From Chaos to Clarity in Business

Why a little bit matters a lot

Entrepreneurship by nature is the process of moving from chaos to clarity.

In the hope of creating some prospect of clarity in the world, most entrepreneurs identify an opportunity that they feel hasn’t been executed well or an area where they can bring a unique value-add.

Once the process of work begins, however, it turns to chaos. The very act of wanting to bring clarity into the world by proposing a solution to a problem results in a level of chaos.

How to start the business? Where to get funding? How to hire the best people? How to know who your customers might be? How to reach them? Where to work from? How to do all the tasks, administrative and otherwise? How to optimize for growth? And and and…

Welcome to the world of entrepreneurship where solving problems and operating in chaos is the name of the game.

Chaos theory for entrepreneurship

Chaos theory is the study of complex, nonlinear, dynamic systems and focuses on the unpredictability in occurrences and behaviors. Naturally, systems gravitate toward complexity. As such, they become increasingly volatile and susceptible to unpredictability, especially during periods of growth where added factors of complexity arise.

Yet even in seemingly stable environments, added complexity arises. Take tossing a coin, for instance.

Chaos theory suggests that are infinite ways to flip a coin. In his piece Chaos Theory and Strategy: Theory, Application, and Managerial Implications, David Lecy (1994) states “Not only is it impossible to toss a coin twice in exactly the same way, but on each toss the coin is subject to slightly different air currents, themselves a result to turbulent airflow”.

The bottom line is that even when business is stable, there are factors of complexity often outside of our control. That’s coin-tossing for you. That’s business. That’s life.

The conundrum of systemization

Is trying to start and scale a business chaotic in nature. To a degree yes.

So just get used to trying to scale a business in chaos? No.

I’ve been there and done that and trust me, it just isn’t fun. It means answering a million questions, the same questions, every day. It means chasing your tail and putting out fires. Or at least trying to put out fires.

When you’re leading a team, growing a business, looking after customers and clients, it can be very busy being all things to all people.

It’s busy but it isn’t productive. There’s a difference.

Recognizing the chaotic nature of the world of work can give us new insight, and wisdom. For example, by systemizing more, you give yourself more freedom. In other words, when you accept that the nature of entrepreneurship is chaotic but you bring more clarity through process, you aren’t changing the environment but you’re giving yourself the means to navigate through it effectively.

Give yourself and your teams the tools to navigate the chaos and you will begin to create the returns that enable you to thrive.

“The temptation to lead as a chess master, controlling each move of the organization, must give way to an approach as a gardener, enabling rather than directing. A gardening approach to leadership is anything but passive. The leader acts as an “Eyes-On, Hands-Off” enabler who creates and maintains an ecosystem in which the organization operates.” ~ General Stanley McChrystal in the book “Team of Teams”

The General may have been talking about applying this to military teams but if you think about it broadly, it applies to all teams.

The more you give your teams the knowledge and information they need, the more they’re likely to apply creative problem-solving in the areas that need it; strategy, growth, and customer happiness. The less time, energy and misery they’re likely to spend trying to come up with a system on their own.

I’m obviously talking here about systemizing process through knowledge sharing but you could apply this in a number of ways including just having a system for meetings that enable meetings to be fewer but more productive.

Essentially it’s about finding the systems that enable teams to navigate change whilst also enabling them to utilize the opportunities that abound during change.

The Compound Interest of Clarity, why 1% matters

“Compound interest is the most powerful force in the universe.”

— Albert Einstein

I want to talk about growth in relation to chaos and clarity because as entrepreneurs, that’s what we’re about; growing people and growing businesses.

I read a really interesting article just recently titled “The Elephant in the room: The myth of exponential hypergrowth” by Jason Cohen which contrasted hypergrowth against the quadratic growth of companies.

“In exponential growth, values grow by a multiple. For example: In year 1 you grow 10, in year 2 by 100, in year 3 by 1000 — each time the amount of growth is multiplied by ten. The compounding effect of multiplication causes the numbers to grow slowly initially, then skyrocket. The compounding effect gets journalists and VCs justifiably excited.

In quadratic growth, values grow by adding a constant amount more each time-interval, rather than multiplying a constant amount more each time-interval.”

It turns out that companies like Dropbox, Trello, and Hubspot have grown quadratically.

Please feel free to read the article and take away relevant growth insights. What I took from the article however is that 1% of clarity applied in a business over time makes a big difference.

At Whale, we recently put together The Future of Knowledge Sharing Report 2022, and here’s why;

• Fortune 500 companies lose at least $31.5 billion a year by failing to share knowledge (International Data Corp)
• Employees spend around 26 days each year searching for information, which is valuable time that could be undoubtedly better invested (Critical Knowledge Transfer Book)
• Inefficient Knowledge Sharing Costs Large Businesses $47 Million Per Year (Panopto Workplace Knowledge and Productivity Report 2018)

These are some crazy figures.

Can you take out the chaotic nature of business? No

Can you minimize the chaotic nature of entrepreneurship? I’m not convinced because, by its nature, it requires the ability to change direction, adapt and thrive where others cannot.

Can you however apply a small percentage of clarity to result in a springboard within chaos? Yes

A small bit of clarity applied results in a platform for quadratic or even exponential growth.

Things to think about when you’re having your morning coffee.