Reinvention of businesses. Natural Intelligence technology. Alexander Blinkov

cycle, the same main four phases, four stages are distinguished:

      Bringing goods to market. First appearance of the product on the market. Characteristic is a small increase in sales volumes and, accordingly, the profit is minimal or non-existent.

      Height. A period of rapid growth in sales volume if the product is accepted by the market and the demand for it increases. Profits also increase as sales increase.

      Maturity. Sales volumes are significant, but further sales growth is not observed. Profit at this stage has stabilized, since additional costs are not required to bring the product to the market.

      Decline, withdrawal from the market. This phase of the product life cycle is characterized by a significant decrease in sales volumes up to a complete drop in demand for this product. Profits plummet to zero.

      The so-called BCG matrix is a tool for strategic analysis and planning in marketing. Created by the founder of the Boston Consulting Group (BCG) Bruce D. Henderson to analyze the relevance of the company’s products, based on their position in the market relative to the growth in demand for these products and the market share occupied by the company selected for analysis.

      This matrix highlights four possible product roles for the company producing it, and the names of these roles themselves also indicate the «age character»:

      «Question mark». Low market share, but high growth rates. The outlook is not clear.

      «Stars». Under conditions of substantial investment, they show high sales growth and a high market share.

      «Cash Cows». High market share but low sales growth.

      «Dogs». The growth rate is low, the market share is low, the product is generally low profitability. Looking ahead, we note that, according to the BCG methodology, the only correct marketing strategy regarding «dogs» is the closure of such projects, the withdrawal of products from the market. Later, we will show examples of how just such a stagnant market, according to another taxonomy – «scarlet ocean», turns out to be fertile ground for the emergence of bifurcations – completely new, innovative business models.

      System dictates

      Now that there are clear parallels between the life stages of social systems of completely different kinds and their products, let us describe the very phenomenon of the life cycle in the universal language of synergetics. Hoping that this will help us reach the same universal rules of behavior within different systems – projects or companies.

      If we introduce some action potential (we will not go into what physical meaning this value has), then during the life of the System, the potential from the zero level reaches a maximum at the break stage, and then drops to zero (the middle plot of Fig. 10).

      Formation. The main direction at the stage is expansion. The system emerges, it needs to grow, expand, take shape – and this requires resources. Expansion for systems of various nature can be territorial or market. Capture, expansion, obtaining resources from outside. Expanding your living space is the main trend. The impulse of the development of the system is directed outward – capture, conquest, expansion. Growth of potential due to the extraction of resources around. Where else can a newborn get them from!

      Peak – Expansion Momentum exhausted.

      Rise. Which actually means the beginning of the movement by inertia. Establishing a balance with the surrounding hostile world, securing the necessary flow of energy from the outside. Sometimes a painful transition (breakdown) from capture to stability and protection of what has been achieved. From the era of «warriors» to the era of «administrators». From «knights» to «traders».

      Recession. The transition to protection from external challenges, the use of extracted resources to strengthen one’s own structure within oneself. Digestion of what has been achieved by the members of the system. The economy of managing – including, as a consequence, the streamlining of behavior and structure, and for this, the development of knowledge and culture is necessary. In the end, crystallization is the fixation of form, the concreting of order, patterns.

      The potential, in turn, can be considered as a certain rate of entropy reduction in a particular self-organization (upper graph of Fig. 10). The system spends energy both on expansion and on the development of order, which is reflected in the form of an increase in negentropy – information, including coded in the form of scientific achievements, works of art, etc.

      «Negentropy is a philosophical and physical term, formed by adding a negative prefix neg- to the concept of entropy, and denoting its opposite. In the most general sense, it is opposite in meaning to entropy and means a measure of orderliness and organization of the system or the quality of the energy available in the system.»

      Initially – a minimum of order, at the peak – active ordering, including in the form of administration through a large number of laws, instructions, regulations, descriptions, etc. On the decline – necrosis, when a lot of information has been accumulated, order is cast in granite, but energy, the ability to act is no longer in the system.

      Fig. 10. Thermodynamic metaphor of Gumilev’s theory

      The derivative of the potential function (bottom graph of Fig. 10) reflects just the nature of people’s behavior that at this stage of the life cycle most of all reflects the system’s imperative – an informal collective aspiration. The vertical scale can be called the axis of passionarity, with the most active progressive/knightly activity at the top, and the most active conservative/philistine activity at the bottom.

      We emphasize that, unlike Lev Nikolaevich, passionarity for us is a derivative (in the literal and figurative sense) of the systemic charge. Like electric current or temperature. As a system indicator of the internal movement of particles – people. And not vice versa – not an internal force that drives every person and thereby changes the system. And in this understanding, we consider passionarity as a systemic dominant, the result of the action of internal, so-called, feedbacks in the system – positive and negative. These feedbacks close on any members of the system – on groups and on individuals and encourage, or vice versa, suppress certain actions and ideas. Exactly how these feedbacks work is a complex question and not very important in our context. We will look at these connections in more detail below.

      Now it is important to understand that the total effect of feedback on our actions in the system changes with its age! And this pressure within the system at each stage of its life stimulates different types of our behavior and our thinking.

      Man, however, is not a one-dimensional, binary being: active/passive. Our actions are largely determined by our psychotypes, various character traits and abilities.

      It can be assumed that the very activity of the individual is an impulse, a vector, unchanged in magnitude, but the direction of the application of our forces changes according to the social dominant.

      Passionarity, like a psychotype or character, can be a complex characteristic. The derivative of the potential can determine the projection of various personality traits that is most in demand by the current state of the system: let’s put aside upwards on the vertical axis – the desire for creative activity, downwards – towards consumerism, horizontally to the left – the predominance of instinctive reactions, to the right – mental activity. Then the points on the passionarity curve will be located on approximately the following trajectory – see Fig.11.

      Fig. 11. Passionarity as a systemic dominant of selection

      And this is already a result that can be used for self-diagnosis for the compliance of individual actions with the «age characteristics» of your company, for example.

      So, each organization overcomes successively several stages of development.