What businesses look like from the inside - chaos and order in business operations
“I ran HR at Square, […], and I used to meet with every employee at Square, and I remember starting part of my conversation with every new hire by saying: “you’re about to walk into this company that is reveared and has an unbelievable brand on the market and a lot of notoriety in the tech community because of Jack and because of the technology that Square created around the whole payments.
Having said that, you’ve just joined and you’re going to see the nuts and bolts under the covers, that this company is run on a bunch of Google Docs, and you’re gonna be appalled at what you see when you get here. When you see that, your job is not to look at it and be appalled. Your job is then to just go fix it. Because we’re still at this intense level of growth and company building where it’s not one person’s job to go build the company; it’s everybody’s job. You know it’s a moving organism. Every level of the company needs to get 10% better; otherwise you’re not evolving as an organization, […].”
— Jackie Reses, former senior executive at Yahoo!, Alibaba, and Square
I find Jackie Reses's words in this podcast episode revealing. They expose the messy reality of teams within companies—a stark contrast to the polished façade often presented to the public.
With over five years of experience working with more than 150 businesses, I've gained deep insights into their inner workings and processes. This hands-on experience, combined with my graduate-level business studies, has shown me how academic theories translate into real-world practice.
At its core, creating and sustaining a business requires balancing exploration (innovation) with exploitation (execution)—a constant interplay between chaos and order. Organizations that master this balance are the ones that survive and thrive.
This principle applies specifically to businesses that have established product-market fit and steady revenue streams. For early-stage startups seeking their first customers, different rules apply. This essay focuses on established businesses rather than ventures still searching for their market.
Once you've secured your customer base and begin viewing your business as a system, you face new challenges: organizing operations, maintaining team engagement, delegating effectively, staying innovative, and managing the pressures of leadership. Drawing from both personal experience and academic research, this essay addresses these practical and psychological challenges.
Why making a business work feels chaotic
A fundamental principle of running a company is counteracting entropy's powerful tendency to create chaos and decline. This involves establishing systems—or heuristics—to increase order and mitigate the potential for chaos in daily operations. These efforts are part of an ongoing process to keep the business thriving and resilient.
Entropy (the natural tendency of things toward chaos and decay) plays a crucial role in shaping every organization's and individual's life. It's a physical truth embedded in our daily existence. Yet, we often hide what we perceive as negative, fearing the loss of our reputation, business, or identity.
One reason for hiding chaos is the fear of reputation loss, particularly for individuals. We often believe that appearing orderly and well-groomed will attract customers to our business. This belief holds some truth—people prefer to do business with those who seem reliable and trustworthy, and orderliness can signal reliability.
In reality, you can't maintain a façade indefinitely. When chaos consistently outweighs order, your business faces a higher risk of failure. Employees are more likely to leave, resulting in high turnover. This, in turn, necessitates constant reinvention, creating additional inefficiencies in the operating system.
Several frameworks can help inject order into a business's inherent chaos. Using these frameworks provides a solid starting point for increasing orderliness and productivity. Examples include EOS (Entrepreneurial Operating System), 24 Assets, and GTD (Getting Things Done). Adopting existing frameworks is advisable initially, especially if you're working independently. As you gain experience, you can tailor these systems to suit your team's specific needs and business workflows.
What is the source of chaos?
When starting a business, you're typically alone for the first few weeks or months. In the past decade, there's been a growing trend—at least according to online self-reporting—of people choosing to remain solo entrepreneurs or "solopreneurs." This approach counters the social pressure to build large, employee-heavy businesses with widespread impact. Paul Jarvis stands out as a pioneer of this philosophy with his book "Company of One."
Even in this paradigm, business activities still tend toward chaos, albeit to a lesser extent due to fewer people being involved. It's still advisable to treat your "company of one" as a real business, making it future-proof and scalable through clear processes and effective data management.
If you've chosen a different path, you might have begun scaling your business after the first few sales, or perhaps you started with one or more cofounders from the beginning. As your business-building journey progressed, you likely noticed chaos increasing steadily.
The chaos increases steadily, though not exponentially. This gradual rise may lead you to ignore it, focusing instead on delivering work and engaging in activities that paradoxically add more chaos to the business. These activities create additional artifacts—such as maintaining the website, managing the sales pipeline, or adding new product features or lines. This approach has some rational advantages at this stage: you prioritize execution and value creation. You make a mess, telling yourself you'll clean up later.
At some point along the journey, perhaps after months or even years, you might suddenly realize that everything you've built lacks a cohesive structure. The business suffers from a profound lack of clarity and direction. Team members seem uncertain about their roles and responsibilities. Critical knowledge often resides solely in the minds of a few individuals, rather than being shared across the entire team—your organizational "tribe."
At this point, you might start researching what to do, wondering if you've suddenly developed dementia or if there's some truth to your experience. As you delve into the situation, you'll likely discover that this is quite normal. You'll find numerous frameworks and business coaches specifically aimed at resolving this predicament.
You shift your focus from solely executing daily business activities to building the business itself. This transition requires freeing up time and delegating tasks to others. However, delegation demands explaining and documenting processes, which is time-consuming and effortful. As a result, you may find yourself caught in a dilemma—torn between the desire to develop the business and the need to maintain its efficient day-to-day operations.
How a business survives
As this HBR article underlines, for a business to survive, it needs to strike a consistent calibrated balance between innovation and improving existing activities (exploitation). Innovation fosters chaos because of its exploratory nature. Exploitation (of existing activities) increases order and maintains the necessary balance.
A business survives when it can consistently attract and retain customers, and deliver consistent satisfactory value to them. Because of the constant change in environmental circumstances and business conditions, surviving is not the default option if you put no effort in improving those two fundamental functions of your business. The improvements must also be well-calibrated to provide value to the people who care about your product/service offerings.
To survive, you need to innovate. To innovate, you need to embrace a certain degree of chaos and failure without getting lost in them.
Your job is not to look at the role of entropy and imperfections present in your/the organization’s life and stare at it like a by-stander would a car accident on the road, maybe also gossiping about the people involved in the chaos, or whose fault it was, or how other people reacted to it, or avoiding to look in fear of getting tangled in the uncomfortable situation and lose social status.
Those are often the default immediate response of human biology, to shield you from experiencing psychologically or physically threatening situations. Instead, the highest rewards in society at large are given to the people who stare at the issues in the eyes and do what’s in their power to improve the situation, whatever that means. Not in a flashy yet unsubstantial way to merely increase social status, but in a sufficiently involved and committed manner to improve the situation.
What is also interesting in the quote by Jackie Reses is this part:
“[…] that this company is run on a bunch of Google Docs, and you’re gonna be appalled at what you see when you get here. When you see that, your job is not to look at it and be appalled. Your job is then to just go fix it.”
That is the truth behind almost all organizations. The larger the organization, the more chaos there may be, because of the amount of people and processes involved. So, as someone perceiving companies based on the façade they display, you may never think that they navigate a ton of chaos and are still figuring things out.
When you join a company, your naive beliefs may get shuttered and you may gain some real-world perspective and wisdom. The truth is that many businesses are messy on the inside and constantly “fighting” such a state wishing to achieve greater control and order.
The most effective organization is one where team members understand the value of systems and proactively work to make things better. Then the whole organization gets incrementally more valuable and pleasant to work at over time.
How a business thrives
Once and if you overcome the valley of despair around building a business, you can focus on making your business consistently good and thriving from a financial, organizational, psychological perspective for everyone involved. At this stage, you want to make your business a great place to be, where many talented individuals want to work. There are three key pillars in the thriving process:
Systems and operational excellence (through a balance of structured and loose processes). You have mastered the understanding of systems in shaping your business activities and see their value. You consistently invest resources (time, money, people) to improve your systems and build new ones where needed.
Mindset shift (chaos is necessary to not fail—entropy). You accept that chaos is not an enemy to fight, but a welcome state of reality. It is necessary for innovation, and you certainly don’t want to stifle that. So, while you focus on refining and adding systems into the business, you don’t overdo it and let go of the wish to control everything. You let go of control to gain control.
That’s why executives often hire coaches—the game is majorly psychological. You may collaborate with a coach to help you integrate the reality of running a business into your persona without breaking yourself.
What to do about the chaos to survive and then thrive consistently
In the end, you have to be able to regularly step back and refine the direction and processes of the business. There is always some part of the system that leaks or can be improved over time - that’s inevitable. It is an ongoing process of refinement and acceptance. You can do it one thing at a time, and you can do it consistently well if you pay attention and care.
The journey of building and sustaining a successful business is an intricate dance between chaos and order. It requires a delicate balance of innovation and execution, a willingness to embrace imperfection, and the courage to continuously refine and improve. The path is rarely linear, often marked by valleys of despair and peaks of realization.
As leaders and team members, your role is not to be appalled by the inherent messiness of business operations, but to actively engage in the ongoing process of improvement. Some degree of chaos is not only inevitable but necessary for growth and innovation. At the same time, we need to implement systems and frameworks that bring structure and clarity to our operations.
Ultimately, the businesses that thrive are those that can navigate this duality with grace. They foster environments where talented individuals can contribute to both maintaining order and driving innovation. By accepting the reality of entropy while consistently working to refine processes, you can build resilient, adaptable, and thriving organizations.
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