In a volatile business climate, companies can gain advantage by learning from natural rules

Since the industrial revolution, we have achieved great feats of economic, social and technological advancement for which we can be proud. However, these are volatile times and new challenges now face our businesses, economies and societies, relating to resource scarcity, environmental destruction and ever-increasing population pressures.  

Our current business paradigm has exacerbated the imbalances, tensions and volatility we face today. Albert Einstein observed: “We cannot solve the problems in the world with the same level of thinking that brought them about in the first place.”To operate in the world we now live in we need fresh approaches to businesses that are fit for the present and future.

Good business is fundamentally about seeking out opportunities for value creation, not about trying to get something for nothing. As our social, economic and environmental landscapes become ever more volatile, business approaches need to adapt and evolve to optimise the opportunities for value creation.

Business leaders

And, in the words of environmentalist Paul Hawken, “business and industry is the only institution that is large enough, pervasive enough and powerful enough to lead humankind out of this mess”.

Therefore, the re-evaluation and transformation of our business paradigm is fundamental to the successful evolution not only of business, but of our species as a whole.

In times of pressing challenges, in this “perfect storm” of social, economic and environmental volatility, it requires great courage to break rank from a paradigm that is ingrained in our business mindset. Transformational times call for transformational change.

To succeed in business we must be agile, creative, alert, spontaneous and responsive – often operating in completely new ways. Today’s rapidly changing business environment calls for businesses that thrive in rapidly changing environments: businesses more akin to living systems.

These “firms of the future” can learn and adapt; they are not structured and siloed, which stifles learning and agility. These firms are bottom-up, decentralised, interdependent, multifunctional, emergent, self-organising units – not the centralised, top-down, hierarchically-managed monoliths of the 20th century. Put simply, the business models and management approaches that served us well in the past are no longer fit for purpose in a business context where dynamic change is the new norm.  

The years to 2020 will see organisations that “get it” adapting and evolving, and those that do not perishing or being acquired. Bold firms of the future do not try to tightly manage change, they empower a culture of collaboration to unlock the creative potential of their own workforce, their partners and the communities they serve, initiating virtuous cycles of collaboration, innovation and value creation for all stakeholders. The result: more value, bigger margins and higher wellbeing.

Dawn Vance, director of global logistics at Nike, says: “Organisations have three options: hit the wall; optimise and delay hitting the wall; or, redesign for resilience – simultaneously optimising existing networks whilst creating disruptive innovations and working collaboratively with partners.”

It is this “redesigning for resilience” that drives the transformation to a firm of the future. The firm of the future is one that:

• Drives transformation through values-based leadership and stakeholder empowerment using the catalysts of education, innovation, inspiration and collaboration.
• Encourages synergies across its business ecosystem, engaging with multiple stakeholders in an open, transparent way; where common values create connections enabling mutualism.
• Harnesses the power of social networks and the “pull” media; uses crowd sourcing, co-creation, open source collaboration platforms and transparent branding for differentiation.
• Evolves ecological thinking for innovating and new ways of operating and generating value for every stakeholder within the community it serves; where waste equals food and nature inspires people, processes, products and places.

The pressure for change is increasing all the time. Well publicised forward-thinking companies are already making headway on their transformational journey – Unilever, Puma, InterfaceFlor, GE, Patagonia, Nike and Marks & Spencer, to name a few.

Visionary business leaders of today are already making bold steps on this transformational, emergent path for themselves and their businesses. And it is a journey rather than a destination. Transforming towards a firm of the future is not about designing the right business model and implementing it, it is about understanding the ethos, ethics and environment that will allow the organisation, individuals and wider stakeholder community to flourish, adapt and evolve.

Natural law

The good news is that inspiration for the current pressing challenges is all around us in nature. Nature has been dealing with dynamic change for more than 3.8bn years, and the more we explore and connect with nature’s ways, the more we find inspiration for operating in a dynamically changing business environment.

Our understanding of nature has evolved over the past few decades, from viewing nature as a battle ground of competition to one of dynamic non-equilibrium, where an order within chaos prevails due to unwritten natural patterns, feedback loops, behavioural qualities, interdependencies, and collaboration within and throughout ecosystems. Nature adapts within limits and creates conditions conducive to life. Recent discoveries in microbiology and quantum mechanics uncover the importance of cellular membranes in the adaptation and evolution of organisms. Likewise, the perceptions and beliefs of the individual, organisation and ecosystem can affect their ability to sense, respond, adapt and evolve to volatility in their environment.

Biomimicry for Creative Innovation, a collaboration of specialists applying ecological thinking for business transformation, has developed a set of business principles for the firm of the future, developed from the “life principles” created by the Biomimicry Institute. These business principles are inspired by nature.

