It is not the strongest or the most intelligent who will
survive but those who can best manage change.
-Charles Darwin

 

Introduction

Business: Nasty, Brutish, and
Usually Short

 

In 2003, the Japanese construction company Kongo Gumi, Co. Ltd. celebrated 1,425 years in business. Created in 578 CE, the family-owned independent company traced its founding to Shitenno-ji, a Korean engineer brought to Japan to help build the Buddhist temple who stayed to create his own business. Sons, daughters, and sons-in-law ran the operation for centuries. Over its long history, this company built many famous buildings, one of which was the sixteenth century Osaka Castle. In the early 2000s it employed over one hundred people and enjoyed annual revenues of seventy million dollars. Alas, in 2006, like all individuals and eventually all companies, this ancient one succumbed, taken over by Takamatsu, a larger construction firm. The company had expanded its niche into buying land, borrowed money to do so, ran into a declining market, and could no longer service its loans: death from an inability to adapt to a changing environment.
It isn’t a stretch to think of the business world as acting like the natural one. Mistakes can be deadly. Even doing the right thing doesn’t guarantee survival. A good product, like film developed in a camera, can enjoy a brief time in the sun and then vanish. The world of Darwin is tough: short on sentiment and long on punishing weakness. There are no promises made, only the relentless pressure to adapt. Adapt and you live another day. Fail to adapt and you’re gone.
Survival of the fittest is a fact, not a theory. Lessons proven over millions of years are available to help your business survive and thrive. All businesses, strong or weak, new or established, large or small, exist in an environment trying to destroy it. Competition is the most obvious threat. Changing demands and expectations of customers is another. A third are the selfish demands and the personal and collective flaws of the people who make up your organization.
Before any business existed and eons before Homo sapiens were a twinkle in anyone’s eye, nature was honing a course all living things automatically followed. This process, evolution, tested the ability of organisms to adapt to changes in the environment. Those that adapted best survived. Those that didn’t died out (over ninety-nine percent of all species who ever lived are now extinct). What happened then and continues to happen now is simple: adjust when you need to or you’re gone.
To give you a solid basis for understanding how business can prosper from the wisdom of evolution, let’s take a look at the dynamics of the process.
In the mid-nineteenth century, Charles Darwin spent five years on HMS Beagle. Onboard the Beagle, he examined specimens and formulated his theory that living things descended from one common ancestor. He was writing up his theory in 1858 when Alfred Russel Wallace sent him an essay describing the same idea. Darwin rushed his thinking into print and has the honor of being the one who brought to the masses the discomforting notion that we are the children of monkeys. Today, Darwin is so famous he’s an adjective, while poor Wallace is a forgotten victim of the same evolutionary principle he espoused.
Life as we know it sprang from its simplest form around four billion years ago. Since then, natural changes in individual organisms passed to future generations, making it easier or harder for each species to survive. A favorable variation meant a species could adapt to a change in the environment, better compete in a stable environment, or move to and adapt to a different environment. Any of these positive events increased the chance of survival.
Other modifications, not so fortuitous, meant the organism would struggle to reach adulthood and procreate, and its offspring would also suffer a reduced chance of survival.
The evolutionary system operates because:
1. More offspring are born than can survive (think business start-ups)
2. Changes occur in individuals that can increase or decrease chances of survival (business decisions)
3. These changes are inheritable (business culture)
Darwin noted that when too many competed for limited resources, a struggle for existence ensued in which favorable changes enabled some to survive. This explains the diversity of living things as environmental and species changes occurred over long periods of time. Darwin’s concept of natural selection describes how nature responds, for good or for ill, to individuals within species. He noted how artificial selection, consciously breeding the finest stock, also enhances the chances of survival or other preferred outcomes like size, nutritional needs, or resistance to disease.
Natural selection is a long, random process, like a river winding its way to the sea. There is no assessment of the situation, only random events, and no planned outcome, only what eventually happens. An individual animal lives or dies—it doesn’t matter; the river makes it to the sea or becomes a lake; the outcome has no inherent value.
There are a few obvious realities to evolution. It functions because there are sufficient genetic variations in the population. Species that thrive in one environment niche are doomed if conditions change and they have no means to adapt. Buggy whip manufacturers come to mind.
Evolution isn’t at the organism level, but at the level of genes, which have no interest in the outside world. Species survive or don’t due to genetic changes that have nothing to do with responding to the environment. Species survival is an accident. Evolution is not smart; it does not have to be. Evolution just is. Your business, however, has to be smart and decide if the environment demands change or staying the course, as well as be able to make necessary and speedy changes.
Evolution works if traits that add to success are transmitted to progeny. Without this, subsequent generations lose evolutionary advantages. Traits that decrease survival chances should not be passed down. Companies that neglect their values and differentiating competencies often flounder in a sea of uncertainty and confusion.
