Management: Success rewards the accident-prone

ACCIDENTS happen. In fact, accidents are what life is about. Ten thousand unpredictable factors spawn a Wal-Mart or an Apple Computer. So hold your applause for the planners: it simply turned out that the companies' schemes suited the market's unanticipated needs at that moment.

Suddenly, new firms build on the Wal-Mart or Apple model - until a new, happy accident occurs. Yesterday's stars, slaves to the rituals that originally made them excellent, have little ability to change; many die or become irrelevant.

Charles Darwin explained all this 134 years ago. His theory of natural selection is crystal-clear: until there's an accident (mutation) no progress occurs. Most accidents/mutations are useless (just as most start-ups fail), but a tiny handful succeed - and are responsible for all progress.

Physics is the managers' favoured metaphor. Newton's sun and planets atomic model is attractive and predictable. Unfortunately, business analysts rarely consider biological models.

For those not schooled in biology, Carl Sagan's and Ann Druyan's book, Shadows of Forgotten Ancestors: A Search for Who We Are, is a superb primer.

Consider five statements from their chapter on DNA, mutation and progress.

1 Active mutators in placid . . . times tend to die off. They are selected against. Reluctant mutators in quickly changing times are also selected against.

Business application: in a calm market, slow-moving, methodical firms will thrive; crazies will perish. If you can count on your next generation of cookies, sweaters or software to last a dozen years, then patiently nurture it. Don't jeopardise a brand by introducing a flurry of line extensions, let alone new categories that might threaten today's winner.

In a turbulent market 'reluctant mutators' - those who are afraid to challenge their current cash cow with, say, an aggressively early release of an adventurous new product - are heading for trouble.

As I see it, business problem No 1 is that too many still follow the reluctant mutator strategy - for example, IBM's futile effort to control its big customers in a computational world gone bonkers.

2 Advantageous mutations occur so rarely that . . . it may be helpful to arrange for an increased mutation rate.

Business lesson: Pursue accidents] The trick for an IBM, Sears or GM is to create a Dell, Gap or Honda in its midst.

Anita Roddick, the Body Shop boss, says she seeks out anarchists, another word for mutators. It's easier said than done. In-house renegades, after a lucky first success, are usually stifled by the company's time-honoured practices.

3 It's as if, for every million dyed-in-the-wool conservative organisms, there's one radical who's out to change things . . . And only one in a million (of the radicals) knows what it's talking about - providing a significantly better survival plan than the one currently fashionable. And yet the evolution of life is determined by these revolutionaries.

Commercial message: I'd rather be secretary to the treasury than a big-company chief executive officer. Life is a numbers game.

As treasury honcho, my primary job is to create a fertile garden that supports enough radicals to up the odds of a successful few (Bob Swanson at Genentech, Bill Gates at Microsoft, Ted Turner at TBS).

The trick is the same for corporate chiefs. Trouble is, they survey smaller fields and are stymied by a uniform culture that stamps out deviants. Fat chance of succeeding]

4 We understand enough about biology . . . to recognise a powerful stochastic component.

Practical translation: Einstein's contrary assertion notwithstanding, God probably did play dice in creating the universe.

You'd better do the same. Chance determines success, and there's only one way to beat the odds: lots of statistically independent tries unconstrained by 'the way we do things here'.

5 Natural selection . . . draws forth a complex set of molecular responses that may superficially look like . . . a master molecular biologist tinkering with the genes; but, in fact, all that is happening is mutation . . . interacting with a changing external environment.

My advice: commit this last statement to memory. If you're the boss, pin it over your planner's desk.

The story is not tidy. But then, neither is life, despite large corporations' continued efforts. It is futile in general - and deadly these days - to try and make it so.

1993 TPG Communications