### What type of organization are we talking about? Let's break down the setup: a rapidly growing or mature company, profitable, able to reinvest cash flows or pool resources for investment in something new. Usually not a startup, because a startup is itself the new, disruptive initiative. Also not an early-growth company, because at that stage the best place to reinvest resources is the core business. So becoming absorptive matters for an organization at the late-growth and maturity stages. Here, the inflow and use of external, non-core opportunities can offer higher-ROI options: the potential to boost the core, or build a new core founded on the same strategic capabilities. ![[product_lifecycle_absorptiveness.png]] Related source: [CFI](https://corporatefinanceinstitute.com/resources/valuation/business-life-cycle/) The decline phase also relates, but for a different reason. As the ROI of the original core falls, being absorptive shifts to solving a capital-preservation task: divestment, cutting losses, pivoting into a new business. The organization's core becomes less a magnet for new opportunities and more a set of building blocks fragmenting into a new cycle, one that, in some cases, gets completed inside a different organization. Being absorptive means the organization builds and uses flow, becoming more receptive to external opportunities. It lets the initial investment in the core: - achieve a higher maturity potential, - stay mature and profitable longer, - seed new cores that monetise the same strategic capabilities, - extract more value from the decline phase. > Being absorptive is a value multiplier across the business or product lifecycle. > It is relevant once the ROI of the core business normalises. ### How to become more absorptive? Every organization is somewhat absorptive: even in the most core-defensive, hostile company, some new resources and ideas squeeze in. To become more absorptive, an organization should start systematically considering and processing opportunities outside its core business. To do this, the organization needs to run projects and processes that build the flow, and regulate internal friction to make that execution possible. **Important:** it's not a maximisation play, it's an optimisation of [[Absorptive Organization|absorptive organization]] maturity elements. Simply maximising flow and minimising friction can waste investment resources and shutter the core business. To affect the flow of opportunities, there need to be engines, mechanics that get opportunities discovered, then push them through the selection stages. This general process should help select only the highest-ROI opportunities. Surrounding these stages is an organizational design: its culture, processes, dos and don'ts, people, everything built for the existing core. That is the source of friction. An organization is not a startup: it carries organizational legacy, practices, debts. Anything new faces a set of rules built for a different purpose, a different efficiency, a different protection. > To become more absorptive, the organization needs to build a buffer and an integration bus for non-core opportunities: absorption mechanics and design solutions. ### What is the playbook about? The playbook is a set of descriptions of mechanics and design solutions. It builds on Theory's Foundations and Frameworks to give a toolkit for exactly how to tweak organizational absorptiveness. **Mechanics**: move an opportunity from outside the organization to inside it. **Design**: structural choices that determine how much friction an opportunity meets. ### How to use it? Depending on the reader's goal and position inside the process: - to pull opportunities inside, - to make an opportunity that's already inside actually work, solving an absorption-related problem, - to get your startup or resource inside an organization. The flow is: 1. Find the appropriate framework for your challenge. 2. Select the appropriate mechanics or design solutions to optimise it. 3. Try to execute it.