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Viable, Vulnerable, Doomed

Unless an org is subsidized without regard to its performance (e.g. a government agency, a pure corpocracy overhead unit like HR), it must both explore and exploit to retain its existence. Leaders explore the unknown and managers exploit the known, so competence in both these areas is required for sustained viability.

Exploitation is characterized by linear thinking (projecting future trajectory solely based on past trajectory) and exploration is characterized by loop thinking. Since these two types of thinking are radically different and prestigious schools teach linear thinking exclusively, all unenlightened orgs have a dearth of loop thinkers. Sadly, the number of linear thinkers (knowers) increases and the number of loop thinkers (unknowers) decreases as the management chain is traversed upward. This is the case because linear thinkers and loop thinkers aren’t fond of one another and the linear thinkers usually run the show.

The figure below hypothesizes three types of org systems: vulnerable, doomed, and viable. The vulnerable org has a loop thinking exploration group but most new product/service ideas are “rejected” by the linear thinkers in charge because of the lack of ironclad business cases. Those new product/service ideas that do run the gauntlet and are successful in the marketplace inch the org forward and keep it from imploding. The doomed org has an exploration group, but it’s just for show. These orgs parade around their credentialed rocket scientists for the world to see and hear but nothing of exploitable substance ever comes out of the money sucking rathole. The viable org not only has a productive explorer group, but the top leadership group is comprised of loop thinkers too – D’oh! These extraordinary orgs (e.g. Apple, Netflix, Zappos, SAS) are perpetually ahead of their linear thinking peers and they continually (and unsurprisingly) kick ass in the marketplace.

What type of org are you a member of?

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  1. May 15, 2010 at 1:04 am

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