Basically, organizational change is so hard to pull off because established values and systems produce a rigidity that’s almost impossible to change from inside.
In 1973, a University of Chicago biologist theorized that most creatures— including humans—must reproduce because new genes ward off stagnation and keep the next generation strong. The biologist named his theory after the character in Through the Looking Glass who tells Alice: “Here, you see, it takes all the running you can do, to keep in the same place.”
Likewise, market disruptors in business are like environmental changes or attacks by previously noncompetitive predators. Leaders have two ways to enlarge their gene pools and fight back:
- Mergers/acquisitions would seem to bring in new genes. But in fact, mergers are less like mating and more like eating. The acquiring firm gobbles up the acquired firm and only the diner’s DNA survives.
- Spinning off new divisions is far more successful. Independent business units form priorities and structures that are different from the parent’s. They avoid internal pathogens and ward off outside attackers.
For years, scientists debated whether evolutionary change was gradual or happened in fits and starts. Darwin thought it was gradual, but in 1972, two paleontologists proposed that evolution has long periods of stability interrupted by short bursts of change driven by environmental cataclysms such as ice ages. In rapidly changing environments, many new species emerge and some old, stable species (dinosaurs) perish.
How does this theory apply to business? How about the Internet, a change that revolutionized many fields and is poised to reshape more?
With their equilibrium disturbed, markets are mutating quickly. Unless leaders refresh their gene pools, they’ll die.
— Adapted from “Lessons From the Red Queen,” Francisco Dao, Across the Board.