Ideas for Leaders #047

Leveraging DNA to Survive in Hostile Business Environments

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Key Concept

Developing strategies and capabilities to cope in hostile business environments is a must for today’s managers. In this way, nature and the animal kingdom offer a number of solutions. The coping strategies of animals like lions, seagulls, sharks and bears have evolved over billions of years and can be adopted by managers too; these can be summarized as fight, flight, search and sleep, and are discussed further in this Idea. 

Idea Summary

Rather than develop strategies for coping with future challenges, managers often blame market turbulence or unexpected events when a crisis occurs. This “corporate déjà vu” takes place in many organizations. How can companies avoid the blame game and instead manage better in hostile environments? Could the solution lie in genetic codes found in nature?

Hostile environments - defined by natural scientists as a set of unstable external conditions - have become a clarion call for business. Even without the threat or likelihood of corporate failure, the challenges of senior managers increase exponentially as they strive to lead their companies in business environments characterized by instability. These are the kind of environments that many versions of can be found in nature too. So how do animals deal with them and what insight can such an analysis provide for business managers?

As the coping instincts of animals have evolved over billions of years, managers can learn from them which genes, or capabilities, they need to “switch on” and which they need to “switch off.”

One of the researchers, Dr Tazeeb Rajwani, points out that it is too easy to blame market turbulence or unexpected events for a company’s poor performance but this is often the response of managers to circumstances beyond their control. These findings, however, identify four basic coping capabilities and survival strategies that businesses can develop to survive and thrive in unpredictable environments.

Business Application

The four capabilities-based practices for ensuring strategic fit can be summarized as fight, flight, search and sleep:

  • Build a fighting capability - attack an obvious source of hostility: lions illustrate the distinct survival instincts to master the harsh hostility of their environments. When faced with specific threats from other dominant animals, they become alert and are able to attack swiftly and with forceful strikes using multiple adaptations. Typically organizations that follow lion strategies take a proactive role in going after new customers and may adopt direct and forceful approaches in doing so. To see a lion strategy applied to organizations, we have only to look at Google’s attacks on Microsoft for existing markets in word processing and spreadsheet applications, and trumping them in new markets such as cloud computing.
  • Embracing flight capabilities - move quickly away from hostile environments: seagulls are capable of thriving in many different environments and can move rapidly to avoid specific threats to their survival. Companies pursuing a seagull strategy have the agility to move rapidly to avoid threats, coupled with a capability to survive and thrive in differing environments. Similar to seagulls, some companies are able to swiftly exit declining markets and rapidly exploit emerging markets.
  • Developing search capabilities - continuously looking for opportunities and threats: sharks epitomize endurance and serves here as an illustration of organizational search capability. Knowing instinctively how to bear prolonged hardship and survive, they have staying power and know instinctively when and how to surge to reclaim territory. To see shark strategy in action we can look at The Coca-Cola Company after 2004, following the period of strategic drift. Today, after showing persistence and stamina, the corporation has recaptured territory lost to an assortment of smaller companies and especially to its archrival, PepsiCo.
  • Embracing hibernation capabilities - displaying a capacity to conserve energy: animals such as bears prepare to spend time in their winter quarters, with significantly reduced energy and activity levels. In doing so, they spend the critical months of general weather hostility more or less asleep in a safe domicile, waiting for spring. In periods of relative rest, organizations can focus on repair, maintenance, improvement and preparation. Honda is a case in point; when it unexpectedly accumulated stock, the company quickly moved into a hibernation strategy and lowered its activity level, without ending or severing relationships core to the business.
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Authors

Institutions

Source

Idea conceived

  • 2012

Idea posted

  • January 2013

DOI number

10.13007/047

Subject

Real Time Analytics