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Theory O - Understanding Performance and Relevance

RPO The Relevant and Performing Organisation

Theory O deals with the Relevant and Performing Organisation (RPO). It brings the other three orgamatics theories together. An Orgtologist must facilitate High Performing Organisations (RPO's) and Individuals (RPI's). In orgtology, orgamatics deals with RPO's and organamics with RPI's.

The task of Org is to organise activity. The aim of activity is to produce outputs that has a favourable effect. Org ensures meaningful activity through TEIP. This is Intent (T), Energy (E), Orgtelligence (I), and Purpose (P). Org must function within an environment which must sponsor its existence. An environment also creates competition, poverty, politics, etc. This will disrupt Org. Disruption creates disorder. We use entropy to measure the disorder within a system. A Force of Entropy (FOE) thus threatens the existence of Org. To combat FOE, Org needs TEIP. Together FOE and TEIP keep the activity of Org meaningful.

What is Org?

Orgtology is about understanding organisations. It thus makes sense to know what an organisation is. One will agree that you do not create a child when registering it with a Home Affairs department. In so, registering a company does not create Org. Like human life, Org begins in consciousness. This is an awareness of purpose and an intent to surviv...

Purpose (P) is neutral. E.g., a boxer is a boxer. Yet, each boxer uses own skill, physique, coordination, reflex, surprise punches, etc., etc. This means that not all boxers will measure the same against the purpose of boxing. The same goes for banks, governments, ICT firms, etc. To create hierarchy, one must measure Org against its purpose. Entities with similar purpose are never equal in terms of relevance and performance. For Org to survive, TEI must be greater than P. The TEI/P calculation will give the TEIP of Org. This is an ability to be an RPO. We will know whether Org is indeed an RPO if its TEIP outweighs FOE. If TEIP is greater than the disorder within its environment, Org is an RPO. This is because Org is stronger than the entropy that it must face. Thus, RPO = TEIP / FOE. That is my thesis statement. Please note that the symbols I use are to shorten the explanation. They do not denote any existing mathematical symbols or constructs.

To work with the thesis that "TEIP = TEI/P", which flows to "RPO = TEIP/FOE", we must grasp two concepts. They are "performance" and "relevance". I give an orgtology perspective on these concepts below.

The Performance / Relevance Crucible

TEIP has both finite and infinite properties. Energy or resources, and systems intelligence (Ii) creates the performance of Org. They draw from the same resource pool and are under full control of Org. Their properties are thus finite, which allows Org to drive them through efficiency. Intent (T) and human intellect (It) ensures the relevance of Org. They are abstract and not bound by algorithm. Their properties are thus infinite, which compels Org to drive them through effectiveness.

Because the properties of performance and relevance differ, we measure them differently. Yet, they both serve Org, therefor there must be something that binds them. Both, performance and relevance evolve from- and revolve around purpose (P). In so, we must measure TEI against P. This means that to understand performance, we must measure E(Ii) against P. To grasp relevance, we must measure T(It) against P. To understand both performance and relevance, we must measure TEI against P.

The ability to be a Relevant and Performing Organisation

The human body functions on efficiency and survives on effectiveness. In orgtology, efficiency drives performance, whilst effectiveness ensures relevance. No person knows exactly what goes on in his or her body. We have some idea, but that's about it. The human body runs on implied intelligence (Ii). It uses energy and algorithm to run itself. You do not have to think about breathing or digesting. That is efficiency at its best. But to survive and be relevant needs every one of your five senses. Humans are designed to respond to an outside world. Org should design itself to do the same.

Jointly, the ability to perform and stay relevant is Org's ability to be an RPO. This ability will ensure that Org does the right things in the right way.

Ability to be relevant and performing creates the ability to be an RPO

Both performance and relevance fluctuate through time. In so, they become an ability of Org, because they must happen the whole time. Therefore, the relevance and performance of Org depends on its ability. Below I discuss how we assess the ability to perform and stay relevant.

The ability to perform

The shoemakers of old had lots of skill. They also put a lot of energy into their craft. They were performers. Yet, the purpose that shoes fulfil, became greater than their energy and skill. People need different shoes for doing different stuff. Shoemakers could not keep up with this demand. Machine intelligence replaced them. Factories now have energy efficiency and process intelligence far beyond that which any shoemaker had. The ability of factories now outweighs the purpose that shoes serve. We know this because shoe companies now drive the demand for shoes. With machine intelligence and clever marketing campaigns, shoe companies can set fashion trends. This is the case with Bata, Nike, Hi-Tec, etc. The average person has more than four pairs of footwear. A cheap pair of Jimmy Choo shoes will cost you around 4000USD. When purpose begins to serve Org, Org becomes a high ranking RPO.

Together resources and systems intelligence create an ability to perform. Org uses resources as its energy. Resources feed systems and processes that in turn deliver outputs. This is an efficiency exercise. High performance means that, on average, an entity puts more out than its peers. This should be the case, even if all measured entities had similar inputs. With "peers" I mean entities that have the same static purpose. A boxer boxes, a shoe factory makes shoes, etc. An industry is a container for organisations with similar purpose. Org will outperform its competitors if it "owns" its industry.

We must weigh the strength of our resources and the intelligence of our systems E(Ii) against purpose. This will show our ability to perform.

The ability to perform = energy x implied intelligence / purpose

When we measure E(I i ) against (P), the answer should be greater or equal to one. Where the answer is less than one, it shows underperformance. The greater the answer, the greater Org's ability to perform.

