Manifesto: Why do companies suck at evolving?

Because they are stuck in the reorg trap.

This is the Outcome manifesto.

The way companies evolve sucks … and the bigger they are, the more they suck

This is a frustrating dilemma. At a macro level, the inability to evolve destroys productivity and our collective innovation potential. At a human level, it makes work less fun.

Most of us know this in our guts, whether we work at a fast-growing startup (growing pains) or at a large established enterprise (bureaucracy).

The end game for companies is the “death spiral of bullshit”: success -> growth -> more teams -> harder to align ->  more coordination  -> more meetings -> less work gets done and builders get frustrated -> builders leave -> nothing gets done.

But why do companies suck at the evolution game?

Because companies evolve through reorgs … and reorganizations suck!

Reorgs are painful, slow, difficult to orchestrate, and often fail to solve the problems they intended to address in the first place. At its worst, a reorganization merely boils down to moving boxes around an org chart (a.k.a. rearranging the deck chairs on the Titanic).

Regardless of the outcome, by the time a reorganization is over, nobody wants to hear about change anymore. The organization has developed "change antibodies" which undermine its ability to adapt and evolve for years.

Reorganizations suck because each reorg attempt actually diminishes the adaptive power of a company. It’s a tool that becomes more blunt and less effective the more it is used. The opposite of continuous improvement.

If reorgs are so bad, then why are companies stuck in the reorg trap? 

Because when companies are captured by the ‘machine mindset’, then reorgs are perceived as the only tool in the evolutionary toolbox.

The ‘machine mindset’ is the view that companies are highly structured and mechanistic entities, where various components and processes are designed to operate in a predictable and controlled manner to achieve specific objectives.

Under that paradigm, teams and people are viewed like interchangeable cogs of an organization that can be perfectly designed on paper, and perfectly controlled from the top.

Under that paradigm, a reorganization seems like a perfectly rational solution to transform an organization.

How can we escape the reorg trap? Evolve DIFFERENT!

Companies that want to escape the reorg trap must change the way they play the evolution game and replace centralized top-down reorganizations with a decentralized evolutionary process.

This requires first a mindset shift from the ‘machine mindset’ to the ‘ecosystem mindset’.

The ‘ecosystem mindset’ is the view that companies work like dynamic and interconnected entities, much like a natural ecosystem, where various elements interact and adapt collectively to achieve sustainable growth and resilience.

In this perspective, the emphasis is on nurturing a culture of innovation, collaborative experimentation, and continuous adaptation to thrive in ever-changing business environments rather than adhering to rigid, machine-like structures and processes.

Under that paradigm, a new evolutionary path opens up: a decentralized evolutionary process, that empowers every individual, in every team to leverage their unique insights to propose and run rapid organizational experiments to increase motivation and flow of value.

Under that paradigm, companies can emulate the evolutionary process found in nature: keep what works and discard what doesn’t. 

In doing so, companies can match the adaptability, response speed, and resilience of forests, cities, or even our own bodies.

Ok, but HOW?

When viewed through the lens of the ecosystem mindset, decentralizing the evolutionary process means empowering those who have the deepest insights about a problem to ACT on their insights through an evolutionary loop.

We believe that the most effective evolutionary loop is nothing other (and nothing less) than the application of the scientific method to the development of organizations: observe, hypothesize, experiment, learn, repeat.

While this sounds good in theory, it is hard to put into practice. How do we avoid free-for-all chaos and loss of coherence as a collective?

In the wise words of James Clear (Atomic Habits): ‘We don't rise to the level of our goals, we fall to the level of our systems’.

To empower teams (or teams of teams), to continuously and iteratively run their own independent experiments AND maintain a global sense of unity and coherence, the evolutionary loop must be run within one shared canvas, with one shared language, with tight feedback loops to cash in learnings and progress.

This is where technology comes in: companies need a digital system to run a highly effective decentralized evolutionary process at scale. Where decentralized experiments actually compound on each other, instead of tearing the organization apart

Our mission is to give companies the power to evolve and thrive forever

We want to give every team, inside every company around the world the power to continuously reinvent themselves by harnessing the single greatest force in the universe: evolution.

Solving this problem at scale will unleash the massive amount of productivity that is still trapped under 120 years old legacy management systems that no longer fit our fast-changing reality.

We are doing what we are doing because we want to change the world! 🚀

This is a hard problem, but one that has massive implications at scale. In solving this problem we have the potential to touch the life of every human being for the better part of their lifetime. To make work more meaningful, more fun, more creative, and more productive.

The founders of Outcome - September 5, 2023.