Three years ago, Tom Goodwin wrote an interesting book titled, “Digital Darwinism: Survival of the Fittest in the Age of Business Disruption”. A student of the digital impact across industries, Tom coined the now famous quote, “Uber, the world’s largest taxi company, owns no vehicles. Facebook, the world’s most popular media owner, creates no content. Alibaba, the most valuable retailer, has no inventory. And Airbnb, the world’s largest accommodation provider, owns no real estate. Something interesting is happening.” His basic premise is that the internet is the most powerful tool possible to perfectly match people who need something, with people who offer something, and it is shifting the balance of power from corporate scale and efficiency, toward service and brand.
It has been over 150 years since Charles Darwin published his famous thesis, “On The Origin Of Species”. In it, he surmised that survival requires change. Any animal who metaphorically buries his head in the sand refusing to recognize his changing surroundings is doomed to extinction. According to a McKinsey study at the end of last year, “responses to COVID-19 have speeded the adoption of digital technologies by several years–and that many of these changes could be here for the long haul.” The pandemic shifted interaction with customers through digital channels and study participants were three times more likely than before the pandemic to say that at least 80% of their customer interactions were digital in nature. Not only did COVID drive digital interactions with customers, but it dramatically accelerated the creation of digital service offerings. Core internal operations have also gone digital, creating opportunities for companies who provide digital solutions to operational challenges. Companies reported that the changes most likely to stick are a significant increase in remote working, offerings that reflect new health & hygiene sensitivities, and customer preferences for remote interactions.
We may think of evolution as a typically slow path that allows us time to plan and respond. It took a while to build castles in the 11th century to improve local defenses and create leaders who thought of defending their borders. In the 13th century we began to develop markets for trading, where we learned the power of money, and the joy of shopping!
But some historical events drove some pretty quick changes. The Plague in the 14th century killed between 25 and 50 million people in Europe (that’s quite a range, but record keeping was weaker back then), killing about 200 times as many people as World War I. Fewer remaining workers were able to charge more for their labor, turning the old feudal system upside down. Then Columbus landed in America in the 15th century, leading to Spanish being the second most popular language in the world today, and re-evaluating the wisdom of ancient Roman and Greek writers, who were clearly missing a pretty big land mass in their knowledge. The French Revolution in 1789 tested the equality and rights of all men and women, laying the foundation for our more recent momentum for social reform. And when it comes to the communications revolution, the next time you complain about your slow internet connection, consider that on October 21st, 1805, the British Royal Navy successfully defended the highly strategic English Channel from the French and Spanish Navies, but their bosses didn’t hear about it for 16 days.
The point is, things change, and as business owners, we need to watch the signals in our environment.
Darwin carefully observed several species who became proficient at watching the signals in their environment and proposed four keys to the survival of species that apply to each of our businesses today.
First is supercharged instinct. The strongest of animals are highly adept at detecting camouflaged prey. The strongest businesses must constantly read the signals in their environment, including from their direct customers, competitors, as well as market trends. Your Google Analytics account can be a great source of information as part of your analysis, and there are tools like SEMRush you can use to look under the covers of your competitors. Keep your eye on the market and be ready to jump on opportunities. There are several trends to watch since the pandemic including a southern migration of more than just our typical snowbirds, globalization of supply chains creating more trade opportunities, greater eCommerce, working more comfortably online and often at home, which is expected to continue at least as part of a typical work week, opening our eyes to how much as adults we can learn through online education, and an expectation that we can conduct most types of business transactions without needing to touch paper or exchange cash.
Second is migration. Just like many birds fly south for the winter, businesses should look for opportunities to migrate to environments with stronger opportunities, either as a move or expansion. BNI has been very favorable for my business so I expanded into a second chapter. Most businesses today recognize that expanding their operations and services online creates a wonderful opportunity for expansion. My favorite chocolate shop closed up its high rent storefront during COVID in favor of shipping online and offering virtual tasting events. A large fashion brand we’re working with made a quick online pivot when two of their largest retail chains closed down. A healthcare provider client of ours just purchased a second practice to expand into a new area.
Third is the famous Darwinian principle of natural selection. But rather than putting your company in the situation of being naturally selected out of existence, consider using this principle within your company. Allow multiple team members or small teams to work on and propose recommendations to a sticky business or client problem separately and select the one that works best. Don’t put all your eggs in one basket when it comes to a business direction or idea. Have your main cash cow business line, but test others, let some naturally fail while nurturing the ones with the most promise. Now is the perfect time to test a digital model to complement your business. As an example, we’re working with a number of attorneys and other professional services clients who are launching online training and semi-passive income businesses to offer solutions for segments of the market who can’t afford a full done-for-you model but just want some guidance and coaching. And sadly these days, we’re working on business plans for a number of small restaurants with multiple locations and going through the analysis of which one they should keep in order to save their business. Ultimately though, the author Tom Goodwin found the greatest success with companies who adopt a digital first model, with the customer at the center, rather than using digital as a side initiative.
The final principle Darwin proposed is symbiosis. A symbiotic relationship is one in which two or more species who learn to collaborate most effectively are more likely to survive. And that, my friends, is the power of networking where the whole is truly stronger than its parts. A single business owner seeking the best way to emerge from the pandemic may focus inward and find a way to survive, but if she focuses outward and steps up her networking efforts, she is more likely to be exposed to creative ideas to grow her business, strategic connections, and new potential clients. Because as much as the pandemic has accelerated the need to focus on digital technologies, it has also reinforced the need to focus on other humans if we expect to survive.
In the words of Darwin, “a man’s friendships are one of the best measures of his worth.”