How to win against rip currents and Asian competitors? - Differentiate and specialise!

By George ILIEV
CorporateNature Metaphor Series, No 112

How do you escape a rip current at sea? Never swim straight back towards the beach and directly against the rip. Instead, swim sideways along the beach for 100 metres and then head towards land. Rip currents are narrow flows and should be avoided, not fought.

The same is true of global trends. If you are a western company or university, there is no point in fighting against the rise of Asian competitors. Instead, simply do things differently. If you have just fallen out of the Global Top 100 because five more Chinese entities have entered the ranking and displaced you, don't just fight back head on, on all fronts. Instead, decide in which direction you can differentiate and specialise, and focus on cornering the market in that particular field. It is unlikely that you will have to make a choice between more than two possible ways forward. 

Isn't this just like at a beach with a rip current: all you need to do is swim along the beach either to one side, or to the other.

Rip current diagram (Source: Wikipedia)

The formation of the EU unleashed socio-economic competition similar to the evolution of animal species when tectonic plates collide

The linking of North and South America led to the Great American Interchange: successful species advanced and unsuccessful ones retreated. The formation of the EU led to similar movements in the "Great European Shortchange"

By George ILIEV
CorporateNature Metaphor Series, No 77


Until three million years ago, North America (including Mexico and Central America) was separated from South America by an ocean in the middle. Then around three million yeas ago the Isthmus of Panama rose up from the sea floor and created a land bridge linking the two continents: a phenomenon known as the Great American Interchange. 

The New World was never been the same again since: Many northern species, including jaguars, pumas, llamas and a tonne of other animals invaded the South and thrived. But only three South American species moved north and spread out in any large numbers (the armadillo, the opossum and the porcupine). The reason for this discrepancy was that northern animals had had millions of years to evolve and acclimatise to tropical conditions in Mexico and Central America, which had served as a nursery for their southern expansion. On the other hand, southern animals had only lived in the tropics so the northern plains and mountains were not a hospitable habitat for them.

The creation of the EU since the 1950s is a similar story of competition among economic and social species: a Great European Interchange. The Common Market served as a training ground for the global expansion of the most competitive European companies: Airbus, German car-makers, a few pharmaceutical firms and the banks and funds of the City of London. These companies became the jaguars and the pumas of the corporate world. 

On the other hand, freedom of movement for people exposed to trans-continental competition European blue-collar workers who hadn't acclimatised to globalisation. These workers, just like the South American species, became the losers from the Great European Interchange. Their sidelining ultimately led to Brexit and to other anti-EU social movements on the continent, as the EU for them felt more like "a Great European Shortchange." 

In Britain former prime minister Gordon Brown set up a short-lived Migration Impact Fund at the end of his rule in an attempt to mitigate the consequences of globalisation for manufacturing workers. Unfortunately, this fund was closed by the next British prime minister, David Cameron, who took over in 2010. Cameron didn't see the writing on the wall until it was too late - which cost him losing the ill-fated EU referendum in 2016.

There was one key difference between the Great American Interchange and the Great European Shortchange. Three million years ago, the different species in the Americas could only vote with their feet. In present-day Europe, all people can vote in elections and referendums, so leaving behind a large segment of the population feeling shortchanged was never going to be a successful recipe for cohesive political and economic development.

The Great American Interchange (Source: Wikipedia)

@GeorgeILIEV  
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When stars collide, teamwork suffers. Why teams with many stars often lose?

Stars in some sports compete among themselves, rather than against their opponents
By George ILIEV

Research published in Psychological Science finds a satiation threshold of stardom in various sports: having too many stars on a team often hampers the overall success of the team. In a sport like football (soccer), having more than 75% stars on the team turns out to be counter-productive. In basketball the threshold is even lower, at 60%.

When individual stardom turns into collective martyrdom

Having too many stars become a hindrance when the roles in a given sport are not highly specialised. Ten of the 11 players in a football (soccer) team run and kick the ball pretty much the same way. All five basketball players dribble and pass similarly.

On the other hand, in sports with highly specialised roles such as baseball (where one is using a bat and the other a glove), there is no harm in piling on more and more stars… until they fill up the night sky.


Game Theory explains internal competition within "zero-sum" games

When the roles in a team are not highly specific, as in basketball and football (soccer), play degenerates into an individualistic performance where each player views their activity within the team as a zero-sum game. This gives them an incentive to keep the ball longer, to the detriment of fellow team-mates who might be in a better position to score a goal. As a result, instead of competing against the “competition”, the team starts to compete within itself, leading to the poorer performance of "star-spangled teams".

On the other hand, in baseball the players have an incentive to cooperate all the time as each player’s success is a win-win for all team-mates (i.e. a non-zero sum game).

