It’s time to ask nature how to keep pace with the change. Amplified by the pandemic, the digital dare is creating new winners and losers as we speak. From reimagining our lives to reassessing costs, at a personal and professional level, we need effective ways to defend from threats and to catch opportunities.
In our days, everybody talks about innovation taking as an example Google, Amazon, or Apple. In these talks, innovation equals disruption, downsizing, discounting, unrecognizing all the incremental work required to create something “new”.
As we perceive mainly material changes, we value less the evolutionary aspects of life, which is incremental and optimized around failures and successes in adapting to the environment. Sudden events can change a given equilibrium of the ecosystem and organism that are not equipped to.
For several decades, IP exclusivity and regulatory laws have been key in pursuing and financing innovation in many sectors, granting prosperity and growth to organizations. Confident in these unpassable barriers, in these organizations, innovation processes have become so heavy to impairing their reaction when new start-ups, Tech Giants, or other large organizations have started to bite around pieces of businesses, conquering roles and evolving and converging their ecosystems.
To win their digital dare, no matter the size, no matter the sectors, organizations will need to fly high, scouring for opportunities that might create business today and tomorrow. They will have to abandon burrowing their own way into regulations and push the entire sector to new levels of collaboration.
Understanding Life history strategies
In a nutshell, a life history strategy is a specific approach that organisms iterate to reproduce themselves and to successfully survive in an ecosystem. In this selection process, the ecosystem covers a key role. An ecosystem starts with organisms forced to share the same space, living on their own: when external factors increase the pressure, (a climate change or new organism stepping in the space), they start to engage each other on duels or specific arenas, in competition or cooperation mode: after several iterations, organisms that will reach a balance will develop or adjust their own life strategy to become or remain a constitutional member of the ecosystem.
Organisms that will optimize their investment in consideration to the others species will survive in the evolved ecosystem; others will perish.
Parallelism with innovation
if we consider innovation as the process to bring “to life” idea, we can look for innovation strategies making an analogy with life history strategies:
As life strategy depends strongly on the ecosystem, also innovation strategies need to consider the ecosystem and related factors that can produce a change.
In nature, an organism survives in an ecosystem if it finds the right balance between offspring and parent’s energy investment: few offspring means high parent’s energy investment, while large offspring carry low energy investment. This is how it is set up.
At the foundation of any life history strategy, there is a basic, “quantity versus quality” question. There is no right or wrong. The best life history approach is the one that fits the ecosystem.
This applies to animals, plants, and making an analogy between reproduction as promoting ideas to “life”, it can be extended to product and service innovation.
Under this “quantity versus quality” dilemma, turtles and pandas represent two symbolic extremes:
The turtle’s life history approach privileges quantity over quality, many eggs, and almost no parents’ investment.
The panda’s life history approach is the opposite, having a parents’ dedication and energy investment for every single offspring.
Translating the same to innovation, before organizing the next hackathon or innovation lab, it would be worth to do a bit of math and make a reality check against the “ecosystem“ to validate what are the chances that the investment will bring something to life.
The “turtle’s life history strategy” applied to innovation
In markets where ideas require limited investment to survive, organizations can use the “turtle’s” life history strategy to innovate.
The idea “offspring will be left right after “on their own”, few of them will independently survive and become new products or services. For each single of them, odds are low, though natural selection will do part of the job.
This approach works the best with idea-products injected directly into the market.
The life history turtle’s strategy in facts requires that ideas, once shaped, will grow independently into products: Google, Amazon, Alibaba or Samsung use this approach, easily supporting new ideas, letting customers validate their use cases and, as easily, decommissioning products and services if they don’t fly.
The “turtle’s approach” (many eggs with small parents’ investment) works the best with innovation labs and hackathons. The reason is simple: the ideas need to have a short regulation journey, fast time to market, and no hidden cost. Winning a Hackathon can give a new idea enough visibility to get the attention of Venture Capitals (or Tech Giants) before even reaching the market itself. Investors could have multiple interests: adding a new product, expanding the functionality of an existing one, or simply “to buy to kill”, this to avoiding competition with their own ones. The most important aspect though is that failure is embedded in the investment process as the innovation outcome is statistically managed: nobody will lose a job if one idea fails as no job is linked to a single one.
The success of a turtle’s life strategy goes beyond the individual offspring, it is a statistical outcome.
