Flow State, Part Three

— Continued from Last Week —

Over the course of the last two weeks, I’ve written about the early years of our business start-up, the Schweser Study Program for the CFA Exams, and how we entered a state of flow—both individually as entrepreneurs and as a small business unit. Last week, we used Mihaly Csikszentmihalyi’s eight elements of flow to help frame why we were able to achieve a state of flow. In the conclusion to this series, I’d like to add to this list by providing three more conditions that are required to promote an environment where flow states can be achieved in larger, more mature businesses.

Now back to the story…

As the 1990s marched on, our small business grew each year. Remember the fax machine from the first installment in this series? It was really getting a workout. Since the business was centered in Carl’s home, he and his wife would wake up and head downstairs to their den/home office to find the floor strewn with completed order forms that were ejected from the fax machine overnight. From 1991 to 1996, order volumes increased in the triple digits year-over-year and our live seminars would routinely sell out within a few weeks of announcing new dates.

To facilitate this growth, we added customer support staff, purchased the latest computer hardware, and built a clumsy but functional order entry system in Microsoft Access. We attempted to innovate by adding ancillary study tools like audio cassettes, flashcards, and videotapes, but the core of the business remained our study notes and live seminars. After 1996, most of our energy went into refining our core materials and hardening systems to accommodate growth.

Put simply, we were rapidly moving from a flow state to routine. Reentering a state of flow became harder and harder as routine set in. By the late 1990s, we were by far and away the dominant player in the CFA education space, but growth was slowing and entropy became more difficult to stave off.

If you’re a student of entrepreneurial case studies, this move from flow state to routine is quite common and there is an organizational size where the fast-moving, “family-style” atmosphere gives way to office politics and entropy. The question is this—as organizational size and complexity increases, how can we achieve balance between flow and routine? How can we reestablish the conditions within which flow has a chance to come out and play?

Here are some recommendations.

1. Maintain A Maniacal Focus on the Customer

During the latter stages of rapid growth, many business leaders lose sight of their customers’ needs. Instead, “business hardening” and compliance take precedence, and the lens of the organization’s leaders turns inward. Although some level of inward focus is necessary as the business grows, getting the balancing act between inward and outward focus is essential to creating an organizational culture that can support more flow states. 

In addition to losing external customer focus, it’s also easy to lose sight of who the customer actually is. Over time, consumer needs shift and change. The customer persona—or profile—can also change significantly as time marches on. When the organizational eye gets distracted with an overtly inward focus, it’s easy to miss subtle, but important changes in who your customers are and how to find them.

In the early years of the Schweser Study Program, Carl and I were lock-step with our customers—primarily because we were on the road for three months straight every year teaching and listening to what our customers required of us. Their success was our success. I can directly attest that once the business got bigger, there were times when we lost sight of the customer and we could see a direct correlation between our results and our customer focus (or lack thereof).

2. Continually Improve and Enhance Organizational Clarity

When a business is small, the number of products and/or services offered to consumers is also small. The employee base is likely also small. As a result, it’s much easier to create and communicate organizational clarity to stakeholders—both internal and external—in the form of purpose, vision, short- and long-term goals, well-defined roles and responsibilities, visual management tools, and incentives. As a business grows, clarity becomes much more difficult to achieve and maintain.

The work necessary to enhance organizational clarity is viewed by some as non value-adding as it often feels like this work is primarily internally-focused and runs against the grain of point one above—to have a maniacal focus on the customer. While this can absolutely be the case with a poor attitude going in, you will get great results from engaging in organizational clarity exercises if the work is viewed through two lenses: 

• Lens one is to ensure that clarity exercises of goal setting, long-range planning, development of strategy statements (purpose, vision, values, behaviors), etc., are done in service to the customer.

• Lens two is to remember that your people are your most valuable asset. Allowing them to muddle through the mud of opaqueness and obfuscation is a sure-fire way to promote routine and the status quo in favor of innovation and enabling new flow states to thrive.

3. Adopt the Tenets of Organizational Health and Continuous Improvement

This may also seem counterintuitive to some, but installing the tools of organizational health and continuous improvement into your business’s management operating system as it grows will allow for more opportunities to enable new flow states and not less. Put simply, organizational health is all about establishing and nurturing organizational trust. Continuous improvement boils down to (a) respecting your people, (b) identifying and minimizing waste, and (c) maintaining a maniacal focus on the customer.

If trust is nowhere to be found, if no one knows what their colleagues are doing, if waste and entropy abound, and if the customer is a mystery, then achieving an organizational flow state is highly unlikely. I’m not saying that it’s impossible, but to find flow in a large, chaotic organization with a toxic culture would be a real oddity.

Flow versus Flow State

I want to be clear and clean up any confusion that may linger in your mind. Organizational flow is the existence of smooth and efficient handoffs between individuals and teams within the business. In an environment of organizational flow, everyone knows what everyone else is doing, goals are clear, incentives are clear, and results are transparent and shared. Alternatively, an organizational flow state is an episode of product innovation or productivity that is transformative to the business. 

My thesis is that in larger organizations, achieving a flow state is dependent upon the existence of flow. The point of this three-part Muse is to illustrate an example of achieving both a personal and organizational flow state in a real-world setting (Schweser Study Program) and to use that example as a springboard for describing (a) why achieving a flow state becomes harder as a business grows, and (b) how to increase the likelihood of capturing the magic of a flow state in larger organizations through the installation of organizational health and continuous improvement tools in your management operating system.