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1
The
Universe Is Run by Selection
If
I could give an award for the best idea ever I would give it to Darwin,
because his idea unites in a stroke these two completely disparate worlds,
until then, of the meaningless mechanical physical sciences, astronomy,
physics and chemistry on the one side, and the world of meaning, culture,
art and biology.
--
daniel dennett
Evolution
by Natural Selection
In
the material world, nothing is more important than evolution by natural
selection. Without natural selection, our species could not exist. If
selection did not apply to ideas, technologies, markets, companies, teams,
and products in precisely the same way as it applies to species, we would
all be working on the land struggling to avoid malnutrition and famine.
Selection drives all material progress.
The
Origins of Darwinism
In
the 1830s, both during his long trip around the world and when back in
England, Darwin observed the behavior of animals that favored the survival
of themselves and their offspring. For example, when in the Gal?pagos
archipelago in the South Pacific in 1835, Darwin noted that a certain
white bird would calmly sit by while the first of its hatchlings killed
the second. Why did the bird not intervene--or, if she wanted only one
hatchling, why bother to lay more than one egg? Repeated observation gave
Darwin the answer: he determined that a single egg gave only a 50 percent
survival rate (survival being defined as that of at least one hatchling),
that two eggs raised the survival rate to 70 percent, but that three eggs
brought the survival rate below 50 percent. Further, if there were two
live hatchlings, the probability of one of them surviving was lower than
if there was only one hatchling. Hence the mother's apparently perverse
behavior was actually conducive to the survival of her family.
Darwin
combined observations from his field research with two ideas that had
been around for many decades in different academic disciplines, and fused
them together with explosive effect. The two ideas were competition and
evolution. Darwin first thought of natural selection in 1838 while reading
Thomas Robert Malthus's Essay
on Population, a dire prophecy of the effects of competition between
individuals for food. Malthus in turn had been influenced by Adam Smith's
theories of economic competition in The
Wealth of Nations, the first volume of which had been published
in 1776. Smith's thinking had been influenced by a writer another century
or so earlier, namely the political philosopher Thomas Hobbes, who had
in 1651 described society as "the war of all against all."1 This means
the idea of competition was common currency among intellectuals almost
two hundred years before Darwin published On
the Origin of Species by Means of Natural Selection; or, the Preservation
of Favoured Races in the Struggle for Life.
Evolution
had also been widely discussed in the early nineteenth century. Fossils
showed that species had evolved from earlier, more primitive species.
K. E. von Baer (1792-1876) revealed a major key to the process when he
stated that "less general characters are developed from the most general,
until the most specialised appear."2 Evolutionists talked about "heterogeneity
emerging from homogeneity."3 What no one before Darwin had explained satisfactorily
was how evolution worked.
Natural
Selection
Darwin's
theory of natural selection is elegant and extremely economical, resting
on three plain observations.
First,
creatures systematically overproduce their young. "There is no exception
to the rule," Darwin states, "that every organic being naturally increases
at so high a rate, that if not destroyed, the earth would soon be covered
by the progeny of a single pair." He observes that cod produce millions
of eggs. If they all survived, the oceans would be solid cod within six
months. Elephants are the slowest breeders of all known animals, yet within
five centuries, if unchecked, "there would be alive fifteen million elephants,
descended from the first pair." Survival is a numbers game, with the odds
stacked against most creatures. "A struggle for existence," Darwin concludes,
"inevitably follows from the high rate at which all organic beings tend
to increase."
Second,
all creatures vary. We are all unique.
Third,
the sum of that variation is inherited. We are more like our parents than
we are like other people's parents.
Darwin
put these three obvious facts together to derive the rudiments of natural
selection. Competition among siblings means that only a few can survive.
As Darwin wrote with feeling in On the Origin:
.
. . all organic beings are exposed to severe competition . . . Nothing
is easier to admit in words the truth of the universal struggle for life,
or more difficult -- at least I have found it so -- than constantly to
bear this conclusion in mind. Yet unless it be thoroughly engrained in
the mind, I am convinced that the whole economy of nature, with every
fact on distribution, rarity, abundance, extinction, and variation, will
be dimly seen or quite misunderstood.4
Which
individual plants and animals will survive? Clearly, those that exploit
or fit in best with what Darwin called "the conditions of life." Darwin
coined the phrase "natural selection" as the "preservation of favourable
variations and the rejection of injurious variations." This means plants
and animals that have been naturally selected will have had the most successful
parents--those who in turn had survived and came from a long line of survivors--and
in turn will have more offspring than other organisms. So in each generation
there is improvement, driven by the natural selection of the survivors
and by the relative reproductive success in that generation of the survivors:
"The slightest advantage in one being . . . over those with which it comes
into competition, or better adaptation in however slight a degree to the
surrounding physical conditions, will turn the balance."5
Darwin
keeps hammering home his point that natural selection depends on variation.
