Just in case you weren’t paying attention: We live in turbulent times. In five months, Napster went from having 1 million to 10 million users. Eleven months later, it had 80 million users — the most successful technology introduction of all time. And then it essentially went out of business. (Now it’s back again — maybe.)
Some of the most popular shows on network TV are in formats that didn’t even broadcast in prime time three years ago.
The price paid by marketers for Web traffic dropped as much as 99% in a 99-day period.
Last year, 17,000 new grocery products were introduced. Yet the average grocery store stocks only 30,000 items.
Is there any question as to what’s going on here?
Successful Businesses Hate Change
Everything in our world — from marketing to technology to distribution to capital markets — is changing faster than ever (and not always in the same direction). Yet most companies are clueless about what’s causing the change, how it might affect them, and, most important, what to do about it. Successful businesses hate change. People with great jobs hate change. Market leaders seek out and cherish dependable systems.
But upstarts and entrepreneurs love change. Turbulence scrambles the pieces on the game board; entrepreneurs get a chance to gain market share and profits. And since there are always more competitors than market leaders, there’s a huge demand for change. More innovation! More competition! More change! It won’t go away. It will only get worse.
Stable times force us to think of our companies as machines. They are finely tuned and easy to copy, scale, and own. We build machines on an assembly line, focusing on how to make them cheaper and ever more reliable. If your company is a machine, you can control it. You can build another one, a bigger one. You can staff it with machine operators and train them to run it faster and faster.
In times of change, this model is wrong. Our organizations are not independent machines, standing in the middle of a stable field. Instead, we work for companies that are organisms. Living, breathing, changing organisms that interact with millions of other living, breathing, changing organisms.
This is not business as usual. It’s a new principle that is going to feel unnatural at first. We will need a new vocabulary just to discuss it. We will need to reinvent what it means to lead or to work in an organization.
The Evolution Alternative
Evolution — defined as inheritable modifications over many generations — is the most powerful tool we have for dealing with change. Individuals and companies can put this organic process to use by permitting change to occur, by not fighting it. A mutation is a mistake or a random feature that is created when a gene, or an idea, is altered and then transferred. By finding positive mutations and incorporating successful new techniques into a company’s makeup, organizations can defeat their slower competitors.
It is our fear of changing a winning strategy and our reliance on command-and-control tactics that make us miserable — not change. Change doesn’t have to be the enemy. We start bypassing our fear of change by constantly training people to make small changes. I call this “zooming.” Then we can build a company that zooms and attracts zoomers. As the company gathers steam, it will distance itself from its competitors and dominate markets by embracing the changes that will inevitably come.
Denying Evolution Doesn’t Make It Go Away
The simple engine of evolution — inheritable changes in the species occurring over thousands of generations — can produce extraordinary results. No factory has ever produced anything as marvelous as the bird, yet birds evolved from a simple single-celled organism, one step at a time.
Charles Darwin felt that people have trouble visualizing anything that took place over the course of a hundred million years. These days, in a world where McDonald’s aims to provide you with food in less than 60 seconds, it may be even harder for people to make the leap.
Business is now at a turning point. Memetic evolution — evolution caused by memes, or ideas or units of innovation — is driving our companies to change faster and faster. Yet most managers and CEOs do everything they can to keep their companies from evolving. They deny that evolution is a powerful force for change and rarely consider how it might actually help them compete.
Companies, from Kinko’s to Starbucks to Viacom, almost never follow a master plan to success. Instead, they morph and grow and change until they become successful. And then such companies willfully stop evolving. Like most successful companies, they create roadblocks designed to slow evolution. They write policies and form committees. They invest in factories and the people who run them. These are universal roadblocks to evolution, and they are built into the fabric of the organization.
Penguins don’t evolve on purpose. They don’t have meetings about evolution. They don’t debate the most effective routes for their future on the island. Instead, evolution is built into their daily lives and embodied in their reproductive cycle. Because evolution is automatic, it happens whether the penguins find time for it or not.
The difference between a penguin and your company is simple: While both have evolved to a point where they can succeed, the penguin continues to evolve — but your company tries not to. Your organization, unlike the penguin, is built on the fictional idea that someone is in charge, that the world is stable, that you get to choose what happens next.
Evolution From the Ground Up
The giant system that we call business is really many smaller systems, all entwined. Change starts with you, the employee. You work in a department or in a group. That group makes up one of many divisions, which constitute a company. The company is part of a system that might be called an “industry sector” or a “vertical market.” And ultimately, your company, all of your competitors, and all of the other industry sectors out there complete the picture.
At each step of the way, there’s a memetic code (memes operating as the business equivalent of genes), competition, and evolution. When a division starts to rack up more sales, it gets more employees, becomes more influential within the company, advances the careers of the people who work there, and changes the fabric of the parent company. At the same time, it disturbs the competitive balance of its market.
While most executives like to start from the top and work their way down an organization, evolution doesn’t think that way. It’s the individual organism that drives the process. If one species starts to dominate an ecosystem, it isn’t because of a central decision. It’s because a few animals were more fit than their competitors, and they passed that fitness on to their offspring.
Your résumé, combined with the people you know, your personal brand, your reputation, and the rules you follow, constitutes the “mDNA” — the genetic code of your job — that you bring to work every day. You’re the key element in an organization’s evolution. You and your coworkers determine which paths the company will take.
The next step is the company. Your company consists of the mDNA and winning strategies of all of its employees, working together, separately, or at odds with one another. Just as your liver isn’t usually concerned with the well-being of your left kneecap, it’s not unusual for one segment of a company to be indifferent to — or even at war with — another, with each one working to defeat the other in competition for resources.
Going a step higher, entire markets also evolve. A new technology can change an industry, and an entire industry can respond by changing its mDNA. The behavior of the pharmaceutical industry in South Africa as it adjusted prices for AIDS medication is an example of a market changing its mDNA. Major pharmaceutical companies are now adjusting their actions to deal with the new market reality that governments and NGOs are becoming involved in drug pricing.
If you look at genetic evolution the wrong way, it seems like nothing but noise: billions of organisms, with no one in charge, all reproducing as fast as they can and competing for one niche. But at the closest level, evolution makes perfect sense. Two organisms compete, and the one that wins passes on its genes. At the most remote level, it makes sense again. Over millions of years, this apparently senseless turbulence has produced the human eye, the elk, the skunk, and Apollo 11. It’s only in those in-between views that evolution appears to be unorganized and teetering on the edge of disaster.
It’s in the middle — at the desk of the harried middle manager who desires control and has none — that it appears to be a total disaster. And so far, most change efforts have focused on the middle, because that is where bulk meets power. It’s no wonder that few organizations have embraced zooming. The people who need to do the embracing have to change the most.
The Über Strategy?
Michael Porter, the famous strategy guru at Harvard Business School, has pointed out that the new economy isn’t that new and that the old strategies are just as important — if not more important — than they ever were. On one level, he’s correct. No one has suspended the laws of economics.
On another level, all corporate strategy has been based on one fundamental assumption: We can predict the future and influence its course through our actions. The role of zooming in strategy is simple. It’s based on the idea that you don’t know what’s going to happen. You overlay a new strategy on top of all of your other strategies. This über strategy is simple: Build a company that’s so flexible and responsive in the short and long term that you don’t care what happens. As long as there’s a lot of noise and disorganization and change, you’ll win.
In today’s world, betting on chaos is the safest bet of all.
Seth Godin (firstname.lastname@example.org) is the author of Survival Is Not Enough (The Free Press, 2002). Learn more on the Web (www.survivalisnotenough.com).