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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.

Holistic Excellence

Why is it so hard to make your team or company excellent? Ask your Jeremiah

When I work with companies to help them develop their competitive capabilities, I often come across ‘the company Jeremiah’, someone who is deeply sceptical about whether it’s even worth trying because change is so difficult and so rarely works. You might think, in my position, that these Doubting Thomases would be a problem for me but in fact I see them as the key to success. Stick with me and I’ll explain why.

Jeremiah’s truth
Jeremiahs are usually right. Change management programmes have a poor record. Training manuals often gather dust on shelves. Organisational development models rarely achieve their goals. When, as recently, they are repackaged as ‘agile’ or ‘design thinking’, the new jargon raises hopes that aren’t fulfilled. Jeremiahs are right about this. What they’re wrong about is that we shouldn’t bother trying. When your business environment changes, adaptation becomes essential even and perhaps especially when it’s failed before. So I rarely doubt or challenge these corporate doom- mongers. Instead, they inspire me to look at their experiences in a different way and ask why change has failed in the past. And as usual with my work, I take my cue from the parallels between organisations and organisms.

Polygenicity
Since Darwin first gave us the idea of evolution by natural selection, we’ve learned a lot about how species change and how they don’t. We now know that when one species evolves into another, it’s because its genome has changed, causing its phenotype to change. When this genetic view of evolution first emerged, many scientists began looking for ‘the gene for...’. There was an assumption that any heritable trait was due to differences in one or a small number of genes.

In the decades before and since the millennium, a lot of scientific energy has been expended on looking for the genes for intelligence, for example, but without success. Gradually and painfully we learned that very few things can be attributed exclusively to single genes. The large majority of traits seem to be the result of the accumulation of many small effects from a large number of genes. Today, genetic health experts are less likely to talk about ‘the gene for...’ and more likely to talk about your polygenic score or genome-wide score, the aggregate effect of your many genetic variants. That new knowledge has dashed the hopes of those who had ideas of genetically engineering humans with particular physical or psychological characteristics.

As readers of my work will know, organisations have genes too. Well, they have something that does the same job. They have organisational routines, little sub-processes that combine with other routines to ‘express’ capabilities in, for example, insight creation or strategy design. Evolutionary scientists call both genes and routines ‘replicators’ because they both store information and can be copied. It’s the variation in replicators that causes the variation in the characteristics of both organisms and organisations. Look inside a generics company and a rare disease company, for example, and you will see very different routines, all interacting with each other to produce different organisational characteristics.

One out of many
Can you see where I’m heading with this? Those firms that say ‘We’re going to improve our competitive capabilities by...’ are a little like those who hoped to create superhumans by changing one or two nucleotides in our six billion base pairs. Those early genetic optimists greatly underestimated the complexity of the connection from genome to phenome. In particular, they didn’t know about or didn’t understand the amazingly complex interaction between genes. In the same way, expecting a significant difference in competitive capabilities from any single organisational intervention is simplistic and naïve. For example, routines for understanding market trends interact with routines for competitor analysis, market segmentation, proposition design... and so on. It takes many small, connected changes in the routineome to get one significant change in competitive capabilities.

Jeremiah’s lessons
So what’s this got to do with me welcoming Jeremiahs into my strategy workshops?
Well, these guys often tell me why previous programmes failed and this points me to where I need to go to address the interactions between routines. Value proposition design failed because implementers weren’t capable?

Insight creation failed because business intelligence analysts didn’t know about contextual segmentation? Key account empowerment didn’t work because alternative control mechanisms weren’t in place? Each one of the tales of woe from the Jeremiahs are, in reality, flags for where routine-routine interaction needs to be understood and addressed.

Holistic excellence
Let me end with the practical takeaway from this story. The way organisational development processes and budgets are set up inclines organisations towards symptomatic approaches: shortish, limited interventions with specific, narrow goals. These are the equivalent of tweaking a single gene to increase intelligence. That gene (that is, that routine) may well need to be tweaked but it won’t make any difference in isolation. Instead, something like a genome-wide assessment and management is needed, one that recognises the poly-routine nature of any organisational capability. Just as improving the health of an organism can’t be done by occasional tweaks, the health of your organisation needs a holistic approach.

You can find podcasts and videos of this and previous columns by searching for Darwin’s Medicine at YouTube or wherever you get your podcasts.

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

13th May 2022

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