Essays and perspectives

In my leadership trainings, I increasingly hear the same concern from executives:
despite growing effort, results are not improving at the same pace.

Both leaders and employees are overloaded with expanding responsibilities.
The organization consumes more and more energy — yet real value creation stagnates.

The issue is often not people or lack of commitment.

More frequently, the root cause lies in the fact that the organization’s architecture — its operating mechanisms — no longer matches the demands of a changed environment.
Management concepts that worked in a stable context tend to fail in today’s VUCA environment, where:

• geopolitical instability and new power dynamics affect supply chains, pricing, and investment decisions
• new strategic actors have emerged in global markets
• customer behavior has become more volatile and less predictable
• decisions must be made faster, often with limited and incomplete information

When an organization’s decision framework, operating logic, and distribution of responsibility are still based on yesterday’s assumptions, a phenomenon emerges that physics describes as friction.

In organizations, this friction becomes visible as:

• ambiguity and unclear accountability
• repeated re-decisions and backtracking
• accumulation of approvals and coordination layers
• situations where everyone is busy, but no one is truly steering the whole

The more complex the external environment becomes, the more critical internal clarity is.
Without it, energy is consumed by internal tensions and firefighting rather than by value creation.

In this new context, leadership needs to be viewed from a different angle — not in terms of how much effort is invested, but how much of that effort actually turns into value.

From thermodynamics, we know that no system operates without friction; some energy is always lost to entropy. The question is not whether friction exists, but how much of it is structural and avoidable.

Over my 30 years as a leadership consultant and trainer, I have worked with more than 900 organizations. Based on these experiences, I have developed a practical efficiency-based management approach, aligned with thermodynamic principles. It focuses on designing leadership and organizational architecture so that:

• desired behavior is the most logical, simplest, and least resource-intensive option
• decisions are made at the appropriate level with minimal friction
• energy flows toward value creation rather than toward maintaining the system itself

I’m curious:
Where do you most clearly feel in your organization today that a lot of energy is being spent, but disproportionately little value is being created?
What, in your view, would need to change?

Margus Alviste is a leadership consultant and organizational architect with 30+ years of experience working with growth-stage organizations and investors.