Organism Is the Wrong Construct for Business Ecology

Business Ecology

One of the precepts of the Business Ecology Initiative is that “the enterprise is a living organism in a dynamic and volatile environment and must be managed as such” (Lundberg, 2011). The idea of an organization as a living organism carries with it many implications, one of which is that of single-mindedness. I believe that in a digital, networked world, it will become increasingly important to consider an organization as a multi-minded social system. The reason for this is contained in the second part of the precept; modern businesses operate in increasingly dynamic and volatile environments.

There are three possibilities for the “mindedness” of an organization. An organization can have no mind whatsoever, it can have one mind, or it can have more than one mind.Communication two heads

The industrial age ushered in the development of the mechanistic, no-minded, business. Then, a business was simply a tool, a means to generate profits for its owner. The parts of the business, both human and technological, were considered as no more than parts of the machine – replaceable, without choice, and governed by the needs of mass production: efficiency, predictability and control.

The success of mass production led to mass consumption, which, interestingly enough, made mass production no longer sufficient for success. Now, in order to survive, a business had to face the problem of managing its unprecedented growth. Well suited to this need was the emerging idea of a business as a single-minded organism, after all, organisms have solved the growth problem. The mechanism was to kill or be killed – survival of the fittest. When considered in this light, a business’s purpose is survival, and in order to survive it must aggressively pursue the raw material for growth.

Aggressive pursuit of profits enabled businesses to grow, and to effectively manage this growth, they increasingly turned to the divisional structure. Each division took its direction from executive management (the brain) and had no real say in the governance of the organization. The only “thinking” allowed a division was to manage its operations by anticipating demand and adjusting capacity accordingly. This single-minded, top-down, organism-based model, which operates in a “predict and prepare” mode, is still very prevalent today.

Over the past decade, the competitive environment has become more dynamic and volatile, making success more difficult. The next major mode of thought to emerge recognizes the unique problem-solving capabilities of a business’s community of stakeholders. This approach recognizes that two heads are better than one and views the organization as a multi-minded, social network of human capability.

In order to thrive in this more complex, networked, dynamic environment, an organization activates its relationships, both internal and external, tapping into the knowledge, experience and insight of its members. The goal is to both align divergent purposes toward a single objective and use social synergy to solve messy problems.

Treating a business as an organism where a central brain does all the thinking and the parts respond automatically is becoming an increasingly dysfunctional way to operate. Rather than conceptualize enterprises as organisms, a better metaphor for the future is that of a multi-minded social system.