Organizational entropy

Jun 26, 2022

Tom Godin

It’s up to leadership to recognize entropic degradation in their firms and respond energetically to restore order.

In January a tweet about Claude Shannon’s equation for information entropy caught my attention. Remembering little about entropy, I dove in.     

Britannica defines entropy as “the measure of a system’s thermal energy per unit temperature that is unavailable for doing useful work. Because work is obtained from ordered molecular motion, the amount of entropy is also a measure of the molecular disorder, or randomness, of a system.”

The higher the entropy in a system, the greater its disorder. In closed thermodynamic systems, entropy increases with time. The system becomes more disordered unless and until some external source of energy restores order.

The entropy of an AEC firm increases with time too. Its disorder increases and the amount of energy that is available for useful work decreases. In his book Leadership is an Art (which I recommend), author Max De Pree lists 20 signs of organizational entropy. Among them:

  • A tendency toward superficiality
  • A dark tension among key people
  • No longer having time for celebration and ritual
  • When people begin to have different understandings of words like “responsibility,” “service,” or “trust”
  • When problem-makers outnumber problem-solvers
  • When people speak of customers as impositions on their time rather than as opportunities to serve

It’s up to a firm’s leaders to recognize entropic degradation in their firms and respond energetically to restore order and increase the organization’s capacity to be useful.

Claude Shannon’s entropy equation dealt with information theory – a field he pioneered. Information theory – broadly – deals with transmitting information across a noisy channel.   

According to Wikipedia, “The core idea of information theory is that the ‘informational value’ of a communicated message depends on the degree to which the content of the message is surprising. If a highly likely event occurs, the message carries very little information. On the other hand, if a highly unlikely event occurs, the message is much more informative.”

Rare information – or information that describes a low probability or unexpected event – has more Shannon entropy. Messages of these types require more bits of encoding – more energy – to make it through a noisy channel. 

So, what?

Put practically, if you need to communicate something with high Shannon entropy, you need to put time and effort toward making sure the message doesn’t get corrupted by noise.  One of the best ways you can do this is to send the message yourself and directly to the people who need it. And don’t be surprised (or disappointed) that you need to send that message a few times.

Be aware of entropy in your firm and in your communications! Leadership is a high contact activity. Correspondingly high energy levels are required. 

Tom Godin is a strategic planning advisor at Zweig Group. Contact him at tgodin@zweiggroup.com.

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Zweig Group, three times on the Inc. 500/5000 list, is the industry leader and premiere authority in AEC firm management and marketing, the go-to source for data and research, and the leading provider of customized learning and training. Zweig Group exists to help AEC firms succeed in a complicated and challenging marketplace through services that include: Mergers & Acquisitions, Strategic Planning, Valuation, Executive Search, Board of Director Services, Ownership Transition, Marketing & Branding, and Business Development Training. The firm has offices in Dallas and Fayetteville, Arkansas.