The "Adaptive Cycle" - also known as "Lazy 8"

The "Lazy Eight" cycle model describes the cycle of renewal that systems must repeatedly go through in order to survive and evolve.

The "Lazy Eight" model is named for its shape, which resembles a figure eight lying on its side, and it describes four recurring phases: collapse, destruction, reorganization, and renewal . These phases can be applied to organizations, and the model shows how organizations can respond to them. It was introduced by Gunderson and Holling in 2002 and further developed by Katzmair and Gulas in 2018.

The described "Lazy Eight" or adaptive cycle model emphasizes the importance of organizations responding to the recurring phases of the life cycle not with robustness and stability, but with adaptive measures. These adaptive measures strengthen the organization and enable it to repeatedly navigate the phases of the cycle at a higher level.

In the "Lazy Eight" cycle model, crisis plays a crucial role. A crisis, be it a pandemic, supply chain disruptions, or the acute effects of the climate crisis, marks a pivotal moment. Although a crisis brings destruction, it simultaneously provides the initial impetus for something new. This new beginning leads to a process of renewal and further development.

For companies, the "Lazy Eight" serves as an important orientation and positioning tool. It enables companies to document their development and anticipate the various development phases, along with their associated challenges, principles, and opportunities. By applying this model, companies can respond better to crises and secure their long-term viability and competitiveness.

For the strategy process, this means that it should not be viewed as a static model, but rather as a process that must be conceived and developed in cycles. Organizations can use the model to assess where they currently stand in the cycle and which phase will come next. Understanding their own position in the cycle enables organizations to be adaptive and proactive. An organization's strategic future viability thus depends on its situational assessment.

The four phases in detail

The "Lazy Eight" model structures the life cycles of complex systems into four main phases: innovation, growth, stagnation, and renewal. Each of these phases is accompanied by two sub-phases, resulting in a total of eight sub-phases.

Laizy eight

Image source: https://hackernoon.com/the-adaptive-cycle-panarchy-as-dynamic-maps-for-resilience-thinking-793fad49de5e

1. Innovation phase :

• Discovery : In this phase, new ideas are explored and prototypes are developed. The organization adapts quickly and tests creative solutions.

• Restart : After the discovery, the organization decides on a clear path and actively pursues it. The direction is clearly defined.

2. Growth phase :

• Letting go and scaling : The old is let go, and the organization begins to implement and scale the results of the innovation phase.

• Establishment of processes and structures : Processes, structures and roles are consolidated, and the organization stabilizes.

3. Stagnation phase :

• Preservation and efficiency : The organization tries to maintain the status quo and work efficiently. There is a certain degree of inflexibility and standardization.

• Crisis : A crisis occurs that forces the system to draw on reserves and react with slogans of perseverance, crisis plans, and interventions.

4. Renewal phase :

• Confusion and improvisation : The organization is in a state of confusion, where old hierarchies and patterns are overridden. Improvisation takes place, and new systems of authority emerge.

• Bifurcation and decision : This is the critical point at which it is decided whether the organization transitions to renewal (new game) or sticks to the old (old game).

The Lazy Eight ensures that companies understand the life cycle phases they are in and can respond accordingly. By using the Lazy Eight as a guide, organizations can strengthen their adaptability and successfully navigate the challenges of the different life cycle phases.

Crises as turning points

The adaptive change model emphasizes the importance of crises as turning points that force companies to choose between maintaining the old status quo or embracing innovation and a fresh start. This choice is crucial for a company's future viability and resilience.

Image source: https://www.researchgate.net/figure/The-adaptive-cycle-Source-Adapted-from-Holling-1986_fig1_258236782

In an era marked by multiple crises, bifurcations and crisis-like disruptions lead to the decoupling of systems and the deconstruction of established structures. The effects of a crisis fundamentally alter existing relationships and result in a reverse cycle of renewal. Even after a crisis has been overcome, the causal relationships will no longer function as before.

Businesses and self-employed individuals have two options after a crisis: They can either cling to the old status quo and try to return to the previous state, or they can opt for innovation and a fresh start. The choice depends on the individual situation and the nature of the crisis.

When companies try to cling to the old status quo by restoring or even surpassing the pre-crisis state, they often find themselves in a cutthroat competition that smaller businesses, in particular, can hardly win. Large corporations dominate this old game for the time being, and many smaller companies fail under the new conditions.

Nevertheless, crises also offer opportunities for innovation and reinvention. During the COVID-19 pandemic, many industries found new ways to adapt and renew themselves. The shift of events to digital platforms, the introduction of new delivery services, and the development of innovative business models are examples of how companies have responded to the pandemic's impact.

A similar trend can be seen during the war in Ukraine: companies are using supply chain and raw material shortages as an opportunity to seek new, more regional raw material alternatives, thus setting an example for sustainability.

Overall, these points emphasize the importance of adaptability and a willingness to innovate in times of crisis. Companies and individuals who rise to this challenge and are prepared to explore new paths can emerge stronger from crises and look successfully to the future.