Friday 4 December 2009

Survival of the fittest

This year marks both the 200th anniversary of the birth of Charles Darwin and the 150th of the publication of his book, On The Origin of Species. This masterpiece of modern, rational and scientific thought forced humanity to reconsider and re-evaluate it’s position in the grand scheme of things. At it’s heart, Darwin’s theory of Natural Selection is remarkably simple. Those members of a species who are better adapted to their environment are the ones most likely to live long enough to pass on their better adapted genes to their offspring. Very gradually, generation by generation, this can bring about a significant changes to a species as a group.

As you may have seen various TV programs, books, news items and newspaper articles have commemorated these anniversaries. In one that I saw the day I wrote this, Richard Dawkins, one of the world’s leading evolutionary science communicators explored the parallels that might exist between evolution in biology and the business world. Very often you’ll hear phrases stolen from the world of biology used in business. You’ll hear people talk about “survival of the fittest”, of “dog-eat-dog” and of the “life-cycle” of business.

Of course these parallels are true to an extent but, like evolution, they’re not always obvious. Evolution doesn’t always favour the strongest specimens but those that are “fittest”. Not “fit” like a body-builder pumped full of steroids, but “fit” like a jigsaw piece fits. It’s the animal that fits best into it’s environment that is most likely to survive and pass on it’s genes. It’s the same in business. It’s not always the hugest, most macho companies that do best. Sometimes it can be a smaller company, the more agile, flexible and adaptable companies that survive. Often you see companies that become so old-fashioned, so slow and so cumbersome that they are obsolete.

Of course one of the other parallels with evolution is that often businesses survive through nothing more than sheer, dumb luck. Right place, right time, right customer and it survives a little longer. However in the long run that’s not a recipe for success.

The question of course is how a company can “fit” best into it’s environment and succeed, passing on it’s business genes to it’s child companies. One of the perils of being in a consumer-focussed team is that you learn more about how companies shouldn’t do things than you do about how they should. However I think you can learn a lot about success by studying failure.

Forgive me. Here comes a very poor quality analogy.

For a few years we’ve been applying evolutionary pressure to furniture stores, trying to persuade them that their survival might depend, ever so slightly, on obeying the law. In particular that they should advertise the total price of the items they offer for sale on credit. Some of the more agile members of the furniture store species reacted rapidly, others more slowly. This week two more companies showed signs of evolving. The insert from Game that you’ll probably find in this newspaper now shows the credit price for all items priced over P1,000. If you want to buy anything below P1,000 Game have said they will “will utilize price matrix cards showing typical repayment terms across a range of purchase prices starting at P300”. I think that’s perfectly good enough. Good for Game.

We also met with the new head honcho from Furnmart and HomeCorp. He also has committed these companies to advertising the full credit prices from 1st January next year.

So let’s hope that these two, who have successfully reacted to a bit of external pressure, will continue to be adaptable and will fit even better into their environment.

That just leaves a few companies like Supreme. Do they really want to go the way of the Bali Tiger, the Thylacine and the Dodo and end up extinct?

Another store that might end up with the Dodo is Styles who recently behaved like they don’t want to survive. A consumer contacted us because she’d bought a bed from Styles for over P3,000. Within a month it was creaking and was uneven. After a month of nothing from the store she just took the bed back and demanded a refund. That’s when they showed themselves likely to become a Dodo. After another month the owner finally called and all she got from him was rudeness. That’s when she came to us and we unleashed a predator.

Our predatory mammal got in touch with him, outlined his obligations to the consumer and demanded an explanation or she said she’d bite his head off. His excuse was not “fit”. He’d been busy he said, he’d been travelling a lot and he hadn’t even inspected the bed yet. He also told us that another predator had attacked him. His trading licence had apparently expired so he thought this meant he couldn’t give her a refund. Eventually he responded well to our predatory beast and the customer got her refund but this doesn’t show him as a successful member of his species, does it? Little chance of his genes being passed on I suspect.

If you want your genes to survive, you’ve got to procreate. You have to find a suitable mate with whom you can share your genes and pass them on to another generation. It’s similar in business. If you want your business to survive, it must survive, profit and procreate. The only way to do this is to allow suitable customers to find you and have them mate with you. Lie back and think of your genes. It’s worth it for their sake.

This week’s stars
  • Game Stores for advertising their credit prices clearly and simply.
  • Furnmart and HomeCorp for promising to evolve.

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