Another obvious reality is fitness: the ability to survive and reproduce. Evolution (and survival) stops when either of these elements is missing. Offspring have to be both plentiful and have the right traits to overcome ubiquitous threats. Businesses will survive that adjust to changing market conditions and continue to produce products people want.
As we humans consider ourselves the top of the evolutionary ladder, we must pause at another evolutionary reality: simple organisms are the best adapted, and by an overwhelming margin. Most species are microscopic prokaryotes, forming half of the world’s biomass. Complex life forms are just more noticeable, not better or higher—a lesson we will explore.
Another reality is adaptations work only if they provide advantages to a species. Adaptations are changes that enable an organism to be successful in its natural environment or to a changing environment. In nature, these adaptations are accidents of genetic change. For business purposes, adaptations must be thoughtful and the right ones—think artificial selection versus natural selection, and think good hiring and nurturing versus poor hiring and neglect.
Lastly, no two species can occupy the same niche for an extended period. Natural selection forces species to compete and to change. This change can be to adapt to the environment better than the competitor or to become better suited to a different environment. Sometimes it is necessary to give up one environment to thrive in another.
Although there is a kind of wisdom in natural selection, at least for surviving species, there is no value. The winning species is the one most suitable to the current environment. That species could vanish instantly, and the world would continue without remorse or regret. The same is true of the world of business; eventually people get over loss and memories fade over succeeding generations.
There is an opposing point of view that should be mentioned: intelligent design. Supporters of this view dismiss Darwin, evolution, and natural selection as a theory. They focus on a minor definition of theory as a yet unproven hypothesis. This approach declares life is irreducibly complex and anything that complex cannot have evolved, over no matter how many millennia. Their main thrust is along the lines of: if an eye lens is useless without a retina and a retina is useless without a lens, how could either have evolved first? They say only an intelligent entity, a God, could have created the complexities we see around us. We believe in intelligent design, at least in the context of the marketplace. Design your business the best you can; we’re here to help.
How is evolution and Darwin’s findings part of your business? To start, your business is run by someone whose cousins are apes and chimpanzees, with all the baggage that implies. It occupies no special place in the universe. Your business is in a constant struggle for survival. One day, your business will die. Our new Darwinian laws are culled from the effect of evolution, and the process. The outcome of natural selection is an organism that is most capable of competing for limited resources—a desirable state for your business.
Quality pioneer W. Edwards Deming declared, “Every system is perfectly designed to get the results it produces.” Evolution produces organisms that are best adapted for the current environment. That’s all it does. It does not produce the strongest or the fastest or the biggest, just the ones that are the most suitable. What this means for business is those that are the greatest fit with changing customer demand are most likely to survive and flourish. A business has neither the time nor the luxury of hoping the forces of evolution will help it to succeed. You must create a business that is a good fit for a fickle audience and one that creates compelling value for customers with increasing efficiency.
We will explore natural selection to learn what “fittest” means for businesses so we are not victims of unfortunate mutations, bad luck, or divine cruelty. We will also explore how social evolution can be a factor. Social evolution enables those not the fittest to survive through social support. For example, ill newborns who would die without intervention can often be saved, sometimes to live out full and rich lives, and other times to be burdened with lifelong ills.
The same is true for a business. It can contain untold deficits, but continue surviving through government intervention, adroit mergers, IPOs, and other infusions of life support.
We will explore how leaders make the mistake of acting as if what succeeded last year should work this year—or worse, what worked for the last fifty years will work for the next fifty. We will explore how little organizational structure has changed in the last ten thousand years and how this hinders company survival in today’s rapidly changing environment.
Our goal is for you to manage a company that will be adaptable to change. In part, this means leadership is willing to listen and willing to hear the truth. It also means the entire company’s response is quick, decisive, and effective, in unison, as demands change. It can mean the company alters the environment, creating changes itself that improve survivability.
Mother Nature is ruthless and uncaring. You must be ruthless too, but you don’t have to be uncaring. In fact, if you understand that evolution works at the genetic level, and conceptualize that employees are like the genetic matter of an organization, you will value your people, the benefits of diversity, and the power of inclusion.
Natural selection has taught us that the key to survival is to adapt and adapt and adapt and adapt and adapt and adapt and adapt and adapt and…
New Darwinian laws can improve your chances of business survival and success. This book will help you understand what to adapt to and how. May you adapt well and thrive for a thousand years.

