Faced with disruptive changes to the economic environment, only those businesses that are flexible and responsive can survive and prosper. Those not responding quickly enough will die off like the dinosaurs, but it’s getting harder to react enough in time – now you need to pre-empt change.
This article continues to illustrate the risks of not being ahead of the game so looks at investing wisely in exploiting advances in materials and technology to survive and prosper, like the birds.
After the meteorite impact on the Earth 65M years ago, nearly all dinosaur species died off quickly, unfit to survive the conditions following. Only dinosaurs that had already evolved into birds survived.
Figure 1 - There are many parallels between businesses and species.
Both appear, grow and evolve, and face extinction.
Can we draw some insights for businesses from the evolution of species?
Until the 19th century, people believed that species were unchanging, then Charles Darwin showed that species changed over time to exploit new opportunities. In the 20th century, Steven J Gould and collaborators showed that most species either became extinct or evolved in very rapid spurts, followed by long periods of little change.
Figure 2 – Creation, Darwin’s gradual evolution and Gould’s “punctuated equilibrium”
Mass extinctions litter Earth’s history, most famously the end of the dinosaurs, and were caused by massive disruption to the environment. Each time, many species died off, leaving just those that were agile, adaptable and tough enough to exploit the new environment.
Similarly, history is packed with great companies that failed to evolve to meet the changing world, e.g. Blockbuster. Even some companies showcased by Jim Collins in “Good to Great” as getting things sustainably right have since been re-branded, dissolved or taken over.
What does this sort of disruption do to our figure in previous posts?
Responding to events rather than pre-empting them can easily lead to being out-evolved, as Boeing’s unfolding 737 Max saga illustrates.
If we look at corrosion protection coatings, as corrosion testing is time-consuming, proving a new protective coating takes around 7 years. These products are value-engineered down to the minimum cost possible; can you afford to invest in developing new products now that are too expensive for the current marketplace? If this allows you to survive a market disruption that would drive you out of business, can you afford not to?
What sort of disruption might corrosion protection face? Regulators and market forces are driving two primary trends:
- Reduced health hazards, both to product users and to the wider environment
- Increased sustainability (also resulting in more effective performance)
The disruption of banning solvent-based coating systems seems inevitable. The growing awareness of climate change and role of oil-based ingredients is a driver for change that could easily become disruptive too. Are either likely to happen within 7 years? Quite probably, so products that meet those demands need to be under development now.
So how can we manage that?
If your business is to thrive, it needs to be both agile and forward-looking, and be a bird, not a dinosaur.
In the last post I referred to McKinsey’s principles – I start to probe these more deeply in the Download available below.
Previous posts in this series:
Andrew is a management consultant and author with 30 years of experience in managing projects and business change. He works at board level down to understand and remove the blockers to innovation and successful change. His education was as a scientist and software engineer, leading to 12 years in applying artificial intelligence to real problems (including combat systems) before moving into more general change management. After 8 years working in a consultancy role, he became a freelance and has since worked for a wide variety of clients, from engineering to financial services. Working with such a diverse set of clients has given him an extensive insight of both the financial and behavioural challenges to innovation, and some thoughts on when and how they can be overcome.
Never miss out
Sign up to our blog for all the latest trends