. Eventually, however, we stop growing and stabilize at a specific size. In childhood, almost all of our energy is devoted to growth and relatively little to maintenance, whereas beyond maturity, it is dedicated to maintenance, repair, and replacement.
Now, let’s take this sequence of events as an analogy for how growth occurs in a company. In the early entrepreneurial years, almost all the energy is directed into the growth and stabilisation maturity of the company or business model. The collective energy generated by startup founders and early hires is apportioned to developing new business models, hiring new people and developing and marketing the startups’ products and services.
Once the company is mature, energy is inevitably assigned to maintain the status quo and the entropy (or waste product) of growth. The bigger the organisation, the more entropy. In a large company, entropy comes from bureaucracy, operational inefficiencies and disgruntled employees. Any energy that might have been previously used for growth is required for maintenance. This is the bane of many corporate innovators who have to squander their energy on bureaucracy rather than growth.
Homeostasis keeps organisms alive by performing effective work. Therefore, if entropy entails the loss of the capacity for (productive) work, the end is nigh. For example, many incumbent organisations sit out the regeneration of their industry: media and retail. Others lean on regulation to protect them: banking and healthcare. While many victims f disruption claim there is little they could have done, they did little more than atrophy. They might have generated new energy by leveraging long-standing relationships with suppliers, customers, and advertising outlets to fight off the upstarts. Instead, they adopted new technologies and emergent business models resentfully, if at all. They were spectators as their assets eroded in value and became liabilities, pulling them deeper into chaos.
The most basic function of living things is to resist entropy. Organisations that resist change become the victims of entropy. By resisting change, they upset the balance of biological systems and tip the scales of homeostasis towards entropy.
Thanks for Reading
Find that series with Mark Solms on YouTube here, and paid subscribers receive the show notes for each episode.
Originally published at https://theinnovationshow.io on August 17, 2023.
