15 January 2009

Pinto's Point

Business lessons from biology

By Jim Pinto

As the world accelerates, serious problems keep occurring again and again because of old thinking. What is needed is a profound shift in how we see the world and how we behave.

As we move from a mechanistic to an evolving “biological” view of business, we begin to see that adaptation and flexibility are important for continued success.

In an article in the September/October 2008 issue of World Future Society’s Futurist magazine, Arnold Brown compares biological adaptation with traditional business mechanisms. An insightful 1999 book, The Biology of Business, shows how top-down management methods no longer work in an age of fast technological change and world competition.

Until recently, we have seen companies as machines, as inanimate objects. And we have expected them to continue to “operate” forever in an efficient, mechanical way. Add a little oil to keep the gears from seizing, maybe throw in an occasional replacement part, and the company will roll on. The people may die, but not the company.

We need to recognize companies are living organisms, and they have lifecycles. Older companies cannot seem to learn new tricks, while younger companies have the energy required for innovation.

Capitalism has two primary goals: Growth and profit. The lessons of the dinosaurs demonstrate that growth becomes a burden—the things that can sustain growth quickly run out. Efficiency (profit) is also elusive in fast-changing environments. Success through making things more efficient comes only if the world does not change. But, there is always change.

Efficiency has an unfortunate tendency to de-generate into bureaucracy. Doing everything by-the-book can become farcical. Yesterday’s rules for efficiency may be counter-productive for tomorrow. Focusing on efficiency makes “process” more important than it should be.

In a changing world, striving for efficiency dissipates energy. Throw away your archaic process and procedures manuals. By the time they are written, they are obsolete. Instead, people must be free to manage themselves and come up with new solutions. Flexibility and adaptability are the best ways to gain the competitive edge.

Related Links:

• Fastcompany – The Biology of Business:
  http://www.fastcompany.com/magazine/70/rightnow.html
• Review & read The Biology of Business on Amazon.com:
  http://www.amazon.com/exec/obidos/ASIN/078794324X/jimpintocom/103-0805027-7623017

Behind the byline

Jim Pinto is an industry analyst and founder of Action Instruments. You can e-mail him at jim@jimpinto.com or view his writings at www.JimPinto.com. Read the Table of Contents of his book, Pinto’s Points, at www.jimpinto.com/writings/points.html.