Why Your Business Is Depressed
At its core, the universe is ruled by what is called increasing entropy: the growing lack of order and predictability. Or better yet, the gradual decline into disorder and chaos. Have you ever stopped and wondered why your business sometimes, frequently or constantly feels insecure, anxious or depressing?
Increasing entropy means there is nothing true being held constant and not changing. The normal pattern is toward deterioration and disorder. However, humans can work to combine materials and energy into a lower entropy state; into a state that is more organized and predictable. But even then, humans cannot hold anything constant. Everything is deteriorating all the time.
It is fascinating to look at government, society and even morality from this perspective. Or a company for that matter. If left alone, they all naturally deteriorate and can even virtually disappear.
The rule of increasing entropy literally applies to everything, everywhere all the time: On the biggest imaginable scale, for instance, the popular theory of The Big Freeze states that (if left alone ;) the universe will cool as it expands, eventually becoming too cold to sustain life.
On a smaller, more relatable scale, think about your house and how everything constantly, magically and most wondrously gets messy. It’s neither your kids, your husband or your dog who is to blame for this. It’s a natural law, the principle of increasing entropy that scatters toys and produces dust bunnies.
With this being true we need to constantly repair and refurbish our current systems just in order to keep the status-quo. If we want to improve, evolve and grow, we must embrace the fact that change is not only inevitable but in order to achieve positive change, we have to design, initiate and actively push for an advancing transformation.
The rule of increasing entropy literally applies to everything, everywhere all the time
What Does This Have To Do With Business?
In my personal experience as an entrepreneur, I only learned about this principle in hindsight. I spent years being embedded in a stalling corporate environment that identified itself with a glorified past and was at odds with its confused outlook into the future. When I joined our family business back in the year 2000 I was in my mid-20s.
I didn’t have a formal business education and secretly assumed that business worked the way everyone else was pretending it would: let’s call it the this-is-how-it’s-done principle.
I had always believed that business was a sequence of logical decisions, based on established principles, measured and supported by key metrics and guided by the firm intent of moving ahead in order to improve something. I didn’t really know anything about how things are done. I was a rookie and I had to learn. So I bought a suit and watched.
In fact, I watched for nearly 10 years. During those years our family owned, engineering and manufacturing business with almost 100 people went from stagnant to almost tanking and back to stagnant. Personally, I went from being overwhelmed by my own (perceived) inexperience to being shell-shocked from getting racked and ruined due to (seemingly) external causes, to settling into some sort of default business anxiety. While everything always looked fine and reputable from the outside, on the inside it felt like the organization was going through the stages of a zombie transformation. Slowly rotting from the inside out.
Like many other companies, ours had once started out with a promising product, hungry and eager to change the world I would assume. However, once we got to a somewhat mature stage things settled in. Somewhere during the 30 or so years before I joined the company, the mindset shifted from “advancement” to “maintenance”, and we had our extensive lineup of incremental mis-improved products to show for it. This is not to say that we weren’t somehow considered successful. To this day the company has been a highly regarded engineering and OEM manufacturing partner for many global corporates around the world and we are still considered a market leader in our, admittedly narrow, niche of timing-, sensing- and monitoring relays.
So What’s The Problem?
The problem in short: ignorance towards increasing entropy. At some point, early in the life of the company, my father had made his dent in the fabric of reality. By creating a product that was ahead of the curve and planting the seed for future growth and prosperity, he literally combined energy and materials into a lower state of entropy, thus inverting the process of deterioration. He had initiated a sequence of reactions that created a source of positive energy and gave his company momentum. However, according to the rule of increasing entropy, any organization will sooner or later decline without consistently applying counteractive measures.
30some years later, my father had long passed, the company had gotten itself stuck in a phase that I would call “innovation maintenance”. The mindset of many people seemed to be somewhere between self-delusion of former glory and reluctant acceptance of externally induced change.
Something that seems to be true for many companies: they go from moving forward to moving in circles when they mature. Circles that can gradually turn into a downward spiral.
The Simple Truth
Business at its core is rather simple and can be summed up in just one sentence: sell customer satisfaction at a profit. It seems though, that as businesses grow older and more mature, this simple truth often becomes: sell c̶u̶s̶t̶o̶m̶e̶r̶ ̶s̶a̶t̶i̶s̶f̶a̶c̶t̶i̶o̶n̶ at a profit. More often than not even the profit part is questionable.
When a company enters a phase of circling, when it has a hard time satisfying customers and hardly turns a profit, there is increasing entropy at work. This is like the corporate version of depression. It’s true, a company, like any organization, can be insecure, anxious and depressive.
For many owners of small and medium-sized enterprises, running their businesses often becomes little more than the mere execution of different sequences of operational procedures — recurring mechanical routines applied on a daily basis — in order to keep things running.
In many cases, the goal of doing business deteriorates to making an immediate sale rather than collecting and monetizing steppingstones en route to making a dream a reality.
The New Reality
Looking back at the first 10 years I spent at our family business I can truly say that the organization had been caught spiralling into depression. There was no common understanding of a place that we were headed towards. There was no dream or goal that we could have used to pull ourselves out of our corporate cognitive misery.
For the vast majority of businesses a vision, the intent on how to make an impact on the world becomes an afterthought at best. And the fact that a vision is a dream put to work to propel a business towards its desired future state, is hardly recognized.
I didn’t understand this truth until I felt I had no choice other than to proclaim and insistently implement my vision of “The Company Of The Future”. When I decided to escape our corporate spiral of depression and fumbled our business into becoming a poster child for the new work movement, I incidentally discovered how to create reality.
What I discovered was a pattern, a framework, and a mechanism. Reality is not what it seems it is. It is literally what you make it. And I can prove it.
This story is the first piece of a three-part series covering the creation of reality. Part two describes the principles of reality creation, read it here. And part three will cover the methodology of reality creation.
About the author: Christoph Haase is the founder of DDilettanti, a future/reality consultancy that helps owner-managed businesses create reality. He formerly ran and transformed his family’s engineering and manufacturing company into The Company Of The Future. Christoph works, explores and writes along the intersection of business, reality and the future.
Originally published at www.ddilettanti.com.