Law of Connectedness
It is only when you watch the dense mass of thousands of ants, crowded together around the hill, blackening the ground, that you begin to see the whole beast, and now you observe it thinking, planning, calculating.
It is an intelligence, a kind of live computer,
with crawling bits for its wits.
-Lewis Thomas

 

 

1

Small and Organized Beats
Big, Strong, and Smart

 

Humans can’t hold a candle to the collaboration of many of the most primitive creatures on the planet. In fact, numerous basic species have evolved into models of organizational behavior with such harmonization that they seem to be a single organism.
Organic cooperation is as helpful to the longevity of businesses as it is in nature. Organic cooperation describes individuals that act in such seamless collaboration that from the outside they appear to be a single and homogeneous entity, sometimes called superorganisms.
When many work together for a goal, great things may be accomplished. It is said a lion cub was killed by a single colony of ants. – Sakya Pandita
Ants are an obvious example of superorganisms that have survived for a hundred and thirty million years. While ants can thrive as individual creatures, their ability to coalesce into a superorganism-like colony enables them to survive and thrive when food is scarce. Even individual humans can be thought of as superorganisms when we consider that a typical human digestive system contains 1013 to 1014 microorganisms.

Superorganisms

A superorganism’s life force is to improve and survive at a much higher level than can be achieved by individuals. The advantages of the superorganism are obvious: the individual ant, bee, or bacterial cell is by itself small and often powerless in a world of much stronger predators. When associated with others who share a common survival interest, however, these unremarkable individuals can achieve extraordinary feats that far exceed the additive capability of each separate entity. The same is true in our own bodies. The human body is under constant attack by innumerable pathogens, and we’re often unaware that this biological war rages around us due to our “superorganism” immunity responsiveness.
Superorganisms often evolve and learn through adaptive and even sophisticated collective knowledge sharing. Though unintelligent by themselves, creatures that participate in natural superorganisms rapidly share information and make decisions in ways that approximate how the human brain processes data. Research into the instinctive behavior bees use to dance and interact with other dancing bees shows a striking parallel to how primate neural networks process information to decide among competing alternatives. In fact, the cooperative behavior of bee and ant colonies is studied as a model for designing artificial neural networks to solve a wide range of optimization problems. This is true synergy—not the term whose meaning eludes each of us and has become an empty business cliché. This is a real force multiplier practiced to perfection each day by the unlikeliest of small creatures.
Coalescing into a superorganism is automatic for some lower life forms, but more difficult for us higher types. Fortunately, research into biological superorganisms provides a workable blueprint for creating a business superorganism, which comprises six requirements.

