It is true, left untended, things do tend to fall apart. It’s the law of the universe. I learned this at college in engineering as The Second Law of Thermodynamics and the phenomenon is known as Entropy, that is, the natural tendency towards disorder and chaos. This explains why hot cups of coffee go cold, cut flowers wilt, and why the paint peels off your garden fence.

So, what has this got to do with business? Well, quite a lot, actually. The implication is that the structures, systems, and ways of working that enable our businesses to compete and thrive are also subject to this tendency towards disorder and chaos if they are left untended.

Businesses need to innovate, change, and refresh themselves continuously even if the overall strategy and competitive environment remain the same. Coasting along on the back of past success is not an option for the long term.

When an organization reaches a plateau, eventually focus wanes, the edge is lost, things get stale, and ultimately the company falls behind. The old bromide “if it ain’t broke, don’t fix it” is not the way to think if you want to be successful in the long run.

Even if things are good right now, asking yourself how they can be made better regardless, is going to keep you, as a business owner or manager, motivated and inspired, keep your people engaged, and ensure the long-term success of your business.

There is no sense in waiting for things to go wrong, for systems to begin to fail, or for some crisis to arise, to get into this work of innovation and continuous improvement. It will be far too late by then. Indeed, many of the business casualties you read about in the news, whatever they say about the economic climate, the market, or the competitive environment are victims of internal entropy.

Therefore, taking a critical, yet positive attitude to constantly reviewing and redesigning your configurations, practices, ideas, and attitudes will help you to impose order on this natural tendency towards decay, disorder, and chaos.

Look out for those processes and structures that have become stale, business units, products, or services that are underperforming, market segments or customers that are no longer contributing positively to profitability and so on. These can all be identified through some easy analysis of operational and financial metrics and data that you already have. This should be an ongoing and explicit practice in the business, sponsored and driven by top management.

In my work, I find that it is those companies that are already doing well that are most open to taking this constructively critical attitude to what they are doing. This is because they have the mental bandwidth, open attitude, and resources to do so. Those that are consumed by entropy already rarely have these attributes and it can be very difficult for them to break out of the downward spiral.

In one recent example, a distribution company that has been enjoying considerable growth and success through the online channel is working with me to radically change their approach to order picking and online fulfilment to improve responsiveness, significantly increase productivity, and massively augment the utilization of their facilities. This is delivering huge business benefits in the short term setting them on an excellent footing for further advances and improvements in the future.

If you would like to discuss how I can help you to spot where entropy is at work in your business and to design new, fresh, and innovative ways of improving performance in tangible, measurable ways, you can contact me directly on +353 86 811 6030 or, wherever you are in the world, to start the conversation.

21st Century Warehousing: Strategy and Operation

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