Growth is Recurring Change

“Growth is recurring change, wrote Edward Hess in his book The Physics of Growth. Professor Hess highlights some fundamental differences between execution of the mission (stability) and improving the organization (growth):

‘Most organizations today are decidedly out of balance. They look like bodybuilders who do only pull-ups, so they have bulging biceps (those do the heavy lifting of execution) on top of underdeveloped quads in their painfully skinny legs, which inhibit speed and adaptability – and hence growth.”

The fitness metaphor is a telling one and reveals an important lesson for organizations: you create healthy balance by having the ability to both invent and execute.

Let’s return to the theme from a previous post on change, Change: The leader’s ability to improve an organization through change and growth – learning from science “physics,” but also biology, adaptive systems and complexity theory – instead of economics.

“The most fundamental natural law of organic growth is that the only certainty is uncertainty. The dominating forces are ambiguity and change; the processes at work involve exploration, invention, and experimentation. These elements, taken together, capture the distinct physics of growth.”

Hess highlights the fact that from complexity theory we learn that “growth is an experimental learning process.” And from adaptive systems we learn the importance of “maintaining a correct balance between two modes of exploring: random and focused.”

What leaders figure out quite quickly is there is a tension between managing an organization for efficiency and control and managing it for growth and innovation.

Unfortunately, this way of thinking is very different from the traditional approach to management. Instead of thinking of change, most leaders are taught to think in terms of stability. Hess explains that “this physics is very different from one that has long informed the design of business organizations; that physics is characterized by stability, predictability, and linearity.”

To overcome these challenge Hess has developed a model which captures the capabilities of healthy growth. He calls this a ‘Growth Formula’: 1) preparing employees’ minds (mindsets), 2) building an internal system (system), and 3) creating a path that consists of three growth processes (processes).

The formula looks like this: Mindsets + Systems + Processes.

Let’s look at the first two elements – mindset and systems – in more detail.

Hess begins with the individual and their perspectives, skills and behaviors. “Growth is an outcome of a set of behaviors on the part of people”, Hess explains. There are three components:

1. A person’s perspective on the world. Are new situations the opportunity to learn or fail? Your perspective on this, and how you view the world in general, determines in large part how you view growth and uncertainty. Leaders often unknowingly create cultures that create the opposite intended effect: punish mistakes and expect perfection.

2. A broad repertoire of employee skills. Hess writes there is often a default mindset in employees: ‘the way we’ve always done it.’ To overcome this he encourages employees to expand their work skills by working in different functions and avoid silo thinking. He likens a manager’s repertoire to that of a musician. Exposing employees to a variety of businesses and functions so they can recognize and play new ‘songs.’

3. Customer empathy. Hess asks us leaders: How do we come up with ‘original insights that inspire invention and lead to truly compelling and differentiated new value propositions?” To do so means moving away from a so-called ‘customer focused” organization and encouraging employees to develop customer empathy. An empathetic orientation towards customers is not ‘trying to shove products more effectively at people,” but rather being deeply and genuinely interested in the lives of customers as people, not marketing categories.

In Hess’s research of successful companies, it was an effective internal system – “not new products, new strategies, or charismatic leaders” – that “characterized high organic growth.”

Leaders begin by creating an organization environment that identifies the behaviors among all employees that produce and inhibit growth (both are equally important) and behaving ‘in ways to consistent with that environment. That enabling organizational environment is what Hess calls an internal Growth System.

For Hess, a Growth Systems is a “seamless, consistent, self-reinforcing alignment of culture, structure, leadership behavior, HR policies and processes, measurements and rewards that enable and promote defined growth behavior.”

Here we see the author embracing systems thinking from the sciences. Hess realizes that the most important principle in systems is that “the different components interact with one another to create more than the sum of its parts.”

Peter Senge explained that “systems thinking is based upon a growing body of theory about the behavior of feedback and complexity – the innate tendencies of a systems that lead to growth or stability over time.”

This is an important lesson for Hess as well. The elements of a theory must be aligned and self-reinforcing to encourage the desired behaviors. He astutely observes you can’t change one element, like introducing a new structure, but not shifting culture or policies, and expect it to work.

This wisdom of change and growth reveal some important insights for leaders as they work to improve their organizations. We live in complex times where our experience in executing a strategy is not enough to ensure successful growth in our companies. We need to embrace the healthy tension between order and change; between execution and creation; between the physics of stability and the physics of growth.

Our traditional sources of economic insights often fall short in this world where “…the only certainty is uncertainty.”

We must look to the “new science” of systems, complexity, and chaos theory for guidance.