The Problem of Corporate Extinction
The extinction of large organizations is surprisingly common. In the book called The Living Company, author Arie de Geus discovered that the average multi-national Fortune 500 company only survives for 40-50 years. In comparison, the average species lifespan of mammals is 1 million years and 11 million years for many insects.
Given the enormous difference between corporate and species survival, several questions come to mind. Could it be that the common management pyramid is to blame for the extinction of companies? What strategies can organizations learn from organisms? Finally, what form of management is best suited for adaptation?
The following are brief descriptions and examples of four characteristics of adaptive organisms.
Distributed Decision Making (DDM)
Ants are born autonomous. Each individual ant in the colony has the ability to make decisions in response to changes in their local environment. Through frequent interactions, ants share information about environmental changes and inform others about their individual reaction to the stimulus. These local decisions and subsequent interactions can lead to intelligent global behavior of the ant colony.
The ability of individuals to make and share decisions can lead to emergent, collective, intelligent behavior changes and is known as Swarm Intelligence (SI). Given the mobility of many workforces and distances between individuals, SI from ant colonies seems a natural model to mimic in business.
Ricardo Semler built his family company, Semco around these ideas. Semler believes in the DDM model so much so, that he permits his employees set their own terms of employment: their hours, wages and technology. In return, his loyal employees (less than 1% turnover) have made Semco one of the most predictably profitable organizations in Brazil over the last 30 years.
Flocks of up to a million starlings have been recorded wheeling, swooping and pitching in high-speed unison. Flocking behavior is a byproduct of DDM and explains how schools of fish or flocks of birds are able to quickly change direction without harm to one another.
In the face of predators or discovery of a food source, any bird can initiate a flock movement by deciding to change its own direction. Each bird allows itself a cushion of space to allow for quick reactions. Other birds change their own direction of movement relative to those around them. This cohesion spreads through the flock much like the wave at a sports event. As it is with the wave, those furthest from the point of original movement can see the movement approach, anticipate the required adjustments and react quicker when it’s their turn.
The agility of large organizations is more often compared to the titanic than a flock of birds. The Titanic sank not because there was an iceberg in its path but because the lumbering ship couldn’t turn quickly enough to avoid it. Similarly, the blame of an organization’s slothful movement is often attributed the size of the employee workforce.
As it turns out, the world’s largest employer is also one of the most agile. The US Department of Defense (DoD) had to become innovators in adaptive and agile management. The battlefield is a chaotic and dynamic environment, and knowingly running into icebergs is not an option. In spite of enormous size, many DoD battlefield tactics are closer related to flocking behavior than the Titanic’s movement.
To be become nimble, military planners at the DoD use Commander Intent. Commanders set the stage of what success looks like and empower subordinates to improvise and adapt to the changing battlefield conditions in real time. As with flocks of birds the key to success for this management model are practice, responsive, multidirectional and real-time communication.
The process of discovering sparsely distributed food sources has been studied in many species and is commonly referred to as Levy flight. Numerous studies have found that foraging bumblebees do not necessarily take a straight line to their next food source. Rather they fly in a random direction, often over a long distance, until it finds a new source of pollen. When the bee makes a discovery, it explores a small area intensely then it returns to the hive to recruit others to join exploring the new source.
Food sources are the biological equivalent to revenue streams in an organization. A common rule of thumb in business is the 80:20 rule whereby 80% of sales are generated by 20% of clients or product lines. Another, less elegant, rule of thumb is that all businesses face attrition. Given that there are so few sources of revenue and that those sources of revenue will inevitably churn, exploration is a critical component to the development of new revenue streams and the survival of an organization.
Gore-Tex makes an excellent example of workplace exploration. Associates at Gore-Tex are required to spend 10% of their time experimenting and exploring on unique projects and ideas through “Dabble Time”. When any associate believes they have come up with a breakthrough idea, the Gore-Tex culture dictates that they compete for the attention other’s dabble time and attempt to recruit others to join the new project initiative. Through this process, Gore-Tex has created over 1000 new products and has maintained consistent profitability.
Learning through Play
Lion cubs learn how to stalk, chase, pounce and take down prey during play. Cubs wrestle and mimic both each other and adults to learn successful hunting skills, strategies and social bonds. As a carnivore, a lion has many skills to learn and they start through play early in life.
Karl Groos, author of The Play of Man, is credited with an explanation that the more complex the adult behavior, the more playful their children. This may explain why carnivores like lions are more playful than herbivores like antelope. Groos also explained that the type of play each species participates in is determined by the skill sets they need to develop. A lions learn to hunt and the antelope learns to evade.
In organizations, learning through play appears to be an upward trend that institutions are taking note of. Stanford’s d.School specializes in innovation through design thinking and their napkin manifesto clearly reinforces this. The d.School program looks more like a studio of creativity than a prison of traditional learning.
Bio-mimicry has long been a common practice. Architects of the pyramids, mathematicians like Fibonacci and artists like Michelangelo all observed and mimicked nature (Phi) as inspiration for their timeless masterpieces. Similarly, the examples above suggest that organizations can study natural behavior and adaptive strategies to improve their chance of survival. In the face of intense competition and the rise of the connected consumer the future of management may look more like an adhocracy than a culture of control.
In my research I’ve found one company that seems to exhibit all of these adaptive behaviors. Team Wikispeed founder, Joe Justice had an audacious goal to build a 100mpg, road worthy car. In 3 months and for less than $30,000, Joe’s worldwide group of volunteers succeeded. You can watch this amazing story here.
Do you have other examples of adaptive companies? Are there any other biological adaptive behaviors that are being copied in business?