How Your Business Can Avoid Extinction

Businesses can learn from the evolutionary prowess of penguins and Facebook.

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The 2005 film "The March of the Penguins" chronicled the survival challenges faced by emperor penguins. Researchers estimate that only 10 to 20 percent of emperor penguin chicks survive their first year of life in the frigid Antarctic (-40^oF, up to 90-mph winds). A one in five first-year survival rate certainly is horrific, and sadly other penguin species also have high mortality rates (by human standards at least).

Yet penguins have adapted to a wide variety of environments, from the extreme cold of Antarctica to the equatorial waters of the Galapagos. The nearly 20 extant penguin species vary in size from 3.3 pounds (Little Blue Penguin) to as much as 99 pounds (Emperor Penguin).

If penguins were a business, we would conclude that they have creatively explored and developed diverse solutions to survive in diverse niches!

Here's how: The extreme "survival of the fittest" mortality rates require penguins to quickly adapt to new or changing environments. The fittest penguins have many opportunities over a long life (20 to 50 years for Emperor Penguins) to pass on their genes. If environmental conditions change, a different mix of parents will successfully procreate the next generation, and the species will thus evolve to adapt and thrive.

The Evolution of Your Business Model

What is true in the world of penguins is no less true in the world of ideas. In today's rapidly changing environment, businesses must adapt more quickly than ever. In evolutionary lingo, a business must constantly explore the environment with new variations and evolve to exploit the most promising.

There are two key elements of this learning model:

1. Explore

Rapidly and rigorously test a wide range of business model variations. Expect a high failure rate in those tests.

2. Exploit

When a new variant "survives the cull" and shows great promise, quickly build it into the go-forward business model.

BusinessWeek recently reported on Facebook's culture, which perhaps best exemplifies this approach. They bring it to life in the slogan "Move Fast and Break Things." According to the article, at any given moment Facebook has tens of thousands of A/B tests running. Each day can bring thousands of additional changes. Some are minor color or icon changes; others are fundamental revisions to the user experience. Facebook releases them all, once every business day.

This may sound like barely controlled chaos (and it has on occasion blown up badly), but it has led to a continuous and fruitful evolution of Facebook's look-and-feel as well as its business model. Like the humble penguin, Facebook has explored and exploited a wide range of environments. As a result Facebook has expanded well beyond its dorm-room roots to become a global social media platform.

Is your business similarly ready to move fast and break things?

How well does your business explore and exploit? Share your thoughts with us at karlandbill@avondalestrategicpartners.com.

Karl Stark and Bill Stewart are managing directors and co-founders of Avondale, a strategic advisory firm focused on growing companies. Avondale, based in Chicago, is a high-growth company itself and is a two-time Inc. 500 honoree. @karlstark