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Jack Welch, the famous and former CEO of General Electric (GE), once said that the markets in which GE competed were “brutally Darwinian.” The expression is apt because competitive markets always enforce a natural selection where only the fittest firms survive. As in nature, firms that can’t usefully adapt to their natural competitive environment will not survive in the long run. Yet, while adaptation is the essential process through which the fittest survive in nature, is it really the preferred process for sustainability in a competitive business environment?
Russian biologist G.F. Gause (1910–1986) formulated his law of competitive exclusion when he stated the proposition that two species competing for the same resources can’t stably coexist if other ecological factors are constant. One of the two competitors will always overcome the other, leading to either the extinction of one competitor, or requiring an evolutionary or behavioral shift on the part of one toward a different ecological niche. In biological systems, species either adapt to changing conditions or die. The fittest and most adaptable survive and displace the rest. In biological systems, adaptation is reactive; it is the response of a species to changes in its environment.
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Comments
Learning to Adapt or Learning to Renew?
I mostly agree with the insights and advice provided in the article. My perspective with regards to Darwinian competition and the concept of adaptation is slightly different. I suggest that mutations are rampant and they are the norm in species evolution. A particular trait survives because it is most suited to the prevailing environment and is 'selected'.
Similarly, companies should generate rampant 'mutations' of the products & services they offer and let the prevailing environment select which ones are best suited for it. Toyota captured market share by offering a dizzying array of variations for customers to select from. All the while improving the quality and manufacturability of 'strong' traits; passing them down from generation to generation, and killing off those traits that were no longer in favor.
The difference in evolution in nature as compared with the business world is that companies have the opportunity to incorporate lessons learned by their competitors from mistakes made or successes had. But, it is true that a 'me too' approach will not be enough.
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