Newton understood something profound about matter –and it is equally true for human systems and behavior.

In any system, over time, entropy increases. It applies in our organizations, our strategies, and our lives.

In general, whether a company or your closet, something that is organized will lose its order over time. And the more disorganization there is, the more energy is diverted away from the system’s intended purpose.

But the way disorganization happens is random. In fact, the very nature of entropy is random.

If you buy a new bicycle every component has been expertly machined to minimize friction. Entropy is very low. But, as you ride the bike, those surfaces in contact with each receive microscopic damage. Each grain of sand or grit or unknown substance that mixes with the oil, creates disorder in the system. Where before, the chain was uniformly lubricated to glide smoothly over the gears, tiny changes reduce that smoothness.

If you don’t clean, adjust, replace, lubricate and calibrate, over time, the bicycle’s function degrades until the chain jumps loose when you shift gears.

Entropy is Ubiquitous

No system is immune—whether mechanical or human.  

While the concept of entropy originated in physics, it has been used to describe similar phenomena in other domains.

For example, the concept of “Social entropy” was coined by Kenneth Bailey. In broad terms it suggested that over time, entropy would cause people to become less cooperative, and eventually, less happy. Later, another social scientist took that idea further  and suggested that in societies, entropy takes the form of individuals breaking rules and laws. Each infraction is like the mud on your bicycle chain, a random occurrence that reduces order.

One way to think about organizations is as a group of people operating within a set of rules that govern behavior. Those rules range from cultural conventions to dictates about business priorities. A shared convention may dictate how fast to respond to an email or that people don’t wear torn jeans.

But we can also think of the strategy as the set of rules for prioritization and focus—dictating how you spend time or make decisions about projects.

Initially, when you devise and disseminate your strategy— whether with a balanced scorecard or using OKRs and KPIs— you launch an organized system. To as great an extent as ever likely occurs, everyone knows what to do, and is working on the right things.

Strategic Entropy

But over time, entropy creates random particles of disorganization.

Imagine an apothecary scale. At moment 0, immediately after the strategy is deployed, the two dishes are perfectly level.

But, no sooner have you noticed that perfect balance than the forces of entropy begin.

·       The critical marketing initiative is at a standstill because the focus group results are late. So, new campaigns are stalled. The old campaigns don’t match the new strategy, but they’re deployed anyway.

·       One product manager prioritizes a pet project that fell off the roadmap. Her team is now working on the wrong thing. The initiative they should have been working on is languishing.

·       The head of HR gives notice, forestalling the addition of the new strategy to the onboarding materials.

When Entropy Endangers

About 20 years ago I was engaged to consult to a large multinational corporation that was confronting a scandal concerning its CEO. He had joined the company 18 months earlier to public fanfare. But now, ethical lapses emerged in a media exposé that revealed an extramarital affair with a subordinate.

This scandal was not just about one individual. The lack of clear and transparent standards for behavior was equally lax in their manufacturing. Their products, if faulty, could lead to the deaths of both civilians and military customers. And recurring quality lapses suggested that both were probable.

Over the course of a year-long engagement my team helped them craft a new strategy and set of core values. When I left they had a robust set of processes to teach, monitor and innovate around those values—as well as the structure to catch and ameliorate lapses early. 

For about 5 years their reinvention seemed to be working. The company became an exemplar of ethical performance, and with that change in orientation, their stock value rose.

Over the last year, I have noted news items about them go from good, to mediocre, to ominous. From the outside, it looks familiar.

The result of unimpeded entropy can be shambolic,

Entropy Eats Value

In any human endeavor, there is no actual benefit or value until long after the initial idea. That’s especially true in strategy.  Value comes long after “Eureka”.

But sustained attentiveness and cultivation doesn’t come with the dopamine hit of a brilliant insight. It takes rigor and consistency to stem the entropic force.

Building a new skyscraper is exciting and awe-inspiring. Maintaining its elevators, ducts and plumbing is hard and boring.

Strategy lives or dies in the months following its creation. Sometimes, that death comes as soon as everyone checks out of the hotel after the off-site.  

But more often, the strategy decays in the months after everyone learns about it, gets their department KPIs and personal performance metrics.  Between that day and 10 months later, the artifacts of strategic alignment that had so much promise devolve. Instead of acting as a lens on the strategic progress, those metrics and performance reviews are a tedious ritual of compiling spreadsheets.

The strategy is a zombie.

Scorecard Vs Strategy

Part of what’s happened here is that we have focused solely on the scorecard—forgetting what game we’re playing.

Entropy easily gets a foothold when leaders fail continuously to breathe life into the vision that the strategy is intended to fulfill. 

The excitement of that first unveiling of the strategy isn’t mysterious. People are inspired by the massive vision of the future—and they are personally moved by their own connection to it.

But, when we depend on management reports to keep that alive, we have provided a poor stand-in for the source of the inspiration. It isn’t the measurements that inspire us. It is the vision and the ways in which we ourselves are bringing it into existence. [click to tweet this thought]

It’s easy to fall into the trap of believing that a brilliant execution plan will deliver the strategy. And yes, the structure is necessary to fulfilling strategy. But it is not sufficient. 

The connections between metrics and strategy, and the ongoing inquiry into what our strategy implies in terms of prioritization, decision-making, and behavior, must never languish. It is dynamic—an ongoing Socratic dialogue between every member of the organization, led by leadership.

People will break rules. They will mis-prioritize. Employees may quit—even critical ones. Contractors will deliver late. 

And, each of those moments is an opportunity to revisit the vision.

Those are forks in the road where a left turn allow entropy to hasten the strategic decay—but a right turn will strengthen and reinforce the strategy.