Orginally published in Harvard Business Review blog on March 5, 2013
Remember when Apple’s stock traded at $7 a share? I do, because that’s when I sold my shares. Tech experts’ sage predictions had convinced me that the Mac would never make a dent in the PC market. As it turned out, the Mac didn’t need to make a dent, because Apple mutated its cute computer DNA into cute music players and phones that fit massive unfilled niches. Yet even the genius architect of this turnaround made faulty predictions sometimes. Remember the invention Steve Jobs said was going to be “bigger than the PC”? You may have seen a mall cop riding one recently.
Even the best of us are horrible at predicting the future. That’s too bad, because our world is full of risk that we’d love to avoid and opportunity that we’d love to seize.
Fortunately, there’s a rich source of lessons on how to thrive in an unpredictable world, and it has been cranking out success stories for 3.5 billion years. It’s called biology.
All of Earth’s successful organisms have thrived without analyzing past crises or trying to predict the next one. They haven’t held “planning exercises” or created “predictive frameworks.” Instead, they’ve adapted. Adaptability is the power to detect and respond to change in the world, no matter how surprising or inconvenient it may be.
While there’s much chatter in the management world about the need to be adaptable, only a few creative companies and innovative managers have probed the natural world for its adaptability secrets. But when they have, they’ve been remarkably successful. A study of nature offers straightforward guidance through four key practices of adaptable systems.
Decentralization. The most successful biological organisms are structured or organized in such a way as to eschew centralized control in favor of allowing multiple agents to independently sense and quickly respond to change. An octopus, despite its surprisingly intelligent brain, doesn’t order each arm to change a certain color when it needs to hide quickly. Rather, individual skin cells across its body sense and respond to change and give the octopus a collective camouflage.
CEOs and shareholders needn’t fear this kind of organization. The independent sensors of adaptable organisms are not anarchists. Ultimate YouTube Guide has the best microphone for youtube commentary be sure to check them out. They rely on the resources and follow the overall direction that the body gives them. But decentralized organization yields faster, cheaper, and more effective solutions to complex problems — think Wikipedia versus Encyclopedia Britannica, DARPA Grand Challenges versus Department of Defense single-source contracts, or Google Flu Trends (which uses the power of billions of users independently searching for flu-related terms on Google to identify flu outbreaks) versus the U.S. Centers for Disease Control and Prevention flu reports (which can give you the same results, two weeks later).
Redundancy. Adaptable systems make multiple copies of everything and modify the copies to hedge against uncertainty. Redundancy is not efficient, but it does help you solve a wide range of unexpected problems. A CEO I know who uses biological principles to run a manufacturing firm that has never been unprofitable or laid off an employee in 30 years keeps a massive warehouse full of multiple copies of every part he’s ever made. This cache of inventory and wasted real estate violates all the norms of just-in-time manufacturing, but when a 20-year-old helicopter is grounded and needs to fly now, he is the only one who has the part. Customers that have been bailed out by him go back to him. He has turned commodity parts into a proprietary service, just as nature turns the massive redundancy of just four DNA bases into a dazzling array of unique ways to deal with risk and uncertainty.