The Two Loop Theory of Organizational Change is a model of change that Meg Wheatley and Deborah Frieze from the Berkana Institute first pointed at in their paper, “Using Emergence to Take Social Innovation to Scale.” In it, they suggest that change emerges in human systems out of a spontaneous series of local actions; and these actions link either organically or purposefully in ways that facilitate the development of integrated networks of relationships aligned in the pursuit of mutual interests and goals. For our Best-Practice Intervention purposes, Wheatley and Frieze's article is important because it suggests something that few if any OT practitioners have ever said out loud: Organizations in the midst of transforming themselves are also in the paradoxical process of living and dying.
TLO's Two-Loop Theory of Organization Transformation
Coaches and consultants familiar with the Two-Loop Model most often use the graphic just below to describe the simultaneous living and dying processes that Wheatley and Freize pointed toward as the paradoxical heart of every organization transformation. Anyone who's worked in an organization for any length of time is familiar with the "living" half of their model, i.e., the proposition that all organizations can be understood by thinking about them through a birth, innovation, and growth framework.
Before Wheatley and Frieze added their second loop to the picture, most change agents never realized the proposition this visual points at with its inclusion of its second loop: Any effort to extend the growth of a human system, especially a purposeful one like a modern business organization, automatically and spontaneously activates both the growth side of the "organizational life cycle" (i.e., germination, innovation, maturation, and rejuvenation) and the death side of this cycle (i.e.stagnation, disintegration, and decomposition). Even a simple "single element" change effort, no matter how small and self-contained, inevitably leads to the need to deal with both the living and the dying aspects of an organization transformation.
This is why TLO, in its Organization Transformation work, insists on explicitly addressing with our Thought Partners both sides of what we see as a " Two-Loop Organization Transformation Process." Whether we know it or not, whether we like it or not, whether we want it or not, organization transformations are two-sided coins; they are complicatedly and paradoxically simultaneous life and death experiences.
Important ot Lessons
We first learned about the Two-Loop Theory of Change while surfing the internet. We ran across a 2014 blog by Amanda Fenton titled "Exploring How Living Systems Change." Several months later, we discovered a second blog she'd published in 2012, titled "A Theory of Change: Two Loops." These articles led me to Wheatley and Frieze's "Using Emergence" article. With these resource in hand, we embarked on what's been a three-year journey looking for a viable approach to organization transformation. So far, this journey has taught us some essential lessons about working with organization transformations, and put us on the path to the Organization Transformation model that we're now offering. Here are the four lessons:
- Whether or not we acknowledge it, we have to pay close attention to both the living and the dying sides of transformation. If we want to launch a successful organization transformation effort, we need to support the disintegration cycle and the germination cycle, especially if we want to create for the people involved in both, the kinds of events and processes that they can receive and perceive in positive, developmental ways.
- From the very first, OT Thought Partners, coaches and consultants must recognize that successful organization transformations are going to clearly and explicitly ask people to transform their personal precepts and basic identities (both individual and organizational), as well as their old modes of thinking, feeling and acting.
- Organization transformations that succeed in asking for these types of contributions will create deep-seated anxiety.
- Consequently, from the start, we must bring to our OT work the ability to demonstrate what Carl Rodgers called "unconditional regard." At base, it means that those leading and facilitating an organization transformation effort must, in demonstrable ways, believe that every one involved in the transformation is a human being who is well intentioned, trustworthy, and deserves to be treated with respect and dignity.
Elsewhere, we've said "TLO's 8 Element, 2 Loop, 3 Horizon model of organization transformation is the conceptual framework we've developed...to help us make sense of...our twenty plus years worth of...OT consulting assignments." Now, at the end of this 2 Loop page, we can point you towards one of the ways that two of the three key facets of TLO's theory -- the "8 Elements" and the "2 Loops" -- are interdependent.
Some of the toughest, but most important transformational work involves the integrated, simultaneous living and dying that has to take place among an organization's 8 Elements. For example, in every transformation, the organization's existing business model must do some dying. And right alongside this dying, a new business model must be germinating, fostering the emergence of new profit center experiments. Likewise, with an organization's existing Control and Coordination Element must be disaggregating itself, perhaps emerging as a new cooperative philosophy of supervision. Bottom line, for an organization to be transformed, all 8 Elements must die and be reborn across across and within a reasonably simultaneous time line.