When the "conditions of life," such as climate, change, he says: ". .
. this would manifestly be favourable to natural selection, by giving
a better chance of profitable variations occurring; and unless profitable
variations do occur, natural selection can do nothing."6
For
most of Darwin's contemporaries, the really controversial aspect of On
the Origin was not the original part -- natural selection -- but rather
the support that Darwin gave to the general idea of evolution, and especially
humanity's descent from animal species. But although he collected (rather
inconclusive) data between 1838 and 1859, his main contribution was the
flash of insight that he had in 1838: that there was competition for life
between individuals and that traits were conserved through their relative
adaptability to life's conditions.
The
process is thus very simple: variation, then selection, then further variation.
Then more variation, more selection, more variation. And so on back to
the start of life and forward to eternity. This is how species evolve.
Variation
Leads to "Better Adaption"
Intrinsic
to improved congruence with the conditions of life, therefore, is variation.
If there were no differences between parents, there would be no differences
between offspring. If there were no differences, even between the offspring
of the same parents, there would be no basis for differential success.
And success means fitting the "conditions of life." There will thus be
a continual process of improvement or better adaptation to the environment.
Although, of course, the environment may change, producing different winners
and losers.
Variations
and improvements occur continually within species, but occasionally a
mutation occurs when an individual has a new characteristic. This mutation
may improve or worsen the odds of survival. If the latter, the mutation
will die out. If the former, the individual mutant will prosper and leave
plenty of offspring, who will inherit and pass on the advantage.
Over
time, therefore, most species will evolve positively. And they will respond
to any change that the environment brings. When conditions change, new
characteristics are required -- and encouraged.
Diversity
Leads to Efficient Use of Resources
Darwin
suggested that the more species there were on a piece of land, the more
efficiently the land would be used. A number of recent experiments have
confirmed his hypothesis. Research reported in 1984 on 147 plots of Minnesota
prairie, for example, demonstrated that the greater the number of species
in a plot, the more biomass the plot produced and also the more nitrogen
the soil produced; with fewer species, nitrogen leached out of the soil
and was wasted.7
What
does this prove? That if a species is diverse, it can survive and prosper;
if a species is homogeneous, it is vulnerable.
In
the Pacific Northwest of the United States, where wild salmon were disappearing,
scientists bred huge numbers of hatchery salmon and dumped them into the
rivers. But these hatchery salmon had little diversity. They were vulnerable
to a slight change in the ecosystem. Too many riverside trees had been
cut down for logs. Result: less shade and therefore a slight rise in river
temperatures. Further result: an increase in certain diseases that couldn't
flourish in colder water. Final result: the hatchery salmon nearly all
died from disease. On reflection, the scientists realized that lack of
diversity was the root problem -- had the salmon been gradually interbred,
allowing mixing and mutation, a diverse adult population would have contained
some salmon resistant to the new diseases.
The
same applies to computers. More than nine out of ten computers today have
the Windows operating system. These computers have the same core internal
components. And every computer with Microsoft software is vulnerable to
the same computer viruses. Early in 2000, a hacker took advantage of this
vulnerability by releasing a virus disguised in the message "I love you,"
which infected computers worldwide and disrupted thousands of e-mail systems
from private homes to the Pentagon. The "Love Bug" virus drew strength
from the homogeneity of software.
It's
not fanciful to see the same process at work in cities. In the 1950s and
1960s, town councils and private developers alike, both in America and
Europe, built massive tower blocks, all the same shape and pattern --
oblong, high, undifferentiated. Like Malvina Reynold's "Little Boxes,"
"they're all made out of ticky-tacky and they all look just the same."
Result: misery, alienation, crime. In her fascinating book, The
Death and Life of Great American Cities, Jane Jacobs shows that
when street lengths, building shapes, sizes, ages, and areas within cities
are more diverse, then the cities are not only more beautiful, but also
more energetic and wealthier.
Diversity,
therefore, always leads to even greater diversity, and to sustainable
growth. If we want to sum up the theory of evolution by natural selection
in two words, which have great relevance for all societies and businesses,
we should simply remember: diversity works.
Does
Evolution Imply Progress?
According
to Darwin, competition and blind chance drive improvement.
The
inhabitants of each successive period in the world's history have beaten
their predecessors in the race for life, and are, in so far, higher in
the scale of nature; and this may account for that vague and yet ill-defined
sentiment, felt by many palaeontologists, that organisation on the whole
has progressed . . . old forms having been supplanted by new and improved
forms of life, produced by the laws of variation acting round us, and
preserved by Natural Selection.8
Modern
biologists are usually extremely careful to stress that there is no implicit
evolutionary process leading naturally to improvement; evolution, to scientists,
does not imply any imminent purpose or historical progress. Organisms
adapt themselves to the conditions of life, but the fact that "better
adapted" organisms thrive at the expense of the "less adapted" implies
no value judgment: better means more likely to survive and multiply, not
superior.