Build resilience: It’s more effective to build resilience than to correct poor risk-based decisions that were made with partial information. A business inspired by nature builds resilience by:

• Using change and disturbance as opportunities rather than fearing them as threats.
• Decentralising, distributing and diversifying knowledge, resources, decision making and actions.
• Fostering diversity in people, relationships, ideas and approaches.

Optimise: Optimising delivers better results than maximising or minimising. A business inspired by nature does this by:

• Creating forms that fit functions, not the other way around.
• Embedding multiplicity into both functions and responses.
• Creating complexity and diversity using simple components and patterns.

Adapt: Being adaptive pays back better than staying on a fixed course. A business inspired by nature adapts by:

• Creating feedback loops to sense and respond at all levels of the system.
• Anticipating and integrating cyclic processes.
• Being resourceful and opportunistic when resource availability changes.

Integrate systems: With limited resources and a changing environment, it’s better to be systems-based rather than independent. A business inspired by nature works with whole systems by:

• Fostering synergies within communities.
• Fostering synergies within energy, information and communication networks.
• Creating extended systems to continuously recycle wastes into resources.

Navigate by values: In uncertain times, it’s better to be based on a compass of values than a fixed destination point or set of predefined metrics. A business inspired by nature reflects values by:

• Knowing what’s really important to the communities it operates in, interacts with, and impacts on.
• Using values as the core driver towards positive outcomes.
• Measuring what is valued rather than valuing what is measured.

Support life: In the long run, it takes less effort and fewer resources to support life-building activities than to be damaging or toxic and pick up the cost later. A business inspired by nature supports life-building activity by:

• Leveraging information and innovation rather than energy and materials.
• Creating support for individual components that can support the whole ecosystem; supporting the ecosystem so that it can support the individual.
• Making products water-based, renewable, bio-based, and biodegradable.

Transformation framework

These business principles build on a wide set of existing business theoriesand are not aimed at providing perfection in organisational design (if such would ever exist). They provide a framework to guide successful transformation towards a firm of the future – a business inspired by nature.

Such business principles are aimed at creating business conditions conducive to collaboration, adaptability, creativity, local attunement, multi-functionality and responsiveness; hence, enhancing the evolution of organisations from rigid, tightly managed hierarchies to dynamic living organisations that thrive and flourish within ever-changing business, socio-economic and environmental conditions. Organisations that understand how to embed these principles from nature into their products, processes, policies and practices create greater abundance for themselves and their business ecosystems in times of rapid change, flourishing rather than perishing in volatile business conditions.

While, on the surface, diverse, interconnected, open, emergent organisations may appear more chaotic and difficult to manage, they are vibrant places for people to become self-empowered and to inspire others – self-managing through mutual understanding of correct behaviours rooted in core values and clarity of purpose. It is this shared value set of core ethics that ensures the chaotic nature of self-empowered diversity naturally emerges towards delivering the value creation goals of the organisation, while maintaining flexibility, adaptability and sense of purpose.

Increasingly, as the organisation is required to become more emergent, so leadership is more about empowering, empathising and encouraging interconnections, innovation and an active network of feedback. As organisations and business ecosystems become more self-organising and self-empowering, the working environment and culture becomes more emotionally and mentally healthy, where business goals are met without sacrificing personal values and integrity. Quite the contrary, in fact: work acts to reinforce personal integrity in providing a rich emergent experience for individual and collective learning and ethical growth.

The more our working environments become life-enhancing, the more alive the organisations and the more aligned we become to the true nature within us and around us. A growing number of business leaders recognise this, including Paul Polman of Unilever, Mark Parker of Nike, Richard Branson of Virgin, Andy Wood of Adnams and Ricardo Semler of Semco, to name a few.

Complex, self-organising firms of the future recognise that change emerges in unpredictable ways, and that over-arching bureaucratic mechanisms no longer assist emergent organisational evolution. The role of leadership is to actively participate in enabling and facilitating local change, by encouraging effective communications through clarity of understanding of how to behave, act and interact. Each of us plays our part in leadership of the future by helping others to co-create towards positive outcomes.

Biomimicry as a school of thought suggests that we can learn to play by the rules of nature, which offer a rich source of inspiration to challenge our current unsustainable business practices and invent new strategies. Nature’s business principles are universal, but there is room for specific individual behaviours, and indeed we as individuals and business people need to invent our future in a great variety of ways.

In these challenging (yet pivotal) times for business and humanity, we must realise that to become truly sustainable, human and business life has to become scientifically inspired, emotionally connected and spiritually entwined with nature and Gaia. Nature and business (as with nature and humanity) must be symbiotic and operate in mutualism for there to be anything resembling a successful outcome. The sooner business realises the opportunities that come with being connected to and inspired by nature, the better for humanity, and for all species.

Giles Hutchins is a management consultant and co-founder of BCI: Biomimicry for Creative Innovation [www.businessinspiredbynature.com]. He blogs at www.thenatureofbusiness.org and his book, The Nature of Business, has recently been published. He is now working on a documentary of the same title.