Reinvention of businesses. Natural Intelligence technology

Second. This requires the attention of any entrepreneur – progress in business, in business has become so rapid that no one can dream of building a quiet, solid family business. Pass it on to your children, who will pass it on to their grandchildren. On the contrary, you have to be prepared for the fact that any business you start will not be durable. That in your life you will have to do many different things, master different professions or start different business projects, develop different products. Only change is permanent.

Third. Progress, the process of global self-organization is not only the birth of new structures, but also the disappearance, death of the old ones. Any structure of human society, be it an ethnic group, a state, a technological order or a separate company, has its own moment of birth. But the moment of death is the same. No system is permanent. Companies, businesses are exactly the systems in which we are honored to work, or even these are our projects that we ourselves have created and are developing. Why are they mortal? How are they dead? Can I, with my business, get out of this «wheel of samsara» – an endless chain of deaths and births? (Spoiler – you won’t be able to get out, but you need to be able to transform, reinvent your affairs. Then rebirth will not be a mortal enemy, but your ally.)

Life cycle

The person lives. He is born, grows, grows old and dies. No one can escape the inexorable law of being. But that’s not all sadness. A person lives in a society of other people, works in a team, coexists with the state, belongs to some ethnic group. So, each system (family, firm, country, etc.) like an individual is also born, develops, withers and dies. Not only is our own age of life a burden that we can’t do anything about. Quite independently of our desire, we are born in a country with a thousand-year history, or vice versa, which appeared quite recently, we find ourselves in a company that, perhaps, is experiencing the age of youthful folly, or is an example of a wise old man. Although nothing can be done about it, it probably won’t hurt anyone to understand life in general and social systems in particular.

Let’s start from the description of ethnogenesis – the theory of L. N. Gumilyov, which he created while in prison in Stalin’s Norillag.

Gumilev Lev Nikolaevich (1912 – 1992) – the son of Nikolai Gumilev and Anna Akhmatova, poets of the «Silver Age», the author of the term «Silver Age of Russian Poetry», historian and geographer, author of the theory (more precisely, teaching) of ethnogenesis – that is, the origin and development large supranational communities.

Reading Gumilev, the chaos of historical events appears as a clear picture of the complex, but natural interaction of emerging and disappearing systems. Before the genius of Gumilev, a picture of a pattern opened up, which he tried to explain. To do this, he had, for example, to introduce the concept of «passionarity» – a sexually transmitted genetic trait that determines the active behavior of people, thanks to which large social systems are created and developed.

«Passionarity is a sign that arises as a result of a mutation (passionary impulse) and forms within a population a certain number of people with an increased craving for action. We will call such people passionaries.»

(L. N. Gumilev)

However, following this, we would have to admit that molecules with atoms in vortices of cyclones or in layers of boiling water should also be supplied with a similar genetic factor. When summarizing the theory under the global historical picture that opened up to him, L. N. Gumilev rearranged cause and effect. Quite the contrary: this social system objectively implements strict rules for selecting a certain behavior of individuals, its components – at different stages, different, and not «innate» qualities of the elements determine the state of the system. The fact is that social systems are the same open dissipative structures as, for example, atmospheric anti- and simple cyclones, whirlwinds of boiling water in a kettle, or vibration modes of atoms inside a laser.

Let us state Gumilev’s theory, shifting it to the modern synergetic representation, as we understand it:

Every system (including human) arises, exists and disappears. The entire course of the life of the system can be divided into six stages: rise, growth, fracture, blooming (aka inertial), convolution and memorial.

1) Let us imagine some human system, a structure that is in a stable state balanced with the external world (this is the Memorial Phase). Let’s make a reservation right away – in fact, any human structure, be it a people, and even more so a company, the external environment gives too few chances to live to equilibrium. Let us assume, however, that adversity has not yet touched this part of society. In this system, people live (for example, in some hidden corners – in the mountains, on the islands) according to custom, according to the covenant of the fathers, according to the order established by someone once and for all. They do not claim anything beyond what their familiar environment gives them.