1. Faith: Participants must believe that joining the superorganism will lead to a better personal outcome than would otherwise be achieved in isolation, or else they won’t join. This faith requires an implicit trust in and belief in one’s fellow participants in the superorganism to do the right thing and do it well.
Participation in superorganisms is risky, because it poses a classic moral-hazard dilemma. Participants have to rely on the competence and integrity of their fellow members to achieve a better outcome than they would realize by optimizing for their own self-interest. This works fine when all members advance the needs of the organization first, but will unwind at the first suggestion of selfish intent.
2. Commitment: Successful superorganisms require that participants share an absolute commitment to the well-being of the greater organization. Members must subvert their own individual interests, and even their own identity, to the greater good. Commitment at this level requires participants to share their talents and try their hardest because it’s the right thing to do, not because it’s asked or because they are being monitored.
3. Accountability: Each contributor in a superorganism is fallible and limited to its own individual potential. Because we are far from perfect despite our hopes and finest intentions, participants in superorganisms must hold themselves and each other accountable to their responsibilities in the organization. The greater interests of the organization are the driving concern. Energy and resources are routed straight to the area in greatest need to support the community’s goals. Each participant is obligated to assist others when they need it, just as ants or bees will support one another if attacked.
4. Cooperation: Cooperation is a skill, and participation in a superorganism requires an extraordinary level of collaboration and teamwork far exceeding what some people can achieve. Desire alone to join a superorganism is insufficient. Not all people can cooperate, even if they want to. It’s important for human superorganisms to screen candidates to make sure they have the potential and aspiration to be contributing, selfless members of the community. This also means that members who can’t or won’t cooperate with others are ejected.
5. Learning: A major advantage of superorganisms is their ability to evolve rapidly and make sound decisions through efficient information sharing. Superorganisms are learning organizations in which information is shared quickly and seamlessly to drive to optimal outcomes. In the process they learn how to realize even greater outcomes. Information is the lifeblood of twenty-first century business. Knowledge flows unimpeded through a superorganism just as electrical impulses flow through a brain’s neural network—decisions are rapid, and action is immediate. Human superorganisms cut out political pretense and protocols.
6. Synergy: While perhaps not a prerequisite for a superorganism, the most successful superorganisms invest in promoting a synergistic partnership with the world around them. Bees, for example, create honey and pollinate flowers, which increases their value to other animals and plants alike. Ant colonies play an important role by enhancing the decay of rotting vegetation and animals. Successful superorganisms make the world a better place even as they advance their own interests. In the same way, human superorganisms expand their value—and their probability of survival—by providing clear value to their community. Good citizenship can pay.
In nature, creatures like ants, bees, and amoebas organize into superorganisms because their DNA has programmed them to follow the six rules outlined above. In human organizations, we can understand and conform to the six rules of superorganisms if we so choose. The tricky part is that a superorganism culture requires every member to be willing to place the organization’s needs above his or her own.

Vox Populi: The Raw Stuff of Human Superorganisms

Contestants in the popular television game show Who Wants to be a Millionaire? were asked progressively more difficult multiple-choice questions, each worth more prize money than the last. As they answered questions correctly, they earned the opportunity to stop and take the money or put their earnings on the line to answer a harder question. The stakes increased up to a one million dollar grand prize. Contestants owned three “lifelines” that they could exercise to help them if they got stuck: cut the multiple-choice options to two, phone a friend, or ask the audience. Interestingly, when the contestant invoked the audience lifeline, the answer was correct an astonishing ninety-four percent of the time! The audience consisted of average people, not a panel of experts.
The name for this dynamic, in which the aggregate answer provided by a large group is more likely to be correct than the answer provided by an individual, is the “wisdom of crowds.” The wisdom of crowds idea suggests that, at least from an intelligence and decision-making perspective, humans have the innate capacity to collectivize into a kind of intellectual superorganism.
In his book The Wisdom of Crowds, James Surowiecki suggests that the following four key conditions separate so-called wise crowds from irrational crowds:
• Diversity of opinion: Each person should have their own unique understanding even if it’s just an eccentric interpretation of established facts
• Independence: People’s opinions aren’t subject to the opinions of those around them
• Decentralization: People can specialize and draw on their own private knowledge base
• Aggregation: Some mechanism exists for turning individual assessments into a collective decision
When all four criteria are in effect, a group can achieve a better answer than would otherwise be reached by an individual. Research suggests that the greater the diversity of the group, the more likely collective decision-making will be correct. In effect, the wisdom of crowds principle can have the potential to help shape a smart human superorganism.
If we have this innate ability to approximate the collective intelligence advantage of the superorganism, why do most organizations fail to realize the benefit? Why do we suppress the voice of most of our employees? Why do we invest significant decision-making authority in a single person or small cadre of leaders instead? There are two common excuses, one a cop-out and the other a cruel vestige of a Charles Dickens-style worldview. The cop-out is that it is too hard and takes too much time for us to coordinate our thoughts at a superorganism level in our organizations. The cruel lie is that most employees lack enough intellectual value to warrant being asked their opinions. To that we say if primitive creatures like ants, bees, and amoebas can cooperate and communicate so well, people should have no excuse not to coalesce into superorganisms.