Competition trumps cooperation in the corporate tug-of-war

This sports analogy is directly observed in the business world. Consulting and investment banking teams composed of multiple star performers often fail when the team roles are homogeneous in design and start to overlap. This means a degree of hierarchy may actually make a team more productive: a team composed of a director, a manager, executives and coordinators divides the responsibilities and focus on different tasks, so the team members do not compete against each other. Otherwise, in a high-pressure environment, you end up hearing stories about one flight attendant hitting another with a tray in front of all passengers.

Two key take-aways:

1) To achieve team success, it is plainly not enough to have diversity of backgrounds; diversity of roles needs to complement team design.

2) When stars collide some teams lose out. And I am not talking astrology here. Rooney and Gerrard: take note!

How to stay hidden, yet visible: lizards and private companies know the trick

Having two faces is never a bad idea in business or nature
By George ILIEV

The advantages of staying private

Companies that stay private achieve two conflicting objectives: they can be as visible as they want to their customers but can hide strategic information from their competitors. A public listing on the stock market opens up a company for scrutiny by competitors, as the regular reporting to the stock exchange will disclose competitive information and strategic moves.

Lizards playing with colour

The male Iberian emerald lizard achieves the same double effect with the colouration of its head, according to recent research reported by The Economist. The bright blue colouring is iridescent: 

- when seen from above (by a predator bird) it reflects the surrounding landscape and blends in with the environment;

- when seen from ground level (by other lizards), the blue stands out against the landscape, potentially attracting mating partners.

(Photo: Iberian emerald lizard. Source: Wikipedia)

Aircraft privacy intrusion

In a starkly competitive move, Boeing bought 17 new Airbus planes from Singapore Airlines in 1999 in order to replace the Airbus batch with Boeing planes and keep the Singaporean flag carrier a loyal Boeing customer. In addition to getting the planes delivered (to be resold to other airlines), Boeing also received all the technical documentation that goes with an Airbus plane, thus gaining competitive intelligence directly from the horse's mouth. 

Competitors posing as customers to gain insight into their rival's business are not a new phenomenon. However, hawks have not yet cottoned on that they need to start hunting from ground level to catch a male Iberian lizard.

Further reading

The topic of how and why animals and companies operate in stealth mode is covered in my June 2014 blog post:

Stealth mode among companies and animals: Crickets and spiders learn to lie low 

(Crickets give up chirping, spiders disguise as bird poo, companies slip under the radar to avoid corporate predators.)

Google's "Don't Be Evil" philosophy is encoded in the evolution of the human fist

Fists compensate for fangs in nature; Algorithms compensate for aggression in business
George ILIEV

Because of the unique proportions of the bones of the human fingers, a clenched human fist is 4 times as rigid as the fist of a chimpanzee, according to research published in the Journal of Experimental Biology. This allows humans to deliver bone-breaking blows with their knuckles and may partly explain how humans evolved (and survived) through an era of large predators while at the same time losing the fangs that served a defensive role in earlier humanoids and in present-day great apes.

Human fingers have evolved to fold neatly into a fist without leaving a gap in the middle. This makes the structure stiff, while chimpanzees fingers curl up in a way that always leaves the centre hollow. The human thumb adds extra support to the structure by buttressing it sideways and turns the fist into a formidable defensive tool.

The evolution of the fist resembles the rise of Google and its "Don't Be Evil" motto. By giving up the fangs of aggressive corporate techniques such as cornering markets, leaning on suppliers and squeezing long hours out of employees (think investment banks), Google has built a "gentle empire" of innovation and creativity. Google's development of superior data crunching algorithms is the virtual fist that punches heavy blows in the online world.

(Photo: Google HQ, Mountain View, California, May 2009)

(Photo: Human fist, March 2013)

Companies can be worse than plant roots in self/non-self recognition

Competition and miscommunication among company departments harms the organisation: the story of Volvo
George ILIEV

(Mangrove tree, Wikipedia)

As the roots of a plant grow, the root branches of the same organism recognise each other (the underlying mechanism for that is still unclear) and stay out of each other's reach as much as possible: "plants develop fewer and shorter roots in the presence of other roots of the same individual". This is an evolutionary adaptation that minimises direct competition for nutrients between parts of the same organism. On the contrary, the roots can speed up their rate of growth if surrounded by roots of other plants, in order to be successful in competing externally.

Sadly internal cooperation is not always the norm in the corporate world. Company departments can be notoriously bad at synchronising their actions and sometimes even compete against each other. A case in point is the following story at car-maker Volvo in Sweden in the mid-1990s:

Volvo was accumulating a large stock of cars painted green. To reduce the stockpile, the sales department began selling green-coloured cars at a discount. Unfortunately no one told the manufacturing team down on the production line. No sooner had the production managers seen demand for green cars perking up, they immediately ramped up the production of green cars to build up the inventory (a typical supply-chain phenomenon known as the bullwhip effect)

Thus the cooperative plant roots seem to avoid "biting the dust" even if they literally do this all the time.