Why business is like: Evolution

It's 200 years since Charles Darwin's birth, and 150 since his great work On the Origin of Species was published.

by Jennifer Harris
Last Updated: 31 Aug 2010

But his revolutionary theory has lessons that recession-hit business can learn from today.

Companies depend on new ideas to keep them successful. Ideas are like the mutations that Darwin noted: spontaneous changes in an organism's physical or chemical way of doing things. He realised that mutations happen all the time but most don't work out - just like new ideas. Only changes that confer competitive advantage are successful.

Palaeontologists Eldredge and Gould added a twist in 1972. They proposed that, unlike the mutations that produce it, evolutionary change is not constant. Instead, like business, it is cyclical; long, benign periods of relative stasis, punctuated by short, frantic bursts of change.

In other words, major upheavals don't happen often, but when they do, both organisms and businesses must adapt or die. It's at such times of stress that the ability to mutate - to come up with new ideas - can make the difference between survival and oblivion.

So, rather than treating downturns as punishments to be endured, bosses might see them in evolutionary terms: as periods of far-reaching change when big stuff happens. Adversity does breed innovation: more than half the firms in the Dow Jones index were set up in a recession.

Jennifer Harris is director of JRBH Strategy & Management, www.jrbh.co.uk

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