Revolution or evolution: What would Darwin say about the social enterprise?by
28th Nov 2011
Many enterprise technologies claim to be revolutionary. But is that really the best way to institute organisational change? David Lavenda explores.
In business, a revolutionary approach that promises rapid change over a relatively short period of time is often alluring. Especially when compared to the rather mundane alternative of slowly evolving processes. Yet, the promise of fast improvements and the reality are often poles apart. So, what is the most effective way to introduce change to the organisation?
Unfortunately, there is a sad reality that all too often IT projects don’t deliver on their promise – whether it is to automate production, scale fulfilment or enable collaboration. With the failure rate of large projects reported as being between 50% - 80%, even at the lowest percentage it still means half of all technology investments will miss their mark.
Here are just three examples illustrating the point:
- After Roger Smith was appointed its CEO, General Motors (GM) entered into a joint venture with Japan’s robot designer Fujitsu-Fanuc to deploy 14,000 new robots in GM plants by 1990. Costing billions of dollars, the robots never really worked and, instead of increasing productivity, actually lowered it. A nearby Mazda plant produced just as many vehicles, with 1,500 fewer employees. Meanwhile, Toyota delivered low cost, high quality vehicles using comparatively low tech 'lean production' techniques. As one GM finance executive later noted, the company could have bought both Toyota and Nissan for the money invested in the failed robot technology, a point especially painful given GM’s troubles and Toyota and Nissan’s success today.
- US wholesale drug distributor Foxmeyer owed its downfall to a highly ambitious project to revamp both its IT systems and Ohio-based distribution centre. The $5 billion company estimated huge efficiency gains from the new systems – so much so that it started to bid future contracts based on expected cost reductions that never materialised. In fact, the IT systems failed to deliver, and the company never recovered. After filing for bankruptcy, the main operating division was sold to its larger rival, McKesson, for a mere $80 million.
- In 1993, athletic shoe, clothing and accessory maker adidas set out to change the warehouse management system in its Spartanburg, SC, distribution centre. The project had a number of issues and, in hindsight, perhaps adidas went live before the system was really ready – we’ll never know. What we do know is the results were catastrophic with the company only able to fill 20% of its $50 million North American orders, and much of that came from overseas plants shipping direct. As a result, adidas suffered major market share losses that persisted for a long while, while IT and logistics staff left the company in droves.
What do these IT failures have in common?
In my opinion, each introduces dramatic, revolutionary changes to their organisations when a more evolutionary approach would have worked better.
A steady process
Evolution isn’t a series of radical steps imposed on a population. It’s a steady process in which organisms that are best able to adapt to changing environments are most likely to survive and reproduce, passing along their adaptations to their offspring.
The consequence is what Darwin describes in his book, 'On the Origin of Species', as natural selection - a struggle for existence where the ‘weakest’ are eliminated and only the fit survive. The fittest are not necessarily the strongest or most intelligent of the species. Much like the pale, speckled peppered moth that turned black during the industrial revolution, the fittest are the species most adaptable to change.
This is equally true for businesses.
My definition of the fittest businesses isn’t the biggest organisations or the ones with the most leverage. Rather, they are best able to adapt to changing conditions – be they economic, technological, or even attitudinal changes. Smaller, nimble players that are able to marshal their collective intelligence have just as much, if not a better opportunity to thrive.
Independent retailers like Godiva Chocolates cannot hope to compete head-to-head with a giant like Cadbury. But by examining what they do well, opening a direct channel of communication with customers to understand changing attitudes and behaviours, and specialising in a particular area, they can carve a niche for themselves and continue to co-exist alongside Goliath.
Darwin sums it up nicely saying, "In the long history of humankind (and animal kind, too) those who learned to collaborate and improvise most effectively have prevailed."
Nature and nurture
There are two elements that conspire and affect a species’ ability to adapt - nature and nurture.
Nature endows us with inborn abilities and traits while nurture takes these genetic tendencies and moulds them as we learn and mature. Put simply, nature is the company’s DNA – its established work culture, human capital and IT infrastructure. Nurture is the equivalent of the external forces it has to deal with or pressures the company faces – those applied by competitors, economic or regulatory changes, and even major IT innovations.
In my experience, revolutionary IT changes tend to fail for the same reason: organisations buy into new, seemingly better ideas and processes, and they may even get enthusiastic co-operation from the tech savvy elite. However, when they try to force the majority to change their work habits by shocking them with a rip-and-replace IT strategy, they meet resistance. Just like it’s hard to fight nature - be it Mother Nature or human nature - it is virtually impossible to force radical change on the masses.
On the other hand, businesses that mirror how our young are nurtured, by taking existing working practices and evolving them with technologies, can get their workforce to adopt new ways of working together. For example, integrating new collaboration and communication tools such as social email and smart phones into a familiar IT environment makes users feel more comfortable and helps them embrace these new practices.
Since Darwin’s day, collaboration strategies, technologies, and skill sets have undergone dramatic changes. However, I would hypothesise that taking an evolutionary approach, rather than forcing revolutionary change, has the greatest potential to create a more collaborative, social enterprise.
David Lavenda is VP of product strategy at harmon.ie.