Phase 3: Exploitation

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Phase 3: Exploitation

Adaptive Cycle - Exploitation

In terms of perception of the situation, the making of a definitive choice means that ‘hopeful about the future’ is replaced by ‘confidence in the future’ in the belief that the right choice was made for the organisation. Therefore, the choice was made from numerous possibilities that were explored in the 'new combinations' phase, sometimes not only on purely rational grounds, but also 'gut' feel. In that case, intuition and emotions play an important part in the decision making process. Future success can hardly be proved. Snowden denotes this choosing as the 'probe-sense-respond' approach where the idea of the feasibility of a solution emerges. In a sense this also involves a Gestalt switch. The moment a decision is made for a certain option, others need to be disregarded, for better or for worse! It is also a possible fight for survival and compromises need to be made. Technology such as social media and search engines are used to find the gaps in the market to exploit by the reorganised company.

Subsequently, it will turn out whether management chose wisely. Choices are linked to strategic views of the direction that the organisation will take in the future. In terms of solidarity and potential, we can observe that the potential is reduced during this phase, new initiatives are no longer sought and the move to establish the business solidarity is strived for. A shift from new combinations to entrepreneurship and new business establishments is in order. This often happens by recording processes and standards, allowing for scaling up to a new business-as-usual situation. This phase is referred to as the 'Exploitation' phase by Holling.

During this phase choices are made, which can be based on intuition and emotions. New combinations of workforces are created and new business units and business plans will emergence.
Staffing issues

This will lead to re-deployment, new appointments, retrenchments and also to resistance vs new opportunities. In the exploitation phase it is possible for an organization to create market penetration (by establishing niche in market through Social Media for instance). It is also possible to stream-line operations, develop standardization and automation procedures. In capitalistic terms this means looking for new opportunities or gaps in the market to address a need which leads to Entrepreneurship and eventual stable business, bringing the company back to equilibrium. Exploiting market opportunities and establishing niche operations leads to growth and stability for the company.

For the company Fast Lane, it means that they could use one specialist lecturer to present to a number of remote classes simultaneously by means of virtual presence. This means they could run more classes by combining students in remote venues thereby influencing their business model and increase profitability.

A good example on Capitalism presented by the following video:

Forming synergies

When moving from new combinations to the entrepreneurship phase (quadrant 3 to 4 of the adaptive cycle), a new business unit or units are formed. A company needs to look at what they they need to acquire in addition what they have (the remember phase) and discard what they don't need. This has implications for staffing as well, where existing staff might be re-deployed, new appointments made and in some cases retrenched. Change management and good communication skills are some of the leadership qualities needed. When forming the new staff compliment, psychometric testing is of benefit to build teams that can form synergies with the new direction of the company. One of the models that can be used is Spiral Dynamics. This is a model based on the theory of psychology developed by professor Clare W. Graves based on powerful theory about culture evolvement. It is a model linking life conditions to mind capacities using different colours to represent people's strengths or weaknesses. On one side is linked to individual development - ‘the world adjusts to me’, and on the other side is the collective conservatism - ‘I adjust to the world’ concepts. Awareness of employees strengths and weaknesses allows a manager to form strong and cohesive teams in a company. different combinations are needed for teams in the different phases of the adaptive cycle. For example, in the crisis phase, innovative teams are needed, whereas in the equilibrium phase, stable and methodical teams might be needed who focus on standardisation. Spiral Dynamics was used by Nelson Mandela in South Africa to reconcile differences in culture and form the new 'Rainbow Nation'. Spiral Dynamics describes the complex adaptive development stages of human consciousness and how this can influence teams or combinations of people. It describes a spiral model of dynamically emerging systems which people can engage in their lives.

" If you talk to a man in a language he understands, that goes to his head.
If you talk to him in his language, that goes to his heart ". .......Nelson Mandela.

Spiral Dynamics diagram  

Customer Relationship Management (CRM)

While moving to the entrepreneurship phase the information systems used by the company may also be evolved. Customer Relationship Management (CRM) for example, is one of the most important Business Information Systems (BIS) and is now, with the help of the technology, moving to the next level. The customer is the most important core of every company. Every new investment, movement, decision a business makes should be only after taking into careful consideration the impact it will have to its clients. Besides, a company has no reason to exist without them. It is the client who decides whether any company’s products are useful for him and worth buying them or not. Therefore, it is very important, especially nowadays, that an enterprise builds an effective relationship with its consumers. As a consequence, both academics and managers spend more and more time and money on finding ways to manage to build meaningful relationships between companies and their clients. The main concept that dominates in the majority of the businesses is that “the client is always right” and therefore, businesses try to do their best in order to satisfy their customers in order to survive the competence in the market.