We Get In Our Own Way

The brain of each animal is hardwired with a limited ability to change. The more primitive the creature, the harder it is for individuals to change. Conversely, the higher the level of the organism, the faster it can learn and therefore change. DNA drives the societies of many less sophisticated creatures to cooperate and communicate well through instinct. Human organizations are entangled with the self-inflicted complexity of personality conflicts, vanity-fueled ambition, well-intended but misguided policies, and mistrust. Each day, we tie ourselves up in more knots, making it that much harder to work together and to share ideas. Imagine an organization in which each person’s thoughts could connect with the minds of the right people who could share the idea, immediately and unfiltered. This would be like connecting the synapses of multiple people. While technology like email, mobile phones, and Instant Messenger can help to promote the exchange of ideas, they can also be our bane. Just look at the truckloads of messages that pile up in most inboxes and voice mail boxes each day.
Is it possible for people to join into a superorganism, or are we too smart for our own good? We invent tools and techniques that seem to make our lives more complex. Maybe our technology has already taken over.

W. L. Gore & Associates: A Case Study In Human Superorganisms

In 1958, chemist Bill Gore and his wife Vieve started a small company in their home to make insulated electronic ribbon cables. Over time, Gore grew his company, W. L. Gore & Associates, into an international corporation with a diverse product portfolio that now includes medical applications, guitar strings, and its famous waterproof Gore-Tex fabric.
Today, W. L. Gore & Associates is one of the two hundred largest private companies in the United States, with 2010 revenues of two and a half billion dollars. The corporation employs around nine thousand associates at over fifty facilities throughout the world.
In 2012, Fortune magazine recognized W. L. Gore & Associate on its “Best Companies to Work For” list in the US for the fifteenth consecutive year. Its subsidiaries have won similar acclaim in the UK, Germany, Italy, France, and Sweden.
What accounts for the company’s enviable and sustained record of achievement? For fifty years, the corporation has evolved into a most unusual—and to its employees, exceptional—culture. Bill Gore designed the company’s culture to encourage and empower employees to innovate, to advance the organization by tapping into their potential.
The Gore culture is based on the concept of a lattice organization. This is an egalitarian organization with few job titles, in which employees evaluate one another’s performance and each employee is a shareholder after one year. The company’s website describes the concept:
Gore’s unique “lattice” management structure, which illustrates a nonhierarchical system based on interconnection among associates, is free from traditional bosses and managers. There is no assigned authority, and we become leaders based on our ability to gain the respect of our peers and to attract followers.
You will be responsible for managing your own workload and will be accountable to others on your team. More importantly, only you can make a commitment to do something (for example, a task, a project, or a new role)—but once you make a commitment, you will be expected to meet it.
The culture is based on four Fundamental Beliefs and four Guiding Principles, which are more than the usual corporate talking points. This is what they say.
Fundamental Beliefs:
• Long-Term View: Our investment decisions are based on long-term payoff, and our Belief in the Individual: if you trust individuals and believe in them, they will be motivated to do what’s right for the company.
• Power of Small Teams: Our lattice organization harnesses the fast decision-making, diverse perspectives, and collaboration of small teams.
• All in the Same Boat: All Gore associates are part owners of the company through the associate stock plan. Not only does this allow us to share in the risks and rewards of the company, it gives us an added incentive to stay committed to its long-term success. As a result, we feel we are all in this effort together, and believe we should always consider what’s best for the company as a whole when making decisions.
• Fundamental beliefs are not sacrificed for short-term gain.
Guiding Principles:
• Freedom: The company was designed to be an organization in which associates can achieve their own goals best by directing their efforts toward the success of the corporation: action is prized, ideas are encouraged, and making mistakes is viewed as part of the creative process. We define freedom as being empowered to encourage each other to grow in knowledge, skill, scope of responsibility, and range of activities. We believe that associates will exceed expectations when given the freedom to do so.
• Fairness: Everyone at Gore sincerely tries to be fair with each other, our suppliers, our customers, and anyone else with whom we do business.
• Commitment: We are not assigned tasks; rather, we each make our own commitments and keep them.
• Waterline: Everyone at Gore consults with other associates before taking actions that might be “below the waterline”—causing serious damage to the company.
An enduring aspect of the Gore culture is the notion of dabble time. Gore associates are granted about ten percent of their workweek to apply to developing new ideas, and prototyping is encouraged. When an employee wants to be a product champion, she must convince others to dedicate their dabble time to the endeavor. In this way, promising ideas are tested and supported through the faith and grassroots energy of colleagues. Those who can persuade others to follow their lead become leaders in the company.
Synaptic Communication
Members of a superorganism share impulses without having to pass through intermediaries. Lattice organizations enable workers to share ideas without the delays of unnecessary approvals or the queue time incurred by crossing organizational silos. In this way, lattice companies allow the organizational approximation of the direct exchange of neural information across our synapses—synaptic communication.

