Darwin-ners and Dar-losers: How to Adapt, Anticipate, and Avoid Extinction
This week marks the 200th anniversary of the birth of Charles Darwin, and I just attended the 2009 TED conference (Technology, Entertainment, and Design www.ted.com) where there was a lot of discussion about evolution and other biological and scientific themes juxtaposed with presentations on the economy and the future of business.
Which brings to mind an important theme about the differences between business ideas that make it versus business ideas that go extinct.
At the TED conference, Nina Jablonski, author of Skin: A Natural History, presented evidence that skin offers valuable clues to adaptation. For example, when people with high levels of melanin, designed to protect from the sun, suddenly relocated to places with radically different climates, melanin, the very thing that allowed people to thrive in the tropics set the stage for vitamin D deficiencies and other ailments because tropical skin was not well-adapted for colder, less sunny climates.
How do the forces of adaptation and evolution apply to the world of business? Which attributes separate the winners from the losers as shifts in business climate occur? And, is there a trait that keeps business ideas and even companies ahead in the evolutionary cycle?
It’s easy to point to signs of extinction in business, where the equivalent of the horse and buggy yields to the equivalent of automobiles. Many a business concept hit the cutting room floor because it did not keep up with changing times.
But, we can learn even more valuable lessons from companies that adapted nimbly to changing times.
In December 2008, Ravi Mehrotra, chief scientist and co-founder of IDeaS, a revenue optimization software company with a focus on the hotel industry, explained how they avoided extinction when the hotel industry shifted dramatically post-9/11. “With the firm on the verge of extinction IDeaS decided to sell its software over the Internet. That model, now called software-as-service, enabled IDeaS to quickly and cheaply distribute its technology to big and small hotels alike.” (www.startribune.com)
According to the Minneapolis Star Tribune, IDeaS’ approach not only helped IDeaS avoid extinction, but led to their acquisition by SAS Institute, Inc. Today, IDeaS software calculates most hotel prices in the United States and is expanding into car parks in London, bus service in Mexico and sports arenas in the United States.
By contrast, a recent report describes the threat of disappearance of the garment industry in New York’s Garment District, whose manufacturers produce roughly one-third of all clothing sold within the United States. According to statistics from the NYCEDC, the fashion industry in Big Apple employs about 169,000 people, but rising rents and reduced demand put that industry at risk of disappearance. Nanette Lepore, a fashion designer whose entire collection was designed and sewn in the Garment District, brought the economic issues for the industry to light when she was quoted in a recent article in a college newspaper (www.loyolagreyhound.com): “Here in the fashion capital of our country, the factories, trim and fabric shops, design studios and showroom are on the verge of extinction.”
The differences between a company or an industry that faces a chilling turn in the business climate and is nimble enough to survive versus those where the forces are too overwhelming ultimately separate those that adapt and thrive from those that disappear.
Businesses are luckier than the biological species described by Dr. Jablonski. It can take an entire generation or longer for animals to change their skin. But, business leaders can see a shift in climate and react much more quickly. For business, the ability to see the signs quickly and change course becomes the most important attribute in the survival of the fittest.
May 2nd, 2009 at 9:45 am
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