Richard Koch applies the laws of science to business in this excellent book. Heavy but very useful reading!
The most interesting aspect is the application of Darwin's evolution to the business context:
1) Out of the zillion number of species in the world, only those which can battle out with other species survive, gain momentum and multiply.
In the business context it can be said that out of thousands of companies/products, only those which can survive competition will evolve
2) Generalisation of species is followed by differentiation and again generalisation as differentiated species fight each other and the final winner survives
Business also works in the same way
3) Conditions of life determine which species survive similar to environment in business context
4) Natural selection contains lots a luck and randomness, so does the business
Fisher's fundamental theorem of evolution states " The average fitness of the population grows from generation to generation". If fisher has said this way back, what did Bruce Henderson from BCG invent?Experience curve!!
Ulam, a famous mathematician felt that mathematical theories don't really win based on objective merits, but as a result of blind competition. So, does Koch feel about Business!!
Gregor Mendel's law of segregation states that inherited traits are passed on direrctly by each parent without blending. He also explains about 'dominant' and 'recessive' traits.Finally he also says it is all pure luck as to what gets passed..... After some years, DNA(deoxyribonucleic acid) was found and described as a carries of factors or traits.So was the word 'genes' born. Is it only based on the genes getting passed on that the generations evolve?
Some one said it is a also because of memes
What are memes?
Memes are human inventions.Basic cultural transimission happens because of memes.
Having talked about genes and memes, let us now see how they are related to business?
Business genes are the building blocks of knowhow, of skills and technology.What is more important in the business context is the people and companies that act as vehicle for these business genes. Surprisingly the human beings are both the creators and vehicles for the business genes.
To be successful in business, you need not be the creator of ideas. Most people who become rich through business do so by using other people's ideas, not their own.
There are a lot of small companies that go bust every day. But Large companies are generally less likely to go bust. Why?
As per the natural selection, the species that survive for a longer time have evolved through a stiff competition and harsh environment. So, do large companies. But think of the near collapse of IBM and actual collapse of the Soviet Union. The primary reason being the vehicles carrying the genes(people)
Firms which outlive their usefulness are killed and at a rapid pace.
Inbreeding in organisations:
As per evolution, inbreeding results in passing a harmful allele(even if it is recessive) to the child because it is present in both parents. In organisations, the 'gene pool' is a combination of skills of people,contribution by suppliers and customers.If this is not sufficient enough to contribute considerably what do they do?
Simple they call the Consultants for change management implementation
Evolution requires continual experimentation and improvement. May be that's why Tata Motors has lots of Wingers in the market. Who knows which one of the ten will succeed?
During my school days, I always thought Biology is a dull subject but hats off to Koch for making it interesting to someone like me......
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2 comments:
hey jehan , looks like a gr8 book to read, a few observations based on ur review...Has the author considered the effect of the surrounding environment on the evolution of organisation. No organisation exists in isolation and the market it operates in plays a very imp role in whether the organisation would succeed or go bust.
I think species also succeed sometimes because of the sheer no, does this hold true for companies also...
Koch states that the environment decides whether the species survives or not and this aspect is same with the company.He says that even if you are good enough,if the environment or circumstances are not supporting, you will not survive in your business. One example here could be KP Singh of DLF who would not be known to us if the Haryana Government during 1980s didnot come up with a policy to convert Agri land for Commercial construction in Gurgaon. The rest is history for us to see...
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