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Darwin's Medicine blog

Professor Brian D Smith is an authority on the pharmaceutical industry and works at SDA Bocconi University and Hertfordshire Business School.

Edging towards success

Evolution tells us to look for small advantages, not big leaps

In an online Masterclass recently, I was asked what I thought was the biggest single lesson that biomedical companies could learn from biological evolution.

That’s a hard question, because it forces me to choose from many really important learnings that our industry could and should take from Generalised Darwinism, as my field is known.

To be honest, my answer might be any one of half a dozen important lessons and the one I pick depends, in part, on what real-world issue is at the top of my mind at that minute. In this case, for example, I’d just had another conversation with an ambitious senior leader who wanted to make a ‘giant leap forward’ in his business.

As a result of that conversation, the lesson I chose was meant to balance that executive’s aspiration. As ever, let me perambulate around the science on my way to what is a very important practical issue.

Slowly does it

An early argument against Darwinian evolution was that the incremental phenotypic changes caused by small genetic mutations can’t possibly explain the emergence of new species.

The argument goes that a tiny change in, for example, colouring or speed doesn’t make enough difference in survivability for the new variant to out-compete the existing population. By this argument, evolution only works if big leaps occur from one generation to the next.

As is the way of science, there were years of trench warfare about this but eventually, the ‘big leap’ camp and the ‘gradualists’ made a truce. Most evolution occurs very gradually and big leaps are exceptional.

This position is supported by computer modelling, which shows that even the smallest of survival advantages can cause quite rapid shifts in population genetics.

White edges

Does the same observation hold true in the evolution of business models? The business press and airport bookshops are all lovestruck with a few rare examples of giant leaps like Amazon and Zara and, in an abuse of Clayton Christensen’s original work, almost every little change in business practice is now dubbed ‘disruptive’.

But look more closely and you will see that most sustained business success is the aggregation of many small changes that have had a bigger impact than you might expect. In the financial services industry, for example, weaving a small advantageous position from publicly available information is called a ‘white edge’, as distinct from the ‘black edge’ of insider trading.

In any industry, it is ‘white edges’, rather than big leaps, that seem to account for the sustainable growth of successful business models.

These advances are characterised by low-visibility and detailed hard work, so these little steps don’t make such exciting headlines or book covers, but they describe the reality of business success much better than the high profile cases.

Where to look

As I research the success of business models in biomedical markets, I can see emerging examples of ‘white edges’ being won and lost. What I find fascinating is that these examples are scattered all over the value chain in both obvious and less obvious places.

The most obvious examples are the use of data analytics in commercial functions. Companies like Eversana are working with biomedical companies to find ‘white edges’ in information about patients and professionals. Less frequently written about are edges in the supply chain, which companies like Alteryx aim for.

Both companies’ marketing material makes it sound like they enable giant evolutionary leaps. In reality, the more prosaic truth is that they help their clients do the nitty-gritty grunt work. And that is what it takes to create those small but valuable improvements in business effectiveness.

Biomedical edges

What Eversana, Alteryx and similar companies do is often a transplantation of ideas from other industries whose challenges are similar to pharma and medtech.

I’m sure they tailor their approach but they lean heavily on lessons from other sectors. As someone who focuses on our industry, I’m even more interested in companies who enable ‘white edges’ in the parts of the value chain that are uniquely biomedical.

A good example of this is what ColabON is doing in the area of regulatory affairs. The complex and fragmentary nature of the regulatory environment is one of the characteristics of pharma and medtech and faster, better regulatory approval is a uniquely biomedical place to create evolutionary edges.

So, it’s fascinating to see how firms like ColabON are helping companies weave advantage out of what, historically, have been seen as a cost centre rather than a source of competitiveness.

Think small and big

That both biological and business advantage comes mostly from small edges rather than big leaps is very important to how we run our businesses.

It doesn’t mean we should abjure ambition – the big leaps can still matter – but it does mean we should embrace edging.

Small edges may be difficult to find and may perhaps be a little boring. But they make a big difference. And that’s the biggest lesson biology has for business.

Professor Brian D Smith works at SDA Bocconi and the University of Hertfordshire. He is a world-recognised authority on the evolution of the life sciences industry and welcomes questions at brian.smith@pragmedic.com

17th March 2021

From: Research, Marketing

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