Evolution and Change in Business

Looking at our businesses within the context of evolution can give us actionable insights to help move our businesses forward. 

Despite what we may have read or heard; evolution is not about a dog-eat-dog world where only the strongest individuals survive.  A quick tutorial on some key concepts in evolution:

  • Survival of the Fittest: Please note that it is not ‘survival of the strongest or toughest’.  Instead, it means survival of those who are most able to prosper in the current environment.  Importantly, if the environment changes the criteria for being the fittest changes. 
  • Group Evolution: Although evolution plays itself out through each individual who either survives or does not survive until he or she can reproduce, evolution is not just an individual attribute.  Evolution is also a group attribute.  Indeed, much of the success of homo sapiens and our other ancestors came from working together as a group, clan or faction to enable the individuals within the group, clan or faction to survive. 

Human evolution is not just the story of individuals competing with other individuals within each group; it’s also the story of groups competing with other groups.  Greg Lukianoff

  • Punctuated Equilibrium: As pioneered by Steven Jay Gould and Niles Eldredge, evolution does not take place at a consistent pace.  There are long periods of dull stability punctuated by periods of swift change usually determined by significant changes in the external environment.
  • Evolution is Inevitable: Over the medium to long term evolution will triumph.  Those who do not adapt will over time diminish and become less relevant.  As Leslie Orgel writes, “evolution is cleverer than you are.”

With that quick tutorial finished, let’s discuss how thinking in terms of evolution can help us improve our business.

  • The external environment is and will always be changing.  Thus, we, as individuals, need to always be learning, adapting, and changing our behavior to fit the changing world.  Similarly, companies need to be changing.  The beginning of the end for many companies is when the world outside the company is changing more rapidly than the world inside the company.  Such companies are often perfectly fit for a world that no longer exists.
  • But, as with the idea of punctuated equilibrium, we need to be mindful of when we should evolve slowly and when we should change dramatically.  Constant dramatic change will leave our companies in turmoil and may make our companies perfectly fit for a world that does not yet exist.
  • Evolution occurs from the bottom; it starts with the individual or the individual group.  For our companies, evolution needs to begin on the front lines with our customer facing employees (sales, services, operations) who will be the first to know that the world is changing.

“For too long we have underestimated the power of spontaneous, organic and constructive change driven from below, in our obsession with designing change from above. Embrace the general theory of evolution.  Admit that everything evolves.”  Matt Ridley

  • Our companies are groups.  For us to remain fit, our whole company needs to remain fit.  In short, a collection of individuals no matter how good and fit for today’s environment will always lose out to a team that comes together to learn and make the company good and fit for today’s environment.  A team of superstars will nearly always lose to a superstar team.
  • Change and improvement is not enough.  We need to adapt and improve more rapidly than others.  If not, we will fall behind and eventually become extinct.
  • The individuals and companies that have been and remain successful are not necessarily smarter, stronger, or ‘better.’  They just have done a better job of continuously fitting themselves to the environment in which they exist.  

In short, harnessing the power of evolution will help move our companies forward.

About David Shedd

David has been a President - CEO - COO of an up to $350M group of manufacturing, distribution, specialty retail and services companies, having led 22 different businesses from turnarounds to start-ups to fast growth companies.
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