Members in the lattice are encouraged to explore novel ideas and are trusted to do the right thing. Due to the egalitarian nature of the lattice structure, members form teams to develop their own plans and collaborate to achieve team goals. Rather than having to navigate non-value-added communication channels, workers are expected to communicate directly with others whom they believe can be of immediate help.
In a lattice structure, influence and credibility are gained through contribution, innovation, and skill, as opposed to positional authority and titles. Some individuals in a lattice cannot convince others to support their ideas. Those employees will either have to reposition themselves and their ideas to be of more value to the organization, or leave. There is an elegant dynamic of self-policing that occurs in an environment in which each member must be accountable to provide value to the organization. Unproductive overhead is largely alien in such a model.

 

Survival Guide

Organizations that are as collaborative and effective as W. L. Gore & Associates are rare. As companies grow, it becomes more challenging to work together. It’s ironic that, despite our larger brains and capacity for learning, we are no match for the humble ants and bees. We paralyze ourselves through our own bureaucracy rather than focus our efforts on driving more internal cooperation.
To understand how close your organization is to being a superorganism, consider the following checklist. Mark the appropriate box for each category, and tally up the marks for each category at the end.
R = Never/Rarely S = Sometimes A = Often/Always
R S A

Faith

Employees are confident that the organization has their best interest in mind.
__
__
__
Employees have confidence that their managers can be trusted to do a great job.
__
__
__
Managers do not feel the need to micromanage.
__
__
__

Faith – TOTAL
__
__
__

Commitment

Employees understand the organization’s vision and are committed to its success.
__
__
__
Employees are intrinsically motivated to put forth their best efforts.
__
__
__
Managers trust that employees are intrinsically committed to the success of the organization.

__

__

__

Commitment – TOTAL
__
__
__

Accountability

Employees hold themselves and their peers accountable to fulfill their responsibilities.

__

__

__
Employees willingly and immediately assist others on their team when needed.
__
__
__
Employees willingly and immediately assist others on another team when needed.

__

__

__

Accountability – TOTAL
__
__
__

Cooperation

Candidates for new roles are evaluated for ability to collaborate and desire to work in teams.

__

__

__
Employees seek opportunities to work in teams.
__
__
__
The most innovative or high impact outputs are created by teams rather than individuals working alone.

__

__

__
Employees who cannot or will not collaborate are removed.
__
__
__

Cooperation – TOTAL
__
__
__

Learning

Effective communication skills within and across teams are a core strength of the organization.

__

__

__
When errors are identified and corrected, the corrective information is shared across the organization to prevent its recurrence.

__

__

__
Information is not viewed as a basis of organizational power that should be hoarded.

__

__

__

Learning – TOTAL
__
__
__

Synergy

The organization invests in improving its community.
__
__
__
The communities in which the organization operates appreciate that the organization is there.

__

__

__

Synergy – TOTAL
__
__
__

If your organization scored fewer Often/Always than Sometimes or Never/Rarely in one or more categories, then there is work to be done to become a superorganism.
If your organization scored fewer Often/Always than Sometimes or Never/Rarely across every category, you have a solid foundation to become a superorganism. Your efforts should be to hone these capabilities into a solid framework of success.