''Each of the stages in the Panarchy Loop is a distinct phase with unique dynamics.
Reorganization is an exploration phase which is characterized by trial and error
and can appear chaotic and random. Only when ideas crystallize can a more orderly,predictable exploitation phase begin. Exploitation – or an entrepreneurial phase –
takes invention and turns it into action. As more is learned about the invention, efficiencies
are discovered and the model moves into a mode of maturity, or conservation.
In realizing the efficiencies, different kinds of capital – such as resources, knowledge,
or processes – are committed. Because these efficiencies are bound to a specific
context, such as a moment in time, or a particular environment, their appropriateness
will eventually shift as things change. There is a need to release some capital so that it
can be re-assembled in a way that is more appropriate to the new context. This release
is often difficult for those involved as it means that trusted and familiar practices
must be abandoned. At the same time, it provides fertile ground for innovation.''