2) The family, as usual, is not without its black sheep – there is always a certain number of passionate individuals who cannot or do not want to be like everyone else. The main mass does not perceive them otherwise as eccentrics, renegades or, worse, degenerates; and crushes them in all possible ways – both moral and physical. Due to this, deviations from «normal» behavior, from the generally recognized standard, usually exist at the level of barely noticeable deviations – fluctuations. But as soon as the original community is weakened – natural disasters are to blame, the economic crisis, or the invasion of aliens – «renegades», passionaries get a chance: they first form small companies, communities, which are later joined by fragments of obsolete systems. This is the beginning of the Rise Phase. First of all, in the embryo of a new structure, a clear self-consciousness arises that we are We, they are not at all those who are near and around. Those are strangers, enemies! A spontaneous, unconscious unity arises – the psychology of the pack: «one for all, and all for one.» The ideological dominant has not yet been worked out. The vigorous activity of passionaries causes the growth of a new system. This structure is active, it seeks to annex new territories, markets, areas of activity. The stereotype of behavior of the old system «be like everyone else, do as usual» is replaced by the imperative of Duty:

«You must be just like that for the sake of the Common Cause, for the sake of our Community.» The general passionarity of the members of the system is growing. From quiet townsfolk, adapted to the old conditions, they turn into seekers of improvement, first without risk, and then at the risk of their lives. This marks the transition to the Growth Phase (according to Gumilev – «Akmatic).»

3) This is the phase of prophets, fanatics of the new cause, revolutionaries. This is the phase when «Striving for the ideal of success and victory» becomes the imperative of behavior. «The greatest rise in passionarity – the akmatic phase of ethnogenesis – causes people’s desire not to create integrity, but, on the contrary, «to be themselves» – not to obey general regulations, to reckon only with their own nature. In general, this is a very «boorish» stage. The right of force reigns here, whoever has time – he ate it, the end justifies the means, the competitive struggle for leadership is the most ruthless. During this period, the system spends a lot of energy both on external expansion and on internal civil strife.

4) So much energy is spent on fighting external enemies and leaders with each other that the Fracture Phase begins.

«Usually in history this phase is accompanied by such internal rivalry and slaughter that the course of ethnogenesis is temporarily hampered.»

Civil wars, conflicts at work, conspiracies begin. The passionary charge of the population is reduced: harmonious personalities become the leaders in the system, in which both activity and caution do not have excessive deviations. The imperative of this stage is: «We are tired of the Great Ones!» Away with the heroes! This period of the system’s life ends with the victory of one of the competing leaders.

5) The system enters the Inertial Phase. She is the Blooming Phase. The winner is proclaimed the slogan – «Be like me!» That is, a pattern of behavior is offered, an example to follow, sometimes from the heroes of a past heroic era. Extreme regulation of life and work, "Ordnung!», the establishment of a clear hierarchical organizational structure of the community. Differentiation of objects of activity, areas of responsibility, spheres of influence. living standards. Ordering everything and everyone: Laws and Rules. The accumulation of material culture, the creation and preservation of a huge number of cultural, scientific, technical and other monuments. In a word, the Inertial Phase is a flourishing, Civilization. It was the ethnic groups of this period of life that created everything that today we call Ancient Egypt, Hellas, Ancient Rome, the Mayan and Aztec civilizations, the Renaissance. It turns out, however, that the era of enlightenment and civilization is in fact not the heyday, the «spring», but the decline, the «autumn» of the system. All the numerous fruits of the Inertial Phase are only the gradual dissipation of the former passionary charge. Indeed, «golden mediocrity» is the social ideal of this era. The creations of artists, scientists, technicians, although numerous, are inferior in quality to the achievements of the restless era of «Sturm und Drang». Imitation prevails. Not creators, but artisans, not Artists, but Manufacturers. The social ideal is material gain. If the phases of rise, development and breakdown can be called the Age of Chivalry, then all subsequent stages are the Age of Trading: everything is just for money, altruism and heroism are ridiculous, personal income is the measure of everything. There is an erasure of features, outstanding personalities are persecuted, driven into the framework of the standard. (However, after their death, they are willingly canonized!) Zealots of traditions and law, conservatives – these are the favorites of the system at this stage.

6) When the last remnants of passionarity disappear, the Convolution Phase begins (according to Gumilev – «obscuration»). People with a complete lack of a progressive beginning strive to destroy not only passionaries, but also simple burghers – hardworking harmonious people. Sluggish and selfish people, guided by consumer psychology, dominate everywhere. «Though a day, yes mine! After us – even a flood! Pleasure is here and now!» – these are the slogans of this era. Corruption, compilation, mistrust and betrayal, ignorance and parasitism reign. An intelligent person who tries to maintain at least some order is perceived by the system as worse than an enemy. It is at this stage that a small detachment of barbarians is able to take possession of a huge city, mired in debauchery and indifference.