Customer Relationship Management (CRM), is an information system that focuses on the client and recognizes that the ability of a company to understand its own customers and the interactions between them and the company itself is a crucial success factor. Companies should invest on CRM if they want to get a competitive advantage against their competitors. It is a tool that companies use in order to kick down the walls between them and their customers in order to make some sales and service processes more effective by collecting data about their customers. CRM is actually a process of collecting customer’s information such as past sales, service records and unresolved problem calls in order to increase a company’s ability to maintain its existing customers and build a sustainable relationship with them.

But that is CRM 1.0 - traditional CRM.

Nowadays, the impact of the World Wide Web (www) and especially the social networks has changed the way businesses must respond to their clients. The WWW – described by Sir Tim Berners-Lee as “an interactive sea of knowledge…made of the things we and our friends have seen, heard, believe or have figured out”. Customers can discuss about a company’s products and services and change opinions publicly and it is difficult for them to blindly believe the advertisement of the companies. This is due to the fact that people who have already experienced a product are considered to be much more trustworthy than the marketers whose main concern is to just sell it and consequently they would probably exaggerate in their promises in order to succeed.

In addition, according to the book: “The Cluetrain Manifesto”[1]: • “These networked conversations are enabling powerful new forms of social organization and knowledge exchange to emerge. • As a result, markets are getting smarter, more informed, more organized. Participation in a networked market changes people fundamentally. • People in networked markets have figured out that they get far better information and support from one another than from vendors. So much for corporate rhetoric about adding value to commoditized products.”

Social CRM is a completely new field for businesses and is attracting more and more attention both for businesses and academics. The change that has been brought by technology evolution has changed the way companies think and most importantly act about their customers. They begin to understand that Internet has changed the whole marketplace and market price all over the world and therefore, they need to think of new ways in order to survive the technology evolution. As a consequence, businesses must extend the way they use CRM in order to capture the customers’ experiences including these external influences as well. But how can they manage to do this? Is there any particular way for the companies to interfere and modify people’s opinion through social media? And if there is, how would the companies know whose opinion should they change and whose not? It is easy to understand that if people change opinions about products through their online discussion, it is then more important for businesses to find out which people have more influence than others and which do not. The more satisfied the person with great influence is, the more people within his circle will have a positive opinion about a particular product.

In the exploitation phase several technologies can be used or can support a certain task:

  • Marketing Tools - create awareness of the new or revamped company
  • Advertising Technologies (web, print, social media, billboards, Augmented reality)
  • Funding is sought (Banks, Investors, Angel funding)
  • Financial Software needs to be applied and integrated (banking, E-commerce)
  • Establishing Policies (electronic repositories)
  • Developing company websites
  • Define communication policies (hierarchy, company email, company website, twitter, Google+, Facebook...) for Intranet and Internet usage
  • Security and firewall establishment
  • Collaboration (virtual meetings such as Telepresence software)

The company is busy converging with the aim of forming a solid business unit. The business case is being refined and implemented. Policies and procedures are being formulated, established, standardised and implemented. New leaders could emerge here and give new energy to the company. Potential is reduced during this phase, new initiatives are no longer sought and solidarity is strived for. Resilience is high at this stage as all proponents from the new combinations phase are still available.

The positive side of Exploitation


Exploitation will lead to market penetration where consumer demands can be met. The organisation has opportunities to globalise and exploit niche areas. Job creation and wealth production for owners and shareholder can be realised as well as an increase in GDP for the country.

Example video of Entrepreneurship:

Example video of Technology:

It will also lead to cooperation between branches and countries. Global connectivity and tools such as Telepresence can be used to attend meetings remotely, thereby saving time and reducing travel and accommodation costs. This also promotes a ‘green society’.

The negative side of Exploitation

Negative exploitation

The negative side of exploitation is that an increase in wealth can lead to greed. This can lead to exploitation of cheap labour, for instance the use of sweatshops in, for example, the far east (Nike, Walmart and countless others). There could be a need for automation with the associated technology, converting cheap unskilled labour to more skilled labour, allowing machines to do the menial work. This means staff can be re-skilled to maintain and operate the machinery at a more skilled and challenging level, with hopefully, increased well-being! Automation normally allows for greater volume production, thus more staff will be needed in providing the raw materials and moving the end products to market. Automation allows humans to spend more time on being creative.

A negative side of exploitation and increased wealth can lead to competition and jealousy. This fuels attacks against the company in the form of hackers. Companies will need to provide security for their operations, some physical, but especially Internet security from hackers and viruses. Attacking the competition is the opposite of cooperation. There is a need for monitoring tools and security systems. Diplomacy and negotiation skills are also needed.

The move from New Combinations to Entrepreneurship/Business should be a fairly rapid transition for a company to get back to a stable equilibrium state. A company needs to have enough financial backing to bridge these phases. The threat of the entrepreneurship phase not coming to fruition can be devastating for a company. Some of the technologies used for this could include business analysis software and share price monitoring. Competition could also be quite aggressive. Ambidextrous management is needed to move from the revolt to the remember phases. Ambidexterity in management is thus solutions are often sought in teamwork, as teams are able to cope with a multitude of varieties.


  1. “The Cluetrain Manifesto”


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