Can Darwin teach us how to adapt to the era of the digital customer?

One-hundred-and-fifty years ago Darwin published his seminal theories on evolution. Today, those theories have been given a novel new perspective to offer insight on one of the biggest issues facing business today: how can companies become both digital and more human-centric?

Evolutionary theory and the digital revolution

In the 19th century, Charles Darwin’s publication On the origin of species (note 1) introduced profound new concepts about how natural ecosystems have evolved, based on principles such as ‘survival of the fittest’ and ‘symbiosis’. Fast forward 150 years and we see the rate of corporate failure increasing due to demographic shifts and the impact of the digital revolution.

Change has never been so rapid as in today’s increasingly consumer-centric world. The net result is that companies can now rise and fall faster than ever. Being the biggest business, with the longest heritage in the market, is no longer a guarantee of survival. According to Richard Foster at Yale University, the average time a company in the 1960s would spend on the US S&P 500 index was over 60 years. Now it is less than 20, which means that 3 out of 4 companies will not be on the list in 15 years’ time. (note 2)

We are in the middle of a digital revolution, catalysed by wave after wave of technology, from the world wide web to social media and mobile devices, each extending the potential reach and scope of an organisation’s products and services. Alongside such a wealth of opportunity is the threat of demise, however. Organisations have the choice to run constantly behind the curve of innovation, or to look to established models to learn how to respond to change and develop a core focus on what consumers want, need and expect.

Applying Darwinism in the context of digital change

This book applies the famous naturalist and geologist’s theories to the struggle for corporate survival in today’s fast-paced environment. Darwin’s models, in particular the theories of natural selection and symbiosis, hold four keys to corporate survival in a consumer driven world.

Supercharged instinct: Just like eagles have developed advanced pattern recognition to detect camouflaged prey, businesses need to develop the ability to detect weak signals in customer behaviour, preferences, attitudes, context and any other data they can access. Companies need internal processes, procedures and systems that are flexible enough to enable organisations to respond quickly to weak signals that are detected.

Migration: Just as salmon investigate far-off environments in search of resources, businesses should be constantly exploring options and opportunities to migrate some of their activities to more favourable environments, too (for instance, less competition or cheaper solutions). In the digital ecosystem the costs of exploratory migration are low, but the price of standing still is high because the environment is changing.

Businesses should identify opportunities through digital media to act at multiple places in their existing supply chains. They should then take radical approaches to trialling new habitats, whilst constantly involving customers as co-producers in the process of exploration.

Natural selection: Companies should be aware of natural selection as a model for business. Integrating this well-known Darwinian principle unlocks a new perspective on business operations. Instead of relying solely on corporate research and development functions to generate new product and service ideas, customer-generated product concepts can originate in niches and compete organically for resources within the company. Ideas with potential from the marketplace should compete with in-house initiatives, to grow and then populate other niches. To do this best, companies should embrace variety – allowing multiple solutions to be generated.

Next, companies should embrace natural selection processes. Small project teams should sometimes be allowed to work in competition with each other and to build on customer- or employee-led innovation. Most important of all, businesses should be prepared to fail fast – failing fast means failing cheap. Company mentality needs to shift from long-term, top-down planning to a mind-set of rapid, bottom-up innovation and adaptation.

Symbiosis: In natural selection, the ‘fittest’ means the organism best suited  for a given context or environment. Darwin noted in The descent of man (note 4), ‘In the long history of humankind (and animal kind, too) those who learned to collaborate and improvise most effectively have prevailed.’ In today’s connected environment, populated by hybrid consumers who are always switched on and connected to one another, the authors believe that collaborative relationships between companies and consumers are the defining feature of sustainability. Such an outlook makes clear that customers are a company’s biggest resource in the development of products and services. In order to succeed, a business must unleash customers’ potential symbiotically.

In the long history of humankind (and animal kind, too) those who learned to collaborate and improvise most effectively have prevailed.

CHARLES DARWIN

This leaves a fundamental and intriguing dilemma – how can companies become simultaneously both more digital and more human-centric? To answer this, the authors advocate the careful deployment of a modular, customer-based foundation for innovation: what they term a ‘symbiotic  experience platform’, with the following four characteristics:

1. Customer centred
2. Based on open technology
3. Exemplary in its treatment of human resource management and its governance
4. Focusing on endless innovation and ability to improvise rather than overplanning

Using a platform with the above capabilities, guided by the four nature-inspired models (supercharged instinct, migration, natural selection and symbiosis), business processes are redefined to put the customer at the core of the business model. This requires a change of perspective: instead of isolated economic actors, think interaction; instead of fixed certainties, think endless adaptation; and instead of ruthless competition, think cooperation and symbiosis. Companies that forget this fundamental principle are likely to be consigned to the catalogue of extinct species.