Table 2. Imperatives of behavior at different stages of the life cycle according to Gumilev

7) After they have eaten and drunk everything valuable that has been preserved from heroic times, the last stage begins – the Memorial Phase, when the system retains only the memory of its historical tradition. Then the memory also disappears, the time of balance with the environment comes, when people prefer philistine peace and measured existence to great plans. The despotism of Tradition, the authority of the Elders (age is the measure of everything, not talent or heroism), and an unchanging caste structure are established. Passionarity is only enough to maintain the economy established by the ancestors. Peace reigns until an external enemy destroys the system that has outlived itself, or a new community is born inside it, whose members will proclaim – «We are different! The old course of life must be broken,» and the old system no longer has the strength to destroy the new formation.

Company life cycle

Don’t you think that all this applies to companies as well? And the organizations where we, fortunately or unfortunately, have to get into, and the organizations in which we ourselves are the founders, just as accurately go through the same stages of their lives. And the rules adopted in them and the emerging relationships are very similarly transformed.

Dr. Ichak Kalderon Adizes is one of the unsurpassed business consultants in the world, a brilliant specialist in the field of effective business process management, he studied in detail the stages of the life cycle (LC) of the company. It is easy to see direct parallels between his description for companies with the characteristics of social systems by Gumilev.

Adizes about the life cycle of the company:

«The stages of Growth are the stages of sacrifice. Blossoming is a stage of existence. The stages of Aging are the stages of acquisition.»

Adizes’ characteristic of companies in the early stages of the Recession – he called it the" Aristocratic Stage»:

«The closer a company approaches the Aristocratic stage, the less desirable change becomes. The decrease in flexibility, which began even at the heyday stage, makes itself felt. In an effort to minimize all kinds of risks, the organization uses only those opportunities that give a tangible result in the short term. Yes, she does not master new technologies, does not show interest in the implementation of innovative projects, does not conquer new markets. In other words, she is losing the entrepreneurial spirit that propelled her to the pinnacle of success not too long ago.

Atmosphere of stagnation

What about people? They become passive. They try their best to avoid conflicts and disagreements. So, while the worker is quieter than water, lower than grass and does not actively try to raise existing issues that others prefer to turn a blind eye to, he has a chance not only to earn respect, but also to move up the career ladder. In turn, those who speak openly about the difficulties that have arisen receive a massive rebuff. He becomes an outcast in the team. And his most insignificant oversight becomes the reason for dismissal.

Rituals

In an aristocratic company, people attach great importance to rituals. They don’t care about the end result. Generally accepted standards and values come to the fore. Form beats function.

No more jeans and sweatshirts. There are strict requirements for the dress code, which even the most courageous democrat does not dare to violate. All managers wear one-piece corporate-colored business suits and look as if they were going to a funeral ceremony.

The main feature of aristocratic companies is a commitment not only to expensive uniformity

in clothes, but also to expensive surroundings. An office in the most prestigious area, elite massive furniture, chic carpets, paintings depicting the founder and expensive designer «tricks». Thus, by demonstrating their status, they identify their belonging to the elite.

Paralysis of the center of power

The top management of the company, who have fallen into the stage of Aristocracy, as a rule, becomes a victim of the former triumph that turned their heads. Instead of living in the present and looking to the future, leaders are still thrilled by old accomplishments. They imagine themselves to be omnipotent, although in fact their powers are limited. They are unable to quickly accept and implement any decision, since each of them needs to be coordinated with several centers of power.»

Practical complete coincidence with the characteristics of the Convolution (obscuration) phase by Gumilev, isn’t it?

Generalized change in the characteristics of the company by phases of the Adizes life cycle is shown in Table 3.

The company is a complex system. With its numerous subsystems, each of which is also subject to its own stages of development. They also have their ups and downs. And they can lead to the premature death of the entire organization. For example, childhood illnesses – growth difficulties that occur at the start of projects – are especially relevant for so-called «startups». To quote the descriptions of the «childhood diseases» of companies from Adizes:

«Premature aging

In the event that a manager with a dominant vitamin A – administration – wins, employees with entrepreneurial inclinations in droves begin to leave the organization.

Table 3. Characteristics of companies at different stages of the life cycle according to Adizes

The loss of the entrepreneurial component and the increased control on the part of the manager-administrator leads to a minimization of flexibility and, as a result, to premature bureaucratization. The company ceases to quickly adapt to the changing reality and is rapidly losing its leading position. She begins to age before she can reach her Prime.

Fig. 9. Typification of managerial styles according to Adizes

Unfulfilled entrepreneurship

Another scenario for the development of events: the owner understands that he can no longer and does not want to be a substitute player in the team. He decides to voluntarily give up power in order to leave and start from scratch.

He is often pushed to such a decision not only by the hired manager, but also by the board of directors.

