Will Evolving Corporate Strategy Be Dar-win-win-ian?
(FORTUNE Magazine) – As pundits of power go, Machiavelli was a prince. Ophthalmologically speaking, Ted Levitt's twenty-twenty vision into marketing myopia was farsighted. Saint Peter of Drucker, arguably this century's most influential management thinker, has probably inspired more effective executives than a Covey of business gurus.
But as the Dells, General Electrics, Coca-Colas, and Amazons look to craft corporate strategies for the next millennium, it's clear whose insights and intellect they'll rely upon to define tomorrow's enterprise: Charles Darwin's. Darwin's disciples--not Peter Drucker's or Adam Smith's or Joseph Schumpeter's--will be setting post-industrial managerial and marketing agendas. A growing community of psychologists, sociologists, anthropologists, and economists are mining Darwin's evolutionary observations in ways that threaten to make much of contemporary managerial and marketing thought either obsolete or extinct. Their work assures that "Darwinian management" will become less a metaphor than a practical methodology. Managers intent on understanding human behavior and organizational hearts of darkness now have little choice but to consider the Darwinian perspective. Psychology? Mistah Freud, he dead. "D-commerce" will be what shapes e-commerce.
Consider a simple marketing gambit based on Frank Sulloway's provocative research on how birth order affects personality. In his Born to Rebel, Sulloway described compelling empirical evidence that first-borns and later-borns behave differently because of their place in the family. His findings argue that first-borns are far more likely to be conservative and authoritarian, while later-borns are likely to be more innovative and receptive to new ideas. He documents this statistically significant influence everywhere, from who supported the French Revolution to which scientists resisted or embraced new paradigms in physics and biology.
Now, if populations of first-borns have fundamentally different predispositions to new ideas than later-borns, that is very useful information indeed. Innovative companies may want to think twice about who their early adopters really are. A Dell or a 3M should probably pitch its latest innovations differently to potential first-born buyers than to later-borns. Any innovation-oriented company not testing this first-born/later-born hypothesis in its own marketing initiatives is doing itself a disservice. Sulloway's Darwin-driven insight gives marketers a powerful way to segment and capture customers.
More recently, psychologist Judith Rich Harris has controversially argued in The Nurture Assumption that a child's peer group has an even bigger influence on personality than parents. The Darwinian dynamics of her analysis underscore what the Nikes and MTVs have been doing right--marketing to youths--and have profound marketing implications for companies that still market kiddie culture to parents. Many aspects of the Harris and Sulloway hypotheses are in conflict: Which matters more, birth order or cohort? But the point is that viewing human relationships through Darwin's prisms of competition and differentiation yields insights for managers bold enough to act on them. Managing people and marketing innovations without knowledge of Darwin would be like balancing the books without knowledge of numbers.
While there are respected academics who dismiss the Darwinians as a bunch of "evo-psychos" whose interpretive claims far outweigh the existing evidence, the thrust of ongoing research should command attention and respect from the business community. For example, cognitive anthropologist Robin Dunbar's work illustrating that the optimal size of effective human tribes--a.k.a. organizations--numbers around 150 raises critical questions about how giant corporations need to manage scale and scope. Virgin entrepreneur Richard Branson independently concluded that it's wise to create a new division when the personnel number in a group approaches that magic 150; British Petroleum's John Browne is breaking once-giant work groups down to more human-scale size; Hewlett-Packard and 3M have long reported that their most productive groups seldom exceeded 200 people. That these numbers seem to transcend industry and culture says something important: our evolutionary past can help us better manage our post-industrial futures.
But it's important to stress that D-commerce doesn't claim that "genetics is destiny." What D-commerce does well is what population biology does so well: predict the likelihood of certain characteristics within populations. To wit, D-commerce isn't about predicting the behavior of a particular first-born; it's about predicting, on average, how a large population of first-borns might respond to a given stimulus.
D-commerce can't yet predict the behavior of particular individuals, but that day will surely come. Scientists are already comfortable attributing certain traits--intelligence, shyness, sociability, to name a few--to genetic influence. D-commerce really starts to get interesting when the same gene-mapping technologies that identify cancer "hot spots" on the genome are used to locate genes that influence behavior. What happens as we discover that certain personality types are predisposed to be influenced by certain advertising messages? Or that there are genetic propensities for risk taking that your financial services adviser should probably be aware of before she recommends a mutual funds portfolio? The "data mining" computers will be working overtime to spot such statistically significant correlates.
While the answers to those specific questions may be difficult, the overarching theme is not: Charles Darwin is destined to be the single most important source of inspiration, insight, and innovation for tomorrow's managers.
MICHAEL SCHRAGE is a Merrill Lynch Forum Innovation Fellow and a research associate with the MIT Media Lab. He may be reached via e-mail at firstname.lastname@example.org.