CSR is often said to be nothing new, simply a different way of doing business better. One hundred and sixty years after Darwin first published “The Origin of Species” and suggested the theories of natural selection, evolution remains a powerful and contentious idea. This month's update reviews what makes evolution so controversial and whether the way that evolution frames the world has anything to offer business strategists seeking survival of the fittest. The way that businesses evolve through innovation is well documented in conventional business strategy work, with the definitive text written by Hammel and Prahalad “Competing for the Future”1. It’s interesting to note that the business press has recently given some prominence to Prahalad’s assertion that sustainable development is vital for business survival, and specifically that energy efficiency is what will make the difference between winners and losers in business. Maybe evolution and sustainable development are ideas converging.
Firstly, what does evolution’s journey from outrageous idea to mainstream understanding tell us about how ideas, products and services can survive if they’re ahead of their time? Evolution as a theory has been endorsed by generations of researchers and is generally accepted as a majority view, but it continues to provoke debate. Most recently, US religious groups have rebranded ‘creationism’ as ‘intelligent design’ and tried to position their theories and beliefs as legitimate competitors to evolution. But evolution dominates thinking in the biological sciences. It is an idea that has proved resilient, however tested. It’s worth considering the characteristics that make it so durable when designing new products and services.
Finding your niche as an ethical organisation
The ‘niche’ is a key idea in evolution. Organisms adapt to fulfil a unique niche in the web of life. If the environment changes, then the organism must change. Over a few generations, the wings of the peppered moth darkened so that it was less visible on the smoke-blackened chimneys of industrial Britain in the 19th Century. Before the mills started polluting the environment, the peppered moths’ wings were pale, well suited for blending in with limestone walls and buildings.
To translate this into a business perspective, how can competitive advantage be created, through approaches to CSR or even niche product development, if the environment will always dictate what is successful? Successful innovation will come from looking ahead to environmental and social trends and planning to create opportunities in that new environment. Article 13’s research into climate change shows that there are businesses, BP being perhaps the biggest and most dramatic example, developing a high profile campaign in Europe to make consumers aware that they are planning to find advantage in climate change. To spot a future niche, a business has to be a constant trend-watcher, alert to its environment, ready to spot the product-client mix to which it is uniquely adapted.
Adaptation: can you future-proof business?
Evolution provides insights for a company seeking to be a responsible part of a community and planning for the future. If natural selection is always promoting new adaptations, how can managers possibly plan today for what they cannot know tomorrow? Another idea implicit in evolution is even more challenging to our way of thinking about how to do business. How can business leaders today possibly manage the world – or even their business, the resources that they husband, and the workforce they support – since the next generation, for a successful species, will, by definition, be further and better adapted to life on earth. Once again, constant trend-watching, combined with a strategy for managing risk and backing several possible options at the same time, are good ideas for practical business planning.
What does ‘survival of the fittest’ mean for business?
Thinking about how organisations evolve, how adaptation enables ‘survival of the fittest’ has long been an analogy that has helped business strategists. But the definitions of ‘the fittest’ need close examination. Can it really be fitness simply to obliterate all competitors in your path? In fact, one of the tenets of evolution is that successful organisms are part of a complex, interdependent web of life. Businesses are part of a web too – resources flow along the supply chain links of the web, support comes from the communities around business sites and customers, and a wide range of stakeholders. Increasingly, CSR reporting is exploring how to measure success through working in partnerships with NGOs and community groups. Damage in a seemingly remote part of your stakeholder map can affect your business by changing your markets, damaging your reputation, reducing the resources available to you or simply opening up an opportunity for a better-equipped competitor.
One of this month’s briefing papers highlights what Peter Senge has to say about organisational learning and the way in which, in order to survive, businesses need to work in harmony with their environment, and a changing environment at that.
Intergenerational issues
One of the problems with trying to apply evolution to business thinking is that evolution is a concept which relies upon dozens of generations to start to notice a difference. Most companies judge their headline success on stock market positions reported four times a year. So what incentives are there for business to plan ahead on timescales far beyond what market reports expect? The answer comes in slowly and strategically building a portfolio of business success measures which see the organisation in the round, beyond its financial performance alone. A balanced scorecard of measures which tell the story of the business as an organism, in a niche, in a much wider web, will set the scene for planning on a timescale where changes that take place over generations have a chance of making it into the horizon.
It’s difficult, sure, but it’s essential to extend the time horizon for business planning. The idea of intergenerational equity, not limiting the choices and opportunities of future generations by what we do today, is a critical part of sustainable development.
Running the clock forward
Does evolution provide any insights into what might happen to business as we run the clock forward? Scientists run evolution backwards when they use DNA analysis and the fossil record to work out when our ancestors, for example, stood erect and split off from the rest of the primate evolutionary tree. But the clock is running forward as well.
The problem is that evolution doesn’t work well as a predictive tool, without forecasts of what will be happening in the environment that encourages some adaptations and not others. A company keen on survival needs to hone its forecasting skills and take a wide view of the environment in which it operates. Climate change, the growth of population and economic activity in China and India, making poverty history (all issues which you can read more about in the Article 13 archive) need to be understood in order to describe the conditions that will help a business thrive. It’s worth noting that this isn’t a universal view. In the book "Future Evolution”, University of Washington palaeontologist Peter Ward argues that we are making ourselves virtually extinction-proof by bending Earth's flora and fauna to our will. Can businesses do the same? And would it be ethical to manipulate the environment to support business success?
So, whether it be in adapting to a changing environment, surviving as the fittest without annihilating competitors, or in thinking about how you want to influence the context for your business in the future, evolution remains a world changing idea.
References:
1. Hammel and Prahalad, “Competing for the Future”, Harvard Business School Press, 1994
Also in this feature:
© Article 13 – February 2006
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