As mentioned, the equations given throughout this post are metaphorical mathematics. They present a narrative through face value logic. In so, they guide us to assess performance and relevance. They also lay a foundation for further research.

The ability to be relevant

In 1845, shoe factories supplied on demand. Today, shoe factories create fashion and value through mere brand. At first, they were receptive suppliers. Now they are projective agents of change.

Something is relevant if it is meaningful to those who use it. There is no point in producing a product or service that no one wants. Sponsorship is the true test for relevance. Any person or organisation wants an environment that fully sponsors them. To negotiate this, they use desire (T) and abstract thought (It). More proper terms would be intent (T) and tacit intellect (It). Governments should aim to excel at service delivery. This will ensure that citizens and investors willingly invest. Young people should study and experience things that enable them to make a living. Companies should strive to significantly satisfy customer needs. To create intent (T) you must conceptualise the future; this is the crux of relevance. Yet, for intent (T) to materialise, we must create strategy that will create the needed change. In so, we satisfy a future need. The trick is to create an organisation today, that will be relevant tomorrow. Yet, to survive today, we must perform. In so, todays performance will enable tomorrows relevance. In turn, tomorrows relevance makes todays work meaningful.

Implied intelligence (Ii) is of little help when creating intent (T). Org needs people who have experience and the "know how" to drive change. These individuals are few and far apart. They also come at a lofty price. Yet, even having knowledge and experience is not enough. You need insight to the future. It therefore becomes a matter of leadership.

Intent and tacit intellect T(It) will secure the future of Org. Where we measure T(It) against purpose (P), the answer should be greater or equal to one. Where the answer is less than one, Org becomes irrelevant. We can grasp how able Org is to stay relevant by measuring T(Ii) against P.

Ability to stay relevant = intent x tacit intellect / purpose

Practical Application

Tacit intellect combined with intent, T(It), will enable Org to stay relevant. Resources and implied intelligence, E(Ii), will ensure that Org performs. To contest disorder, Org must efficiently perform and effectively stay relevant. To combat FOE, ORG needs to be an RPO. We measure an RPO against sponsorship and entropy. An environment will not sponsor an entity that does not perform in a relevant way. Where Org loses relevance, its performance will weaken. Disorder will set in and sponsorship will decrease more.

Disorder can be many things. To the private sector it is competition. For the public sector it is dysfunctional politics and policy. To the non-profit world is lack of public sympathy. In orgtology entropy is then the measure of the things that disrupts Org. This could be competition, bad politics and policy, lack of sympathy, etc.

The relationship between entropy and sponsorship is inverse. Where there is full sponsorship, there will be zero entropy. Where there is no sponsorship, there will be 100% entropy. As sponsorship increases or decreases, FOE will weaken or strengthen.

The more disorder the environment of Org presents, the more it will need strategy. That is because you cannot combat external threats with efficiency. E.g., one of my clients is a sugar corporation. They are extremely efficient. Their process intelligence and resource management is beyond comparison. Yet, this efficiency had no effect on a worldwide declining sugar price. Doing things right will not change the fact that you do not need sugar cane to make sugar. Nor will it change the minds of billions of people who believe that sugar is bad for them. The only way to deal with these external threats is disruptive innovation. That is what Apple did with the iPod. They did not compete with Sony Walkman; they made them irrelevant.

The case can also be that an environment shows truly little disorder. Instead of strategy, Org would then rather focus on process efficiency. As disorder increases, the fight for sponsorship will become fierce. In a competitive environment, you will need a competitive strategy. This is different from disruptive innovation. When competition is so rife that all odds are against you, you must be the disruption. A disruptive innovation strategy is the most dangerous of all strategies. It could put you in the lead or secure a quick death.

For process efficiency, one will need efficient use of resources [E(Ii)/P]. For disruptive innovation, you will need intelligent strategy [T(It)/P]. For competative strategy, you will need a bit of both [TEIP/P].

The given examples show how Theory O drives the strategic choice of Org. The more sponsored an entity is, the more it will focus on performance. It will thus be an operationally focused organisation. The more disruptive the environment of an entity is, the more it will focus on relevance. This creates a strategy driven organisation.

The orgamatics sponsorship / entropy relation.

Where no competition exists, you own the cake. Here you will be process efficient. Where mild competition exists, find ways to get a bigger slice of the cake. Here you will compete. But where there can be only one, you must go for the kill. This means that you must bake a better cake. Here you will innovate to disrupt.

The parts that make Org are intent (T), energy (E), intelligence (I), and purpose (P). TEIP shows the ability of Org to be relevant and performing. We get TEIP through TEI/P. Yet, Org cannot exist outside a world of time, matter, and space. In this world, there is a force that will consistently work towards the irrelevance of ORG. This is the force of entropy, or FOE. It is always there, thus it is a constant denominator. If Org wants to survive, its relevance and performance must be greater than FOE. This might seem abstract. If you are in the private sector, simply replace "FOE" with "competition". In such case, where competition is greater than TEIP, Org will not be an RPO. In the public sector FOE becomes the lack of taxpayer confidence. In the non-profit environment it becomes the unwillingness to sponsor.

An RPO is TEIP over FOE.

Whichever shape FOE takes, it creates disorder. We will always measure the TEIP of Org against the disorder that it must face. Great disorder requires strong TEIP. To survive and thrive, the relevance and performance of Org must always be greater than the force of entropy.


© 2091-10-08 Derek Hendrikz

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