Organizations are energy processes

When I have an organizational problem - like an underperforming team, or an organization that seems like it’s stuck - I just want a mental model to help me figure it out that is practical and simple to use. As a practitioner, what I care about is having something that works.

I found inspiration after reading a Works in Progress article about making energy too cheap to meter: organizations are energy processes which create, harness, and apply human energy. To solve organizational problems, all we need to do is improve how the organization creates and applies energy.

Photo Credit: Unsplash @pavement_special

When I say “energy processes”, I mean something like what I’ve outlined below. Take nuclear fission as an example. The end to end process for creating and applying nuclear energy happens in four steps:

1. Accumulate a fuel source (uranium) from which energy can be created

2. Create energy from the fuel source (i.e., using a nuclear reactor)

3. Harness and transmit the energy (create electricity via a steam turbine and deliver it to a plug in someone’s home)

4. Apply it to something of value (the electricity goes into a lamp which someone uses to read a favorite book after sunset)

Organizations, similarly, are an energy process:

1. The fuel that powers organizations are people and the ideas, information, expertise, and the motivation they bring to the table (i.e., like the uranium)

2. Organizations try to get their people to put forth effort that can be used to create something of value (i.e., like the nuclear reactor).

3. Organizations then create systems to harness the efforts of their people and channel it into collective goals (i.e., like the steam turbine and power lines)

4. The organization tries to ensure all the energy they’ve created goes into something that the end customer actually cares about, which they can be compensated for (i.e., like the reading lamp used to read a novel)

Thinking of organizations as energy processes can help us understand organizational challenges quickly and simply. When I have an organizational problem I can quickly ask myself these four questions, and determine where my organization’s issues lie:

• Do we have enough “fuel” to create energy?

• How much energy are we creating?

• How much energy are we harnessing?

• Are we applying our energy to something of value?

You can be the judge of whether this mental model is simple and useful. The rest of this post gives some detail on how to actually use the energy process model to diagnose an organizational problem.

Question 1: Do we have enough “fuel” to create energy?

One of my favorite questions to ask a teammate is: what percent of your potential impact do you feel like you are actually making? In my experience, most people are not even close to fully applying their skills, talents and ideas. A tremendous amount of potential is wasted in organizations.

To get a sense of whether there’s sufficient “fuel” in your organization or the degree to which potential is wasted, look for the following:

• Complaints - if people are complaining, it means they have energy they’re not using and care enough to say something.

• Regrettable losses - if people are leaving your company and getting good jobs and promotional opportunities elsewhere, at least one other organization seems something that you do not

• Ask the team - people care about whether they’re wasting their time and energy. If you ask them, they’ll tell you if they have talents and energy that are being wasted

• Ask yourself this question: if I assumed the people around me had talent, potential, and cared, would I be acting differently? If you answer that question with a “yes” it probably means you have more potential around you than you realize.

In my experience, it is almost never the case that an organization lacks sufficient “fuel” to create energy. Don’t shift the blame to the people around you, look inward first.

Question 2: How much energy are we creating?

I loved The Last Dance, the ESPN Films miniseries the 1997-1998 NBA Champion Chicago Bulls. It was remarkable to me how that team seemed to try so hard, and how Michael Jordan was able to be a catalyst, pulling tremendous amounts of energy from his teammates. Watching the documentary, the energy being created was obvious.

To get a sense of whether your organization is creating energy, look for the following::

• Body language and non-verbals - If you work in an office, walk the floor and observe people through the windows of conference rooms, so you can’t hear what people are saying - just observe with your eyes. Do people seem like they want to be there or are trying very hard? Do they look bored? It’s pretty easy to see the parts of your organization that have energy just by being a fly on the wall and paying attention.

• Experiments - When people are trying new things - whether its practices, sharing new ideas, or under the radar projects that nobody has asked for - it’s a good indication that energy is being created. It doesn’t have to be a grand novelty. I just had a colleague the other day, our team’s agile scrum master, that tried out a new framework for debriefing our bi-weekly sprint of work. He literally changed our four usual questions to four new questions. He just did it. I immediately thought, “our team has some energy and psychological safety if our scrum master is trying new things - this is awesome.”

