Tuesday, July 2, 2013

Darwin’s humbling lesson for business

by John Kay

Financial Times

July 2, 2013

Your correspondent is sitting below a large and ugly statue of Charles Darwin, overlooking the bay where the great scientist stepped ashore on Chatham, now San Cristobal, the most easterly of the Galápagos Islands I am here to discuss the ways in which evolutionary theory can contribute to our understanding of social sciences.

It seems barely possible that careful observation of finches, mockingbirds and tortoises could fundamentally change the way we think about the world. But in the 19th century it did. The Galápagos, 700 miles from the mainland of Ecuador, contain flora and fauna that differ from those of the rest of the world and differ, but less, from island to island. The genius of Darwin was to apprehend the process by which this pattern came about.

Evolution is a process with three elements; variation, selection and replication. Changes happen, a few of these changes yield advantages, and such changes tend to be reproduced in subsequent generations. The extraordinary outcome – so far-reaching in its implications that Darwin hesitated to publish his ideas – is that designs of extraordinary complexity and efficiency can be achieved without the aid of a designer. Designs can emerge beyond the comprehension of any individual.

That insight, and the mechanics of variation, selection and replication, are relevant to many problems other than the origin of species. Modern business has developed as a result of the variation that comes from experiments in products and business methods, the selection by customers and capital markets of adaptations that add value (and the rejection of those that do not), and the replication by competitors of strategies that succeed.

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