April 3, 2012
Strategy and the Giant Squid
Recently I was watching a documentary on nature that featured the Giant Squid, and I came to two conclusions:
1) The giant squid is an unbelievable marvel of evolution; and,
2) There are uncanny parallels between evolution in nature and the development and execution of business strategy.
Business people have borrowed language right out of science textbooks and made it our own. The documentary discussed how through the process of evolution, the Giant Squid became highly specialized for its environment. The documentary also took us through the stages of growth in the Giant Squid’s lifecycle. These words – evolution, specialized, growth, lifecycle, and environment – are all commonly used in boardrooms and business textbooks across the world. After a quick Google search of each word I found that there is a “biological” and a “business” definition of each – with very similar meanings I might add.
Science would say that the Giant Squid’s development was guided by Darwin’s theory of natural selection, which led to the development of its powerful beak, changing skin colour, jet propulsion system, and sophisticated nervous system. In other words, the Giant Squid developed specialized characteristics over time that allowed it to be successful in its external environment. Without realizing it, the Giant Squid was constantly assessing its external environment, developing a strategy to evolve in a way that would enable survival, and executing this strategy by making physical changes to itself over time. Of course, this evolutionary process took a few thousand years or so.
Fortunately, as humans, we can be a lot more deliberate in developing and executing business strategies (luckily for us, our nervous systems are even more evolved than that of the Giant Squid.) Meaning we don’t need thousands of years. Just like the Giant Squid, companies must constantly assess the external environment in which they operate, and develop strategies that will enable them to reach their goals within it. However, just like the time-constraints faced by the Giant Squid, there are constraints that companies must balance too.
Companies must balance between what management wants to do, what the organization can do, and what the external environment needs. I.e. When developing business strategies, management must take into account what the company is capable of doing internally, as well as what the external environment dictates is possible. The strategic tension caused by these three factors needs to be balanced or the strategies will be difficult to execute.
There are many examples in nature and business that demonstrate the impact of getting strategy development and execution very right, or very wrong.
Zoom Airlines – a Canadian low-fare transatlantic airline with a sister company in the United Kingdom – was founded by a successful tour company operator from the UK. The airline adopted a strategy of “direct-selling”, whereby they reduced the number of companies in the supply chain (i.e. “cut out the middle-man”), and passed the savings on to customers in the way of reduced fares. This strategy had led the founders to great success in their previous travel companies; however, it was met with difficulty at Zoom Airlines. They built up debt and failed to pay creditors which led to an aircraft being impounded in Halifax, and others being denied fuel in Calgary. Passengers were stranded in both cities. Searching for the airline on travel websites today will result in the line: “Zoom Airlines ceased operations on August 28, 2008.”
In nature, the Passenger Pigeon failed to evolve to its changing surroundings quickly enough, and by 1914 the Passenger Pigeon was extinct. A bird that once existed in massive populations was pushed out of existence by changes to its landscape brought about by humans.
While neither Zoom Airlines nor the Passenger Pigeon continues to fly today, many of their counterparts continue to thrive. There are still many species of birds and plenty of airlines that are taking-to-the-skies daily – so what did these successful species and companies do differently? Darwin’s answer would be simple – survival of the fittest. But perhaps for us humans it’s a bit more complex than that.
When it comes to the development and execution of business strategy, consider the impact, and be deliberate. Would you rather your company be a Giant Squid or a Passenger Pigeon?
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