• Spontaneous Fun - I love to see teams that celebrate birthdays, bring snacks to work, create trivia games, or play pranks on each other. These are examples of activities that take energy that don’t have to occur to get the job done, they’re just for fun. If people are spending time putting energy toward having fun at work, it probably means they have plenty of energy for the work itself

• Engagement Scores - Again, there are lots of survey companies that can help your organization execute a simple engagement survey. The ball don’t lie, and you can track engagement over time. If you have high engagement it probably means your organization is creating a lot of energy..

Question 3: How much energy are we harnessing?

One of my favorite bits of comedy is the Abbott and Costello, “Who’s on first?” skit. Nobody has any idea what’s going on and they have a pointless conversation with no conclusion. It’s hilarious to watch, and an excellent illustration of what it feels like when there’s lots of energy around but it’s not being channeled and applied.

To get a sense of whether your organization is effectively harnessing and applying energy, look for the following:

• Low value work - In a factory setting, it can be easy to spot waste. In corporate offices, it’s harder to spot or prove inefficiency. Low value work is a good tell. If people don’t have anything better to do than low-value, non-impactful, work it probably means your organization isn’t harnessing energy well because it’s going into something that’s not worthwhile. When people have the opportunity to do something more impactful, they tend to.

• “It’s not my job” - The phrase “it’s not my job” or when people toss work over the fence, it’s a strong indicator that someone, somewhere, doesn’t know what their job actually is or that they have any direction on what to do. If your organization is constantly trying to offload work to someone else, it probably means energy is being wasted and that there’s ambiguity around what matters and what doesn’t.

• Silos and Bad Meetings - Every organization I’ve ever worked for has talked about how they’re “siloed” or that there are a lot of “useless meetings”. These are signs, again, that teams don’t know what they’re doing or know what the organization’s goal is. If people have the time to tolerate “silos” and “bad meetings” (which are easily fixed with clear goals and basic discipline), it probably means the organization isn’t harnessing energy well.

• Sprint and Milestone Velocity: There’s a great concept from Agile called “sprint velocity”. It basically measures how much work (measured in “points” which are pre-assigned) the team was able to accomplish in a given amount of time, usually two weeks. When the sprint velocity rises, it means the team accomplished more with the same amount of time and resources invested. You don’t need to operate on a sprint team to use the concept - just look at how long simple things things - like making decisions, building presentations, or executing a contract - takes to complete. If you find yourself saying, “there has to be a faster way to do this” it probably means your organization isn’t harnessing and applying it’s energy effectively.

In my experience, organizations harness just a fraction of the energy they create. Sometimes all it takes it setting a clear goal and making it clear “who’s on first”.

Question 4: Are we applying our energy to something of value?

This area of the framework is where the stereotypical strategy and marketing questions come into play, like “where do we play”, “how do we win”, and “how are we differentiated”. To get a broad sense of whether your organization is in a virtuous cycle of value creation or a doom loop of commotodization, here are some quick heuristics to get a sense how bad your strategy issues are:

• Revenue per employee or market share growth - if your organization’s revenue per employee or market share (or it’s equivalent) lags comparable industry players, you’re probably not doing something right - either you have energy problems further upstream, or, your organization is putting your energy into something people don’t actually care about.

• Races to the bottom - if your company is trying harder and harder to grow, but you are constantly feeling downward pressure on prices, it probably isn’t providing a compelling product that people are happy to pay a premium for - because they get more than they pay for. If you feel like you’re in a race to the bottom, you need your customers more than they need you.

• Customer feedback and referrals - This is obvious, if people are telling their friends about you or sending you thank you letters, it probably means you’re doing something of value to them - they’re literally marketing you for free. That willingness to show gratitude and spread the word means you’ve done something worthwhile for them.

That Works in Progress article I linked was so interesting, to me. I’ve been thinking about it for weeks. It suggested that something that disproportionally drives human progress is when energy becomes exponentially cheaper. What the author argued for was trying to make it so that energy was so clean, so cheap, and so abundant that it would be “too cheap to meter”.

Most of the time, organizations I’ve been part of miss the big picture about their organizational problems. Thinking through the lens of the energy process model brings this to light: the biggest opportunities for organizational energy are in creating it, not harnessing it.

To be sure, improving how we harness and apply energy matters - there’s opportunity at each phase of the organizational energy framework. But creating energy is the largest and most game breaking area to explore, by far.

Can you imagine what organizations would be like if there was so much human energy created that it was “too cheap to meter”? None of the world’s problems would be out of reach. Not one.