Invasive Species, Natures Disruptive Innovators
Today, March 29th 2010, sees the online publication in Businessweek.com of my article on Invasive Species and Disruptive Innovation, reproduced below. I welcome any comments on it that you might have.
Invasive species are most commonly portrayed as destructive pests that threaten native species, ecosystems and economies and that must be controlled and/or eradicated.
This portrayal is not very surprising, given that their worldwide economic impact was estimated at $1.4 trillion in 2002 (source: Pimental, 2002), equivalent to China’s 2003 GDP. They’re often spread, intentionally and unintentionally, by human trade, travel and tourism and, with the estimated rise in cross border global transactions from $10 trillion in 2007 to $70 trillion by 2025, they will inevitably become an increasingly common problem.
But viewed from a different perspective, the facts tell a story of adaptability, persistence, and transformational impact. Invasive species endure long and hard journeys, fight for survival in hostile and unfamiliar conditions, and succeed in establishing widespread, flourishing populations, beating out their competitors in the process.
They are, in short, the disruptive innovators of the natural world. And it turns out that many of them have a similar invasion lifecycle. I believe that this lifecycle is also common to disruptive innovators in human endeavours, from business to science to the arts. In this Businessweek.com article I have concentrated on similarities between natural and business "invaders". Given size constraints I have had to keep my arguments and examples to the bare minimum and have had to whittle them down to a fifth of my original paper's size. Over the course of the next few months I intend to post more details of my theory on this blog, extending some of the more applicable parts of the theory such as density and innovation, the outsider's perspective, and the invasion lag phase.
The Businessweek article:
From the Asian carp to the zebra mussel, invasive species are a major force of change in nature. They radically alter the ecosystems they invade, seizing control of important resources from established native species and creating new opportunities for themselves and for others who can adapt quickly enough to exploit them. They are, in other words, the very model of disruptive innovation and they share certain characteristics that can be used by executives to think newly about their approach to innovation across all areas of their business.
#1: Start small
Most non-native species arrive on foreign shores in small numbers. Few survive, but those that do and go on to become invasive tend to exploit their smallness. It allows them to survive in uncertain circumstances for longer with fewer resources and to keep out of sight of competitors, predators and parasites until they’ve learned how to succeed.
Acting small provides these same benefits to business innovators. In addition, thinking small will allow you to see market opportunities that large companies typically overlook. Curves, the world’s largest health and fitness franchise, can operate in spaces as small as 1,000 square feet with as few as 150 members to be profitable in some markets, which means that they can serve small, previously overlooked communities.
#2: Speed up your cycles to get to resources earlier
Invasive species develop earlier and shorter reproductive cycles that allow them to get to precious energy sources earlier than their native competitors.
In business, there are significant opportunities for companies who can sync their cycles to the needs of their customers rather than to those of internal planning and reporting. In the retail fashion industry, Zara has reduced design-to-store time from an industry norm of six-to-nine months to two-to-four weeks. Once in the store, the clothing lines stay there for no longer than four weeks, which causes Zara’s customers in its native Spain to visit the stores up to 17 times a year, compared to an industry average of three times. In 2008 Zara’s parent company Inditex Group overtook its main U.S. rival Gap to become the world’s largest clothing retailer.
#3: Embrace disturbed environments and tumultuous times
Invasive species tend to find significant opportunities for success in environments that are prone to being flooded, burned, built upon, deforested, polluted or in any other way altered. Many invasive weeds flourish along road sides and railway lines, river banks, agricultural land and on the edges of forests.
We are in the grip of our own tumult. The current recession and its accompanying crises in health care, real estate, the financial markets (which saw the extinction of the Investment Bank sub-species) and other industries nevertheless represents huge opportunities for innovation across the board. All the same conditions that cause most organizations to hunker down will be exploited by the next generation of leaders.
There is growing evidence that hybridization between non-natives and native species among animals, plants and microbes can give rise to invasiveness. The advantage of hybridization is clearly the combination of the characteristics of the native species that have allowed them to adapt to their current environment with those of the non-native species that have predisposed them to succeed in unfamiliar ones.
Once it had hybridized with Best Buy in October 2002 and became accessible to a mass customer base, Geeksquad grew from 50 employees with $3 million in revenues to 12,000 employees and $1 billion in revenues in only five years. For its part, Best Buy admirably demonstrated the virtue of thinking small (#1 above). Most $20 billion companies, as it was at that time, don’t even see companies that much smaller than themselves, but the acquisition gave the company a customer service innovation and a way of gaining access into people’s homes that drove another nail into Circuit City’s coffin.
#5: Exploit under-utilized resources
Established species in any given ecosystem usually compete for the most accessible and the most abundant resources. Would-be invaders are therefore often forced to take advantage of the resources that the incumbents have ignored or rejected. If they are successful in doing so they find that they have no competitors, at least for a while, and so can succeed in their new surroundings.
Some innovators have focused on under-valued customer segments and other sources of revenues. Enterprise targeted the occasional renter rather than the business traveler, their home rather than the airport, and the insurance company rather than the corporate expense account. In doing so it left Avis, Hertz and others to fight it out for the same customers and became bigger than any of them in the process.
#6: Be a serial invader
Invasive species aren’t invasive forever. Sooner or later they attract predators, competitors, parasites, diseases and imitators, and eventually, they become an established part of an ecosystem.
When this happens, it’s time to go in search of new challenges. Over 40 years ago a young British entrepreneur named his company Virgin to denote his inexperience and “outsiderness”. Since then Sir Richard Branson has continued to enter and transform industry after industry and has most recently positioned Virgin Galactic to be the first commercial spaceline. If all goes well he might even become the first true space invader.
I am always on the look out for more business examples of invasiveness as I hope to deepen and improve the theory. I welcome all comments and suggestions.