Business entropy

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Chapter 1 - Our Worldview

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Understanding Business entropy

Let's start with an example from physics. When you place a glass of water in the refrigerator, there is more order in the water when it fouls. But feel the back of the fridge, and you will notice that it radiates heat. The total movement of air due to radiated heat is always more significant than the reduction due to the freezing of the water.

Think of what is called the administrative burden. The administration aims to reduce variation (from an excel list to an ERP package). Yet, time and again, people complain that the workload is increasing. This increase is business entropy. You can think of examples from the operational side of the business.

Businesses that grow and sustain themselves, typically invest in interventions that stimulate creativity, alignment, brand awareness, training, and/or innovation and receive focus from these activities. They try to create stability by recreating business culture, systems, and processes as this is critical for growth and sustainability. But, at the same time, they encounter entropy in an ongoing fashion as collateral damage to their efforts.

A saying exists: "in business, the most efficient system dies first". Movement, creativity, innovation and time (change) stops when everything is fixed.

Entropy is inevitable, even in business. We can only be aware of it and try to find ways to minimise and reuse the "lost energy".



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