Why business survival is not about natural selection

INNOVATION TALK:Good news: scientists have found what might be our earliest common ancestor - a half pound rat-like creature with a furry tail and a long toothy snout. In keeping with current theories on the rise of mammals, the animals emerged after the demise of the dinosaurs 66 million years ago.

The critter ate insects and scurried about on all fours, the scientists wrote in the journal Science earlier this month. It may seem to some an unremarkable discovery, just another short-lived footnote in the long history of natural selection. However, the animal carried within it a remarkable innovation, one that would spread rapidly across the planet and come to dominate life on earth. It had found a new way to give birth.

When mammals began to appear on the scene, even as the days of the dinosaur were drawing to a close, they would have employed the then best way to deliver young - egg-laying. It had delivered results for hundreds of millions of years back to the earliest marine creatures and had served the dinosaurs equally well.

All bets were off, however, when the last chapters of dinosaur history were being written. The Earth changed suddenly and dramatically when what is now Mexico got smacked by a massive asteroid. It effectively switched off the planet's lights, blotting out the sun and causing global climate change. The dinosaurs fell, but other species, including the mammals, managed to struggle through, assisted by natural selection. New methods of bearing young were needed and evolution delivered.

Marsupials emerged, animals like the kangaroo that develop their young in a pouch. Natural selection tossed another birthing method into the ring, mammals that carried developing embryos inside the female. The placenta had arrived.

The question was, which method would emerge as the front-runner or would things shift back in favour of the egg-layers?

Great tussle

It was like the tussle between which video format would take over the market, VHS or Betamax, or whether CDs or MiniDiscs would come to dominate. We know who won those commercial battles and we also know which baby-bearing method won the day, at least in terms of uptake.

Placental birth effectively wrested control over the world market, leaving marsupials behind as a tiny market subsector.

Natural selection as a driver for evolution is a useful analogue when looking at innovation and how to survive the pitfalls of business. An organism or a business entity is challenged by a stressor of some kind, an external force that disturbs the status quo. Innovation is the immediate answer, change that helps to enhance the fitness of a species or a company to help it to survive.

Natural selection is a blind process, undirected and random, yet highly effective at assisting life to persist on this planet. It did a good job in finding an alternative to the need to lay eggs if you were a mammal. Eggs tie you down. You have to mind them, hatch them, nurture the newborns and then help them along for a while. Carrying newborns in a pouch works better if you have to stay mobile to survive, however, and this evolutionary innovation must have been a big help for early mammals dodging bigger mammals or avian predators.

Carrying your young about as they grow can also weigh you down, making you easier to catch. So natural selection came up with an alternative, one where young are carried only when small and then nurtured only for a time before they are set loose to fend for themselves.

The placenta emerged as the winning format, with a great deal of variety in how a species makes use of it. Primates could tolerate a long nurturing period, given they were well up the food chain. It is much different for the likes of giraffes, where the young are born then have to start moving very quickly if they want to stay alive.

Evolution drivers

External pressures drive evolution just as they drive a company. Labour costs, shrinking markets, exchange rates and a hundred other things damage trade and force a company to innovate. The changes delivered by that innovation are then tested in the marketplace. If the changes improve commercial fitness, then the company survives. If they do nothing of benefit, or worse, if they cause harm, the company will go the way of the dinosaurs.

Natural selection in evolution is as random as dice. This is not true of business. We assess the stressors and determine what part of the business entity is being damaged. We can apply innovation in a purposeful way that effects change in the parts of the business that are most under threat. But succeed or fall, innovation is the only option if you want to survive.