What Does "Evolution" Mean for Enterprises?

In most cases, the answer to the question in the title is one word: change for the better. Much scientific research in the management field has stemmed from Charles Darwin and other famous biologists. In particular, this research has often used comparisons with biology to discuss about the determinants of organizational change and growth processes in business, particularly when dealing with how competition and survival work between and among firms.

Think about the concept of "selection". In the classroom, for example, I often explain that, in the natural environment, Mother Nature mostly determines which giraffe is selected and which is selected out; in presence of resource scarcity, the giraffe with the longest neck can reach the top of the tree can eat the leaf and survive. When a start-up enters the business arena, there are mature counterparts that usually play the role of Mother Nature by establishing the rules. Occasionally, however, high growth start-ups, such as the well-known “Unicorns”, can also emerge; they are so disruptive that they overturn these rules and establish new ones.

During their evolutionary process, companies can even become key providers of well-being for their whole general environment; in such cases, these companies determine a "selection regime" which also makes it more likely, for external stakeholders, to support them when in the midst of a crisis. One example which I often use in the classroom is that of General Motors, a famous market leader in the automobile industry and a significant job creator especially in US. When GM faced difficult times during its financial crisis at the end of the past century, the US government strongly supported it (hence the nickname “Government Motors”). GM had become a company considered to be indispensable to the economy.

In both management and biology, there are a huge variety of species. In biology, however, evolution tends to be slow while in management changes can also happen radically. In biology, the concept of selection is mostly environmentally driven. In management, on the contrary, there are, at least, two key variables "co-evolving": companies on the one hand, and their competitive environment on the other. Their power relationships are dynamic, can change quickly and are variable.

Company leaders can learn significant insights on evolving and surviving in our complex times by analyzing the various similarities and differences between organizational and biological evolution.

If interested, you can also read my brand new shortform book Enterprise Evolution, Survival and the Businesstype. From Research to Practice, published with Routledge.