Nine Provocations

Here are nine rather counter-intuitive recommendations for your business. They are based on the idea that businesses are living organisms -- and so the best ways to design and nurture them are those successfully evolved by nature over 3.5 billion years of R&D.

1. Spend more, don't cut back -- Studies show that investment in R&D goes down in hard times, yet in nature the opposite is true -- the mutation of bacteria rises when they are stressed. In a fast changing world, all firms must change to survive, and that means spending on new projects.

2. Abandon targets and business plans -- People aren't machines, and they don't need to be programmed. Organisations should capture wild employees and rein them in just enough so they are pointed in the right direction. Build some simple rules and feedback systems that define the game you want them to play, and stand back. Actively disorganising in the right way builds robust and adaptable organisms.

3. Don't innovate radically -- recombine existing, proven approaches instead of pioneering substantially newer technologies. Evolution takes what is to hand and then builds the unexpected from reliable parts fitted together in new ways. Of a million patents analysed in one study, over 90% were variations on solutions already in existence, often from within the same industry.

4. Be nice to your competitors -- co-operation is THE great source of innovation in evolution -- recognised by biologists as more important than competition. Creating the pie is often co-operative, while dividing up the pie tends to be competitive. However, the whole ecosystem has to flourish in order for you to flourish, and that means you need healthy competitors.

5. Don't solve problems -- spending time ironing out small problems in an existing system diverts attention from the next stage of your development. Nature devotes time to reproducing and eating -- increasing revenue, rather than cost cutting or reorganisation.

6. Give away your products -- when colonising a new habitat, organisms operate on tiny margins to outcompete others and become dominant, getting fat later when they are established. In the same way it can make sense to give products away at cost or for free in order to capture market share, and then sell services or consumables to increase margins.

7. Waste time and demand mistakes -- natural systems know when to work and when to play. Kestrels only hunt from 9 -12 and again from 3 -5 pm. All animals play, explore, and make many mistakes, but always learn from them. Creative thinking and play, often regarded as "wasting time" by traditional managers, is vital for developing new ideas. At Honda, 90% of R&D projects fail, but most are recombined into successful new projects later. High levels of failure are not only inevitable, they should be mandatory -- instead, almost all organisations still regard failure as taboo.

8. Kill off successful product lines -- products have a natural lifecycle, with sales growth following an 'S' curve that reaches a plateau and then inevitably tails off. If a product is heading back downwards, you can let it slide while you devote energies to the next project. Decaying product lines can lead to layoffs -- so kill off dying products before they kill you.

9. Managers don't matter -- there are no managers in nature, where most systems are self- organising. Many investors recognise that the success of a business is more dependent upon its basic design, and whether it's in the right place a the right time, than on the quality of its management.