Adaptive Cycle

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The adaptive cycle

Adaptive Cycle showing transitions

Starting point for the reasoning as presented above is that every organization goes through a cyclic development path that can be defined within the want/can (or objectives/means for fitting in more closely with Thompson) context model. Summarized, we can describe the movement as follows. In order to describe the process we start in quadrant 1 (lower left in figure). This quadrant is the simplest from a management viewpoint: the equilibrium situation. It is clear which goals are pursued and how these goals will have to be realized. In general the customers are satisfied and there is no reason for making new strategic choices. There is confidence that the organization is able to cope with threat from outside using the currently applicable management skills, as available within the existing dominant coalition. In this quadrant, any improvements take place within the existing objectives and the prevailing business model. Market power and profitability are the goal.

If external influences that disturb this equilibrium can no longer be denied or if a ‘Black Swan’ (Taleb 2010) occurs, the organization is generally too far out of phase for finding a way out of the arisen situation. In that case we speak of a crisis, a crisis that otherwise, may occur in two guises: as a crisis in the negative sense of the word but also as a crisis that is an opportunity for innovation. However, both guises lead to uncertainty with regard to the organization’s future.

The change in this awareness suddenly moves the organization to quadrant 2 (upper right in figure). In that case, the existence of uncertainties about how to define the unforeseen development becomes clear and secondly, uncertainties about what the organization wants and can do. This makes demands on the management skills and inspirational ability. Otherwise, the start of a crisis usually also demonstrates that the existing dominant coalition, with its repertoire of actions based on experiences, is no longer capable of dealing with the situation. There is a need to add new varieties to the repertoire of actions. These varieties need to be sourced outside the existing dominant coalition. One needs to find inspiration in for example the multitude of possibilities that are presented from inside as well as outside the organization. In this situation, the objective should be to arrive at a realistic set of options from which the organization can choose, given the crisis situation it finds itself in. For the sake of the organization, there are hopefully still sufficient means, in a financial sense, in market power, in prestige, in space for being able to develop these options and next, being able to choose. In order to decide how realistic these alternatives are, requires far-reaching analyses. This can be done by carrying out pilot studies, by means of thorough scenario analyses and so on. At a given time, once this set of options is available, the decision can be made to react no longer defensively to the internal and external threats. One is able to look at the future with some form of confidence once again. The moment when the basic attitude of fear for the future and searching for new alternatives is altered towards confidence in the future marks the transition from quadrant 2 to quadrant 3 (lower right in figure). In fact this means therefore that on the road to this, saw the development of a whole range of alternatives from which the organization can choose.

Because it is impossible to realize all opportunities, it is necessary to make a choice. The selection process entails that one of the available alternative options has to be chosen and will be further developed. To that purpose, it is not just necessary to choose which option is to be developed but often also why certain other options will not be further developed. The moment of making the final choice for the option to be implemented marks the change from quadrant 3 to quadrant 4 (upper left in figure). This choice demands an actual decision, which will often lead to an uncertain result. Therefore, whether this choice is made on purely rational grounds is not probably in some cases and probably also not necessary in all cases! The choice concerns a management decision which is often made based on intuition and gut feeling. The moment the decision is made it concerns a choice to go for a specific option, for better or worse!

Once the choice has been made, it will often become clear that the organization is not ready yet for proceeding to large scale implementation. The experiences acquired in the pilots or the scenario analyses will not have led to a situation in which the developed skills enable the organization to scale up towards actual production circumstances. The switch to a new equilibrium situation (and therefore a new quadrant 1 situation) demand unremitting labour and the reorganization and/or rationalisation of business processes before the organization gets back to a relative state of balance between want and can. After this, the whole game starts all over again.

This cycle can be easily interpreted as a sequential process which the organization as a whole goes through. The sequential character of the process requires a thoughtful approach. After all, the level of consideration used for looking at the organization is not necessarily the organization as a whole. Different parts of organizations may be at different phases of the cycle. In that case, various cycles are current, each with their own size and speed and taking stock of the consolidated effects of all these cycles is impossible or hardly possible. This also better fits in with the ideas of the complex adaptive systems approach of organizations as we saw and discussed in the previous paragraph. Nevertheless, it is obvious that crises also determine the autonomy and the survival of organizations. Not every organization manages to survive a crisis without any damage.

The above described simplified descriptions of the adaptive cycles provide a first idea of the development as this may take place within organizations at different levels. However, a further and more accurate description of the various phases is needed. In order to raise the level of complexity not too high, we will start by examining the singular cycle more accurately in the next paragraph.