Six
Universal Principles Implied by Evolution by Natural Selection
Jane
Jacobs9 identifies three themes that were common to all the "evolutionists"
of the nineteenth century:
*
Differentiation emerges from generality. One original species leads to
all others. New species are formed from an existing species. This is a
universal principle: in knowledge, one branch gives rise to one or more
new branches through specialization; in the economy, the same thing happens
when one industry gives rise to more specialized branches thereof, or
when one firm spawns spin-offs, each of which develops its own particular
variations. Variation is the key to development.
*
Differentiations become generalities from which further differentiations
emerge. In other words, variation never stops and inevitably gives birth
to increasing complexity and diversity.
*
Development depends on codevelopment. "All forms of life," said Darwin,
acutely aware of nature's web of interdependent species, "make together
one grand system." Jane Jacobs's The
Nature of Economies provides a perfect illustration of this:
A
horse requires more than its ancestors. A horse implies grass. Grass implies
topsoil. Topsoil implies breakup of rocks, development of lichens, worms,
beetles, compost-making bacteria, animal droppings -- no end of other
evolution and lineages besides that of the horse.10
Does
this theory apply only to organic species? Absolutely not. Today's global
economy, as we'll explore later in greater detail, demonstrates the same
pattern of codevelopment and intricate interdependence.
In
addition to these three evolutionary themes, Darwin's theory of natural
selection contains another three crucial twists:
*
The odds against survival are high, leading to a struggle for life. In
nature, in ideas, and in economies, so much is produced that only a small
fraction can survive. Failure is the normal condition. This implies that
only organisms producing many offspring and generating a stream of new
variants can hope to beat the odds.
*
The conditions of life determine whether species and individuals survive
or not. In contrast to the French naturalist Jean
Lamarck (1744-1829), who claimed that species adapted to the demands
of the environment, Darwin held that the environment was the determining
factor. In Lamarck's opinion, species evolve to survive; Darwin argued
that species naturally evolve, and the environment decides whether or
not they survive.
This
may sound a subtle distinction, but it is crucial. Darwin implies that
species, and to an even greater degree individuals, cannot hope to control
their own destiny. This is a key insight that can be applied to business,
and in life. If a business or a career is failing, there are only two
remedies: change the environment or change the character of the business
or the individual.
In
evolution by natural selection, the environment is more powerful than
the species, and the species is more important than the individual. In
economic development, the market is more important than any particular
industry, and the "species" of producers or consumers is more important
than any individual firm or consumer. It follows that if any business
enterprise or individual is not succeeding, a radical change of environment
or behavior is necessary.
*
The process of natural selection contains high degrees of luck, randomness,
and arbitrary development. Natural selection is a process of experimentation
in which luck is paramount. So is business.
Darwin
and Business
According
to Bruce Henderson, the founder of the Boston Consulting Group, "Darwin
is a better guide to competition than economists."11 This is an important
observation, although perhaps hardly surprising: Darwin's idea of natural
selection was, as we have said, in part analogous to the theories of competition
of Thomas Malthus and Adam Smith. So, in applying the lessons of natural
selection to business, we are in a sense coming home to a common intellectual
heritage.
1 Thomas
Hobbes (1651; 1973) Leviathan, J. M. Dent and Sons, London.
2 Quoted
in Jane Jacobs (2000) The Nature of Economies, The Modern Library,
New York.
3 See
Stephen Jay Gould (1977) Ontogeny and Phylogeny, Belknap/Harvard,
Cambridge, MA.
4 Charles
Darwin (1859) On the Origin of Species by Means of Natural Selection,
John Murray, London, Chapter III. My quotations are from the 1985 edition
from Penguin, London, edited by J. W. Burrow: see pp. 115ff.
5 Ibid.
6 Ibid.
7 See
Adrian Forsyth and Ken Miyata (1984) Tropical Nature, Macmillan,
New York.
8 Charles
Darwin, op. cit., Chapter X, p. 342.
9 See
Jane Jacobs (2000) The Nature of Economies, Random House, New York.
This is an excellent short study expressed in didactic dialogue, and I
have drawn on many of its themes.
10 Jane
Jacobs (2000) The Nature of Economies, The Modern Library, New
York. 11 Carl W. Stern and George Stalk, Jr. (1998) Perspectives on Strategy
from the Boston Consulting Group, John Wiley & Sons, New York.
Excerpted
from The Natural Laws of Business by Richard Koch Copyright 2001
by Richard Koch. Excerpted by permission of Currency, a division of Random
House, Inc. All rights reserved. No part of this excerpt may be reproduced
or reprinted without permission in writing from the publisher.
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