The collapse of the business partnership

Another danger that lies in wait for the company in Youth is «divorce». If the company is headed by two founders who are carriers of different management styles, then it is during the Youth period that their partnership ends.»

Product life cycle

The ruthless picture of the life cycle can also be projected onto the results of a business project – its Product.

According to the marketing concept, any product goes through a life cycle, that is, there is a certain period of time when it is present on the market. In a typical product life cycle, the same main four phases, four stages are distinguished:

Bringing goods to market. First appearance of the product on the market. Characteristic is a small increase in sales volumes and, accordingly, the profit is minimal or non-existent.

Height. A period of rapid growth in sales volume if the product is accepted by the market and the demand for it increases. Profits also increase as sales increase.

Maturity. Sales volumes are significant, but further sales growth is not observed. Profit at this stage has stabilized, since additional costs are not required to bring the product to the market.

Decline, withdrawal from the market. This phase of the product life cycle is characterized by a significant decrease in sales volumes up to a complete drop in demand for this product. Profits plummet to zero.

The so-called BCG matrix is a tool for strategic analysis and planning in marketing. Created by the founder of the Boston Consulting Group (BCG) Bruce D. Henderson to analyze the relevance of the company’s products, based on their position in the market relative to the growth in demand for these products and the market share occupied by the company selected for analysis.

This matrix highlights four possible product roles for the company producing it, and the names of these roles themselves also indicate the «age character»:

«Question mark». Low market share, but high growth rates. The outlook is not clear.

«Stars». Under conditions of substantial investment, they show high sales growth and a high market share.

«Cash Cows». High market share but low sales growth.

«Dogs». The growth rate is low, the market share is low, the product is generally low profitability. Looking ahead, we note that, according to the BCG methodology, the only correct marketing strategy regarding «dogs» is the closure of such projects, the withdrawal of products from the market. Later, we will show examples of how just such a stagnant market, according to another taxonomy – «scarlet ocean», turns out to be fertile ground for the emergence of bifurcations – completely new, innovative business models.

System dictates

Now that there are clear parallels between the life stages of social systems of completely different kinds and their products, let us describe the very phenomenon of the life cycle in the universal language of synergetics. Hoping that this will help us reach the same universal rules of behavior within different systems – projects or companies.

If we introduce some action potential (we will not go into what physical meaning this value has), then during the life of the System, the potential from the zero level reaches a maximum at the break stage, and then drops to zero (the middle plot of Fig. 10).

Formation. The main direction at the stage is expansion. The system emerges, it needs to grow, expand, take shape – and this requires resources. Expansion for systems of various nature can be territorial or market. Capture, expansion, obtaining resources from outside. Expanding your living space is the main trend. The impulse of the development of the system is directed outward – capture, conquest, expansion. Growth of potential due to the extraction of resources around. Where else can a newborn get them from!

Peak – Expansion Momentum exhausted.

Rise. Which actually means the beginning of the movement by inertia. Establishing a balance with the surrounding hostile world, securing the necessary flow of energy from the outside. Sometimes a painful transition (breakdown) from capture to stability and protection of what has been achieved. From the era of «warriors» to the era of «administrators». From «knights» to «traders».

Recession. The transition to protection from external challenges, the use of extracted resources to strengthen one’s own structure within oneself. Digestion of what has been achieved by the members of the system. The economy of managing – including, as a consequence, the streamlining of behavior and structure, and for this, the development of knowledge and culture is necessary. In the end, crystallization is the fixation of form, the concreting of order, patterns.

The potential, in turn, can be considered as a certain rate of entropy reduction in a particular self-organization (upper graph of Fig. 10). The system spends energy both on expansion and on the development of order, which is reflected in the form of an increase in negentropy – information, including coded in the form of scientific achievements, works of art, etc.

«Negentropy is a philosophical and physical term, formed by adding a negative prefix neg- to the concept of entropy, and denoting its opposite. In the most general sense, it is opposite in meaning to entropy and means a measure of orderliness and organization of the system or the quality of the energy available in the system.»

Initially – a minimum of order, at the peak – active ordering, including in the form of administration through a large number of laws, instructions, regulations, descriptions, etc. On the decline – necrosis, when a lot of information has been accumulated, order is cast in granite, but energy, the ability to act is no longer in the system.

Fig. 10. Thermodynamic metaphor of Gumilev’s theory

The derivative of the potential function (bottom graph of Fig. 10) reflects just the nature of people’s behavior that at this stage of the life cycle most of all reflects the system’s imperative – an informal collective aspiration. The vertical scale can be called the axis of passionarity, with the most active progressive/knightly activity at the top, and the most active conservative/philistine activity at the bottom.