Achieving sustainable success by thinking about company as ecosystem

Achieving sustainable success by thinking about company as ecosystem: lessons for innovation, growth, and renewal.

Extract from strategy + business – David K. Hurst:

Applying an ecological perspective to business yields some interesting insights about how to achieve sustainable success.

– Don’t think of organizations just as structures; also think of them as movements. Organizations are conceived in passion and born in communities of trust. They grow through the application of reason and mature in power. Today Walmart looks like a huge monolithic structure, but it began life as a movement, fueled by the convictions of Sam Walton and his vision of service to a community.

– Realize that change is inevitable: The only real choice is whether you will seek to anticipate it or have it thrust upon you and be forced to respond without the benefit of forethought. Ecosystems need regular disruption to create the open patches necessary for renewal. The use of prescribed burns to renew forests and the release of spring “pulses” of water from dams to renew rivers are excellent examples of proactive interventions in the management of natural systems.

– Pursue change on the edges of systems and in open patches, where variety can flourish on a small scale and without competition. Know that, conversely, change in the core is difficult because there is fierce competition for resources.

– Remember that the fruits of success always contain the seeds of destruction: Success tends to perpetuate itself, leading to the growth of large, slow-moving systems and homogeneity, which then leads to a lack of resilience and vulnerability to catastrophic change.

– Creation requires destruction: Look for openings on disturbed ground — turbulent markets where information is scarce and navigation is unclear. What economists call market failures, entrepreneurs call opportunities.

The destructive close of a mature forest’s cycle demonstrates this last point. In the lodgepole pine forests of the Western mountain ranges in North America, fire ends the climax phase. The lodgepole is a self-pruner: As it ages, it drops its lower branches on the ground. Older trees also become vulnerable to attack by bugs, and are turned into standing firewood. As the fuel builds and the forest becomes more tightly connected, fire becomes inevitable, culminating in conflagrations like the massive Yellowstone fires of 1988.

But forests need fire. Fire tests the system and breaks down the tall hierarchies (old trees) that monopolize the resources, recycling them into nutrients. Indeed, fire marks the completion of one cycle for the forest. It creates the open patches that attract the entrepreneurs. It makes way for variety to reenter the system, both in the form of the seeds and weeds and in the creation of multi-aged stands of the dominant species. Such an ecosystem is once again loosely connected because resources can flow through it in many ways. It is no longer vulnerable to being wiped out by a single event, and the perpetual cycle of forest succession begins again.

The Western world, led by the United States, is going through a testing time. We often hear talk of “creative destruction,” but without an appreciation of how the process actually works. Our response to today’s challenges will determine whether we can renew ourselves and create a sustainable future or whether we will go into a long decline. We could do much worse than to take our cues to action from nature itself.

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