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The Loop Approach
How to Transform Your Organization from the Inside Out
- Read in 15 minutes
- Audio & text available
- Contains 9 key ideas
The Loop Approach (2019) presents a systematic approach to the transformation of organizations. Its toolkit of ideas and methods is designed to help even the largest organization change its bad habits, thus enabling it to adapt to the challenges of the future.
Key idea 1 of 9
The pyramid structure that defines most organizations is no longer suited to the conditions organizations face today.
During the Roman Empire, the Emperor reigned supreme. He sat at the top of a hierarchical pyramid, issuing orders to minions below him.
But while the Roman Empire is long gone, the pyramid structure upon which it was based is not. In fact, most of today’s large organizations and companies rely on a top-down system of organization based on hierarchy. At the top is the equivalent of the Roman Emperor – the CEO – who makes decisions and passes down orders to the bosses below him. From there, the orders move down the tiers of managers and sub-managers until they reach those at the bottom of the pyramid – the workers.
This system is extremely prevalent because it’s effective in organizing large groups of people into an enterprise. That’s because this structure reduces complexity. It’s based on a simple principle: everyone must follow orders from above. It’s largely thanks to the pyramid structure that the Roman Empire came to rule over vast swathes of the Western world. It’s also why so many companies and organizations have conventionally adopted this structure.
But while the pyramid structure worked well for the Roman empire, and until recently, for many large corporations and businesses, that structure is not suited to dealing with the uncertainties that organizations face today.
That’s because times are changing. The business environment is more challenging than ever. For one thing, technology is changing at the speed of light, which means that those businesses that are unable to adapt fall by the wayside. What’s more, new competitors and business models emerge every day, adding further to the uncertainty.
This is where the pyramid structure falls short. While this structure is effective when it comes to executing plans, it’s slow and clunky when it faces change and must adapt.
This is especially true of large organizations. Why? Because they’re so big. When an organization’s environment changes, for instance, it’s not usually the boss at the top of the pyramid who notices. It’s the workers at the bottom, who interact with the surrounding environment directly. But by the time that change in conditions is communicated up the chain of command so that decisions can be made in response, it’s often too late. Faster, more agile competitors have already reacted and moved ahead.
For all these reasons, it’s time to say goodbye to the pyramid structure and hello to the Loop Approach.