Panarchy: The Adaptive Cycle of Complex Systems

 Figure 8 cycle model of Exploitation, Conservation, Release and Renewal Phases of the Adaptive Cycle

The Adaptive Cycle Diagram

All complex organizations have a life cycle. They are born, they grow, they age, and they die. Often, a new version of the old system is reborn and goes through the life cycle again.

The model that has proven most useful to me in considering how to change these complex systems is the Adaptive Cycle (pictured above; for more versions of the model see Variations on Adaptive Cycle Model), also called the Panarchy Model. The adaptive cycle, slightly modified, is a useful  template for understanding how the purpose of an organization and its use of resources change throughout its life cycle.

Phase 1: Exploitation: A new organization of any kind focuses on making the best possible use of what resources they can appropriate to make their mission real. Although exploitation has a negative connotation, when you are scrambling for scarce resources to do good outcomes, you use the opportunities you find when you find them.

Gradually, your work produces more predictable use of resources, you develop a reputation for doing good, you build relationships in your sector’s stakeholder community and you grow. You begin to work to more permanently stabilize your organization and build resources you don’t need to use immediately.

Phase 2: Conservation: The organization begins to accumulate resources that are not immediately needed, but might be needed in the future, or for as yet undetermined purposes. The existence of those additional resources constitute a base of power and control in the larger ecosystem of which the organization is a part. Conserving those resources (not just money, but also expertise and general experience in the mission) also requires maintenance, repairs, re-organizations,training, and other activities that are not directly related to the mission that drove you in the earlier phase, but are necessary to keep the now substantial pile of resources that you have built up for rainy days, development of your rep, and non-mission political purposes. Maintaining this complex system of resources causes internal mission drift and starts reducing your flexibility in responding to changes in your environment. Basically, your first response to environmental change (if you notice it)  is to look to the preservation of your organization and its current inventory of resources (a kind of organizational narcissism). This cycle increases the fragility of your organization regardless of its apparent size or power.

Phase 3: Release: The cycle of conservation will eventually make the organization so fragile that some unanticipated disturbance in the environment will trigger a series of crises that will result in the disintegration of the organization from its conserved state. It will begin to lose its conserved resources. The usual response to the crises is defense of what is, as best as that can be done. The other alternative, of course, would be to completely rethink the organization from the ground up, but almost no one does this.

The release of previously conserved resources is not an ordered process. In fact, the breakup of the conserved resources (think forest fire) produces new resources that are not obviously useful to any existing organization.

Phase 4: Reorganization: Regardless of what shape resources are in, there are always pioneers who will make use of them, turning them into more organized resources (think weeds after a forest fire). As the free (unorganized) resources become more organized, it becomes easier to exploit them, and the cycle begins again.

The diagram points to other interesting aspects of this living cycle. What we think of as revolts occur as a response to highly conserved resources unavailable for mission related (sometimes ANY) use. Entrepreneurial mindsets are most useful in the exploitation phase and become less useful (and much harder to use period) in the conservation phase. Release can be slowed down, but not prevented. And maybe most importantly, the mere act of conservation puts serious and lasting constraints on what can be done with valuable resources.

The reality of such a life cycle has implications for how large, long lasting organizations generally operate, regardless of the intentions of their owners, managers, Boards, staff, or constituents. I will explore one implication in the next post.

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