02.28.18

You say you want an evolution: A look at The Red Queen Principle and how not to fall down the rabbit hole

Our friend, Shane Parrish at Farnam Street, describes the origin of the name of the Red Queen Principle like this:

“In Through the Looking Glass, Alice, a young girl, gets schooled by the Red Queen in an important life lesson that many of us fail to heed. Alice finds herself running faster and faster but staying in the same place.

Alice never could quite make out, in thinking it over afterwards, how it was that they began: all she remembers is, that they were running hand in hand, and the Queen went so fast that it was all she could do to keep up with her: and still the Queen kept crying ‘Faster! Faster!' but Alice felt she could not go faster, though she had not breath left to say so.

The most curious part of the thing was, that the trees and the other things round them never changed their places at all: however fast they went, they never seemed to pass anything. ‘I wonder if all the things move along with us?' thought poor puzzled Alice. And the Queen seemed to guess her thoughts, for she cried, ‘Faster! Don't try to talk!'

Eventually, the Queen stops running and props Alice up against a tree, telling her to rest.

Alice looked round her in great surprise. ‘Why, I do believe we've been under this tree the whole time!   Everything's just as it was!'

‘Of course it is,' said the Queen, ‘what would you have it?'

‘Well, in our country,' said Alice, still panting a little, ‘you'd generally get to somewhere else — if you ran very fast for a long time, as we've been doing.'

‘A slow sort of country!' said the Queen. ‘Now, here, you see, it takes all the running you can do, to keep in the same place.

If you want to get somewhere else, you must run at least twice as fast as that!'

***

“It is not the strongest of the species that survives,
nor the most intelligent,
but the one most responsive to change.”
— Charles Darwin

The Red Queen Principle means we can't be complacent or we'll fall behind. To survive another day we have to run very fast and hard, we need to co-evolve with the systems we interact with.

Taken from the character in Louis Carroll’s Through the Looking-Glass, The Red Queen Principle (or Effect) is a sobering look at survival. The RQP has been applied to everything from the battle of the sexes to nuclear war to the corporate landscape. But no matter how different the area, the conclusions are the same: To avoid extinction in a rapidly changing world, we must run—fast—even if it’s to stay in the same place.

Nature has shown us we don’t all evolve at the same rate. Darwin observed that some of us respond to change more than others, and those who respond faster have the edge of survival.

Regarding an evolutionary arms race, the Red Queen hypothesis contends that hawk and dove must somehow evolve together just to reach an uneasy balