Homeostasis: The Result of Successful Management



I found the following article on Wikipedia and immediately realized the correlation between homeostasis in the scientific world and sustainable success in the business world. I found it very interesting to "edit" the piece by (inserting applicable terms) which serve as viable substitutions to the words preceding them.

For another coherent piece, one might also substitute familial terms along with principles of: love, discipline, respect and education respectively as these scientific concepts are universally sound across every family, school and business that is, at it's core, a small branch of the greater natural world in which we live.


 "In simple terms, it is a process in which the body's internal environment is kept stable, despite changes in external conditions. The concept was described by Claude Bernarrd as Multiple dynamic equilibrium adjustment and regulation mechanisms make homeostasis possible."

With regard to any given life system (business) an organism (employee) may be a conformer or a regulator.

Regulators (managers) try to maintain parameters at a constant level over possibly wide ambient environmental variations.

Conformers (smart hires) allow the environment to determine their parameters (buy in).

For instance endothermic animals, namely mammals and birds(successful managers) maintain a constant body temperature (standard), while ectothermic animals, namely almost all other organisms (non-managent)unless acted upon may exhibit wide body temperature (behavioral) variation.

Behavioral adaptations (engaged managers) allow ectothermic animals (non-managent) to exert some control over a given parameter.

For instance, reptiles (unsatisfied employees) often rest on sun-heated rocks (strong leaders) in the morning to raise their body temperature (morale, performance or perception).

Regulators (Management) are also responsive to external circumstances (customers, market fluxtuation, demand, competition, etc..), however: if the same sun-baked boulder (motivational leader) happens to host a ground squirrel (colleague / employee requiring less motivation) , the animal's metabolism (colleague's moral, performance, perception, etc...) will adjust to the lesser need for internal heat production (motivation) .[citation needed]

An advantage of homeostatic regulation (effective management) is that it allows an organism (business) to function effectively in a broad range of environmental conditions. For example,ectotherms( non-management employees) tend to become sluggish at low temperatures (when business is slow), whereas a co-located endotherm (manager) may be fully active. That thermal stability comes at a price (higher salary and benefits) since an automatic regulation system (keeping your head when all others about you are losing theirs...) requires additional energy.

All homeostatic control mechanisms (Successful Systems of Operation) have at least three interdependent components for the variable being regulated: The receptor is the sensing component that monitors and responds to changes in the environment (executives / general managers). When the receptor senses a stimulus (performance), it sends information to a "control center", the component that sets the range at which a variable is maintained (board of directors / ownership) The control center (board) determines an appropriate response to the stimulus (performance). In most homeostatic mechanisms, the control center is the brain. The control center then sends signals to effectors (mid-level management), which can be muscles, organs or other structures that receive signals from the receptors (general manager) or control center (directors). After receiving the signal, a change occurs to correct the deviation by either enhancing it with positive feedback or depressing it with negative feedback.[10]

Positive Feedback:

Mechanisms (praise) designed to accelerate or enhance the output created by a stimulus (successful performance) that has already been activated (achieved).

Unlike negative feedback mechanisms that initiate to maintain or regulate (critique / correct) physiological functions within a set and narrow range (underperformance), the positive feedback mechanisms are designed to push levels out of normal ranges (motivate by positive reinforcement).

To achieve this effect, a series of events initiates a cascading process (appreciation and engagement) that builds to increase the effect of the stimulus (performance). This process can be beneficial but is rarely used by the body due to risks of the acceleration's (unwarranted praise/ reward or unnecessary expenses) benefit being diluted.

One positive feedback example event in the body is blood platelet accumulation, which, in turn, causesblood clotting in response to a break or tear in the lining of blood vessels. Another example is the release of oxytocin to intensify the contractions that take place during childbirth.[10]

Negative feedback:

Negative feedback mechanisms consist of reducing the output activity (limiting privileges or offering constructive criticism) of any organ (employee with opportunity to improve) or system (many) back to its normal range of functioning (procedure).

A good example of this is regulating blood pressure. Blood vessels can sense resistance of blood flow against the walls when blood pressure increases. The blood vessels act as the receptors and they relay this message to the brain. The brain then sends a message to the heart and blood vessels, both of which are the effectors. The heart rate would decrease as the blood vessels increase in diameter (known as vasodilation). This change would cause the blood pressure to fall back to its normal range. The opposite would happen when blood pressure decreases, and would cause vasoconstriction.

Another important example is seen when the body is deprived of food. The body would then reset the metabolic set point to a lower than normal value. This would allow the body to continue to function, at a slower rate, even though the body is starving. Therefore, people who deprive themselves of food while trying to lose weight would find it easy to shed weight initially and much harder to lose more after. This is due to the body readjusting itself to a lower metabolic set point to allow the body to survive with its low supply of energy. Exercise can change this effect by increasing the metabolic demand.

Both feedbacks are equally important for the healthy functioning of one's body...

Homeostatic imbalance:

Many diseases (business failures) a result of disturbance of homeostasis, a condition known as homeostatic imbalance (mismanagement). As it ages, every organism (business) will lose efficiency in its control systems(process management). The inefficiencies gradually result in an unstable internal environment (dymamics) that increases the risk for illness (losses). In addition, homeostatic imbalance(mismanagement) is also responsible for the physical changes associated with aging (obsolescence). Even more serious than illness (losses) and other characteristics of aging(inefficiency) is death(bankruptcy). Heart failure has been seen where nominal negative feedback mechanisms become overwhelmed, and destructive positive feedback mechanisms then take over.[10]Diseases(failures) that result from a homeostatic imbalance (mismanagement) include diabetes(inability to balance books), dehydration(lack of working capital), hypoglycemia(inability to drive sales), hyperglycemia (lack of infrastructure to handle volume), gout (disruptive employees), and any disease caused by a toxin present in the bloodstream (loss, theft, embezzlement).

All of these conditions result from the presence of an increased amount of a particular substance (problem). In ideal circumstances, homeostatic control mechanisms (successful management) should prevent this imbalance from occurring, but, in some people (organizations), the mechanisms (standard operating procedure, standard of care or systems of operation) do not work efficiently enough or the quantity of the substance (seriousness or lifespan of the problem) exceeds the levels at which it can be managed.

In these cases, medical intervention (outside consulting services) is necessary to restore the balance, or permanent damage to the organs (culture, mission, people power, etc...) may result.

According to the following citation, every illness has aspects to it that are a result of lost homeostasis (managent controls): "Just as we live in a constantly changing world, so do the cells and tissues (businesses) survive in a constantly changing microenvironment (marketplace). The 'normal' or 'physiologic' (profitable or sustainable) state then is achieved by adaptive responses to the ebb and flow of various stimuli (activity and performance) permitting the cells and tissues to adapt and to live in harmony within their microenvironment... Thus, homeostasis is preserved. What is good for individual cell is good for the entire system.


Author George Leonard discusses in his book "Mastery" how homeostasis affects our behavior and who we are. He states that homeostasis will prevent our body from making drastic changes and maintain stability in our lives even if it is detrimental to us.[12]Examples include when an obese person starts exercising, homeostasis in the body resists the activity to maintain stability.[13] Another example Leonard uses is an unstable family where the father has been a raging alcoholic and suddenly stops and the son starts up a drug habit to maintain stability in the family.

A note to other advisors, consultants, parents or anyone looking to champion a turn-around, Leonard also said: "Homeostasis is the main factor that stops people changing their habits because our bodies view change as dangerous unless it is very slow." Expect resistance and unnecessary delays if the need for change isn't first communicated and desired system-wide. Expect success if it is and you have the time and resources to walk them as opposed to pushing them through it.

Bread & Butter: Spotting Talent to Fuel CBDs

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While having brunch with my family at a downtown delicatessen the other day, I had the surprising good fortune to enjoy a slice of the best raisin bread I've ever had. So good in fact that I asked the server if they could give me the contact information for the bakery that supplied it...only to discover that it wasn't made by a bakery at all but by a local guy out of his mother's garage-turned-commissary. 

After several phone calls and a long lunch, I realized that this baker represented more than just an advisory engagement opportunity for me.  After determining his options for a sustainable business platform I quickly realized that this young man (and his uncanny ability to produce some of the best breads I've ever eaten) represented something more profound: The endangered demand for quality products in lieu of convenience. 

David Napolitano is making incredible bread and supplying a small local specialty grocer along with two or three eateries in town but the demand for his product is sure to outpace his ability to produce it. In order for David to continue making bread at a profit, he is forced to either a.) Charge a price beyond what the market will bear. b.) Outsource the production to a larger scale manufacturing facility---in which case product quality will suffer or c.) Collaborate with a complementary concept (such as a cafe, restaurant or bulk olive oil retailer) with both a scaleable platform (ie; starting as an artisan "open kitchen" bread studio) and significant financial resources in place to incorporate an additional revenue center into their operation for payroll to support a wider supply and delivery radius or ancillary supply channels like boutique / luxury hotels, etc...

Its sad to imagine my daughter growing up in the absence of  "downtown neighborhoods" with retailers like this. But almost gone are the days where local artisans and craftsman line the streets with their shops ie; specialty bakeries, cobblers or coffee roasters indigenous to every town. Granted....more and more Dean & Deluccas and Food Halls style gourmet eatery markets are popping up in most major US cities but outside those densely packed urban areas, suburbanites are driving to lifestlye-centers and super-grocery chains instead of the local town butcher, baker, candlestick maker or farmers' market.

Central Business Districts (CBDs) are the lifeblood and identifying character of any community but without operational systems for replication and mass production in place....master bakers (or coffee roasters, etc...) are saddled with the reality that although they will always be able to pay the rent, surround themselves with like-minded individuals and perhaps have a nice life living above their shop toiling away for 80hrs a week...they'll never realize the fortunes reserved for one stop shop food warehouses and most chain restaurants. Many will argue that franchises are the answer. Most of whom (save for a few with incredible brand equity and operational support in place) most often charge franchisees without sufficient experience (but plenty of passion) $30k for the right to use their name, "formula" and recipes but generally fail to deliver on the all important and imperative component ...the "secret sauce" or "genuine experience" which is only really provided by those who walk and breath their product or the aforementioned artisan.  Its that "wow factor" that is delivered by committed people who love what they are doing and are working in concert with an experienced team.

In exchange for maintaining the integrity of their small-batch products many artisans like Napolitano are often exiled into obscurity... Unless they write a book or land on a food network show or... garner regular support from their neighbors. They are often underpaid and undervalued by the masses who pay their cable companies more than they pay their teachers...and choose their bread based on value and calories or even more ironic....the amount of carbohydrates per slice. 

Meeting David was like meeting Picasso. You could no less mass produce his product than you could mass produce him. Making bread is more than a culinary art. You're not just working with inert ingredients and measuring spoons. Yeast is a living thing and working with dough requires, touch, taste, smell, sound...its a living breathing thing affected by everything from sea level to humidity.  When I considered the great chefs I've worked with, I realized that although they were incredible artists and efficient kitchen managers...they were also able to cross-train and coach. Mentor and develop.  And that's what David needs...a venue in which to build systems, infrastructure and staffing levels that support a cross-training and development programs. He needs help creating a platform to turn people into bakers making bread his way so that he can share it with (or from) more downtown shops and not be forced to grow old above any one of them.

Its not enough to be great at what you do. The real value is in collaborating with and developing people within structured and managed systems. Perhaps that truth will transcend restaurants & hospitality and will, someday, prove relevant to my daughter in some other way. Until then, I'm stuck with my own frame of reference...and my own delicious raisin bread.


Growth Market: The Midwest is The Future

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When Catherine was just over a year old, she turned a Dr. Seus book over and placed the frame of a United States foam puzzle over it and exclaimed: "Look Daddy! I made a city!"

I'm not saying that the evolution of America's middle-market is going to be that fast or that simple but the growth in South Dakota- and the Midwest in general, has been both exponential and inevitable.

When you have both coasts of the country growing on top of themselves, it’s only a matter of time before generations that are increasingly more mobile (as they were four and five generations ago in the old country) affect the fluid dynamics of economic overflow into the middle of the country. After all, you can't have sprawl into the ocean.

Another driving force behind this growth is what I like to call “The Delaware Factor” -which is the creation of a tax friendly environment for corporations and dynastic trusts. Corporations and families being able to thrive in soil like this results in more Fortune 500 companies relocating their corporate headquarters… which serves as a catalyst to attract other businesses... that holistically contribute: more jobs, more rooftops, more retail and finally more advanced medical and educational development (Take note Obama).

In the last three years, the population of Sioux Falls alone has gone from 75,000 people to almost 180,000. From 2010 to 2011, the departures and arrivals from the airport (which you pull into like a lifestyle center) doubled which prompted the construction of two additional terminals and an initiative to establish Sioux Falls as an international hub.  In the first quarter of 2012, the number of flights has already doubled the total amount of flights in 2011.

Two major hotel flags have recently been planted in the area in addition to to the already significant number of beds. One by Hilton and the other by Hamilton Suites. The construction of the Midwest’s largest sports and entertainment arena, scheduled to be completed in 2013, will bring with it zoning for an entirely new "Entertainment District" and one of the country's largest state-of-the-art Convention Center. The fact that the mayor’s office recently announced that they would be submitting an RFP for another large hotel across from the new Convention Center (contiguous to a championship golf course) has a lot of developers, as far as New York, peeking over their Chemex to get a better look at what’s going on here. But after speaking with quite a few of the old guard in this small city, one is left with the feeling that an RFP is more of an exercise in protocol than of a genuine offering. The deals seem to be locked up before they’re even made public and with a surge of Ag[riculture] money in the market from farmers who profited greatly over the last few years with the corn belts spreading. Farmers and local developers are buying up land and investing in commercial development almost as fast as those profiting from the oil boom in North Dakota. According to Gov. Ed Schafer and Paul Hegg of Hegg Companies, development of the Bakken oil patch is a 25 year play, and it’s not too late for businesses to participate in the economic boom here. This is looking more and more like a better short-term opportunity for developers and operators from the coasts than for the newly relocating fund managers, institutional investors or capital intermediaries. But there does seem to be a long-term play here. I left the East Coast with the luxury of never needing to waiver from my sense of integrity and commitment to fair-play. Those principles may not have brought me as much action as I would have liked, but definitely enabled me to grow with like-minded colleagues, learn from benevolent leaders, and forge a few lasting friendships built on trust and respect. Perhaps not the most popular of business practices employed by ambitious young professionals in America’s biggest cities… but certainly seems to be the way of life in a city of less than 200,000.

Sioux Falls feels like an instant culture-fit for my family and me.  If, over time, I’m fortunate enough to earn the trust and respect of my new neighbors, I am confident that the numerous opportunities here will bear fruit.

The mayor’s just announced that a total of $200MM has been spent in the last year on new road construction and repairs of existing roads. Although I am still trying to adapt to things such as driving 35mph on long stretches of road with four to five lanes that could benefit from a few extra signalized intersections; there is a tremendous amount of investment in infrastructure to support and sustain development of the 43rd fastest growing state in the country.

Is Sioux Falls the best kept secret in America? I'll have to pay close attention to my 3yr old daughter's musings and get back to you.