Biotechs, Insuretechs, or start-ups in the internet arena can make the best out of this strategy as they can get early attention from venture capitalists, who could fuel their IPOs or acquire them before entering the though regulation journey.
Takeaways:
In sectors where ideas require very limited investment to survive, organizations can use hackathon or incubator to promote innovation.
High proliferation grants a return on the overall investment.
This strategy is ideal for products that are injected directly into the market that require minimum investment.
Ideas do not have to be organic, and can expand the organization without impacting core functions
If benefits do not materialize, they can be easily decommissioned
The “panda’s life history strategy” applied to innovation
In sectors with large R&D spent and strong regulation, the “panda’s” life history strategy would work better. Making a limited offspring of ideas, researching and making large energy investment in identified trends, it requires lots of parental care: these organisms are effectively investing in the survival of each offspring.
This applies well to Wellcare foundational sectors, life-science, and insurance, where innovation is the result of large investments and requires compliance to very strict regulations to become a product or a service.
In this domain Amazon, UnitedHealth Group, Walmart, have all acquired something already shaped and functioning, using and leveraging their domain knowledge to intercept the need.
What do we learn from that?
Innovation emerges from combining domain, functional, and operational knowledge. Few organizations have all of three inside their walls, the majority needs to find the right blend by leveraging strategic partnerships. Best results happen when the internal perspective identifies the “need”, the functional view comes from a consultancy who know the best what others are doing in that space and, the operational knowledge comes from “ the custodians of the customer’s landscape”, aka system integrators, who will wire in there new services and products, motivated by the need of keeping the house clean.
Strategic partnerships require time and, in our analogy, “parental care” summarizes in time and dedication. The best setup is to have Innovation departments, technology-independent, who spend their time bringing to life ideas, reworking them, and amalgamating perceived needs and resulting understanding.
This setup cannot be outsourced and if wrongly used, it might lead to service failures and higher maintenance costs.
Think about a commercial function that gets from a hackathon a very niche app made by a boutique start-up, developed with low standards and compliance. Scaled up over thousands of sales agents, this might crash because of high volume, or it could be exploited creating a data breach, if not enough security has been implemented.
Takeaways:
Sectors with large R&D spent and strong regulation, they should leverage their domain knowledge to select viable new ideas directly from the market and to provide parents’ care until new products are able to survive by their own.
To be organic, innovation need to work around the business core, understanding primary needs and invest at enterprise level to grant proper “attention”.
Innovation should serve more actuaries and scientists to address their needs and leverage their competences to revolute the business than secondary functions to reduce costs
The marketing side should be used to explain internally the value and to preserve domain knowledge as ideas should reach the market when already able to survive.
Conclusions
Innovation strategies need to consider the ecosystem and related factors that can produce a change, adapting accordingly.
The digital dare, amplified by the pandemic, is changing our business and personal life, with an unparalleled pace. New materials, new devices, new concepts, new ways of communicating create threats or opportunities depending on our ability to leverage their potential.
This is not new in nature. At the foundation of the way nature innovates itself, there is a basic, “quantity versus quality” evaluation, with the objective of maximizing the survival odds. The answer to this dilemma is strongly influenced by the environment, and the response can change if the environment changes.
For instance, with tech giants entering the healthcare space, the offer is moving toward customers before during and after they become patients: this is giving birth to a new ecosystem, the “Wellcare” and more actors of any size (from Walmart to biotech and Fintech start-ups) are finding profitable and effective ways to join the ecosystem.
So to understand how this applies to evolving existing ecosystems, it is worth having a look at the organisms, the external factors, the emerging arenas, and the competitive or cooperative modes they have in front. With all of these in mind, a successful innovation history strategy will come as a consequence.
In the same ecosystems, different organizations will adopt different strategies, and their success will depend on their ability to find a white space.
For instance, organizations with a large R&D spent will need to adopt a “panda’s life history strategy”, leveraging their domain knowledge to create internally or to select viable new ideas directly from the market and to provide parents’ care until new products are able to survive by their own.
At the same time, Venture Capitalists and giant organizations (from Amazon to Walmart) will scaur around for ideas using “turtle’s life history strategy”, giving early attention to start-ups, fueling their IPOs, creating new offers.
This is not going to be an easy transition and new levels of collaboration need to be reached across the sectors, breaking decennials barriers.
