Lane on… The Evolution of Business

My oldest daughter and I recently went diving and hiking in the Galapagos islands, long a bucket list destination of mine.  In Puerto Ayora, the principle town and jumping off point for adventures, they sell a tee shirt that says:

It is not the strongest of the species that survives, nor the most intelligent that survives. It is the one that is the most adaptable to change  – Charles Darwin

While the correct attribution of this quote is Clarence Darrow, not Charles Darwin, it can still teach us a great deal about business.  Any business that survives must be prepared to weather changes and shocks.  We’ve had quite a few of these in recent years: materials price increases, the downturn, the cash crisis, and maybe downsizing.  And now this year is no exception with the Japanese earthquake and resulting Tsunami, the impact of which is just beginning to be tallied. 

And this is not just a recent phenomenon; the history of the Dow Jones Industrial Average (DJIA) shows a series of economic and other shocks throughout its 127 year history.  Every few years there is a significant shock. 

Much like organisms in nature, the firms that do well in any particular time are the firms that are best adapted to the external environment around them.  Most firms understand this and have efforts underway to improve the performance of their business.  Best in class firms, however, take this to another level.  They focus their improvement efforts on their abilities to change.

This requires a commitment that is sometimes hard to make.  If we are already pressed for resources to take on the improvement initiatives we have underway, how can we allocate resources to make change happen all the time.  But it is this commitment to maintaining a change agency within the organization that sets apart those who merely survive and those who thrive.

There are several advantages to embracing change as a discipline as opposed to something that must be avoided or controlled:

  • Change friendly firms have an almost perpetual first mover advantage since they are usually first to anticipate a change and respond effectively;

  • The discipline of becoming good at change makes those other improvement initiatives faster and therefore more profitable, since benefits accrue earlier; and

  • Morale is better; planning and acting to create change is invigorating and engenders hope and brighter expectations for the future.

If you look at the very small percentage of firms that deliver a track record of profitable growth you will find all of them have designated change teams to recognize coming needs for change and to plan and deliver the firm’s response to that change.

This encore post was originally posted in April 2011