Strategy as flipping coins?

Shame on my friend Eric Beinhocker of McKinsey Global Institute, interviewed in a TV programme The Genius of Darwin with arch-evolutionist Richard Dawkins.  Eric unfortunately likened the emergence of new business models to a coin-flipping competition, in which entrepreneurs and executives make up new ideas, after which it is just a matter of luck which prosper and which die [implicitly in the natural selection of market competition]. Whereas winners are acclaimed for their brilliance, Eric argued, they were just luckier at coin-flipping!

This is outrageously inaccurate. Try telling Jeff Bezos of Amazon or the Toyota execs who decided to add the Lexus brand and models that it was just ‘lucky’ their ideas worked and you’ll likely get a short and impolite answer. I spent a key part of my professional career with colleagues deliberately designing business models against market changes that were either confidently anticipated or intentionally engineered by ourselves.  Sure, not every one of these succeeded, but a lot more worked than those of our rivals’, as we knew for sure they would.

Darwinism is a very bad metaphor for business competition, for the simple reason that there is deliberate intent on the part of the ‘designers’. It’s as if a gazelle could intentionally give itself a long neck and both out-compete giraffes and still run away from lions – oh yes, and create more tall trees for itself to browse on while it is at it! Furthermore, business model designers have the capacity to carry capability forward to new situations, as serial entrepreneurs and serially successful innovating firms show repeatedly, in an analogy much closer to Lamarckism.

The contribution to Dawkins program was not even helpful – Dawkins was trying to make the case that humanity with its conscious intelligence can mitigate the ‘cruel’ aspects of what would otherwise be social Darwinism [the obscene view that the weak will just go under, and it’s pointless and ultimately bad to try and stop it]. Eric’s description of what looked like social Darwinism amongst businesses actually undermined the point Dawkins was trying to make.

Strategy as coin-flipping might make good TV – shame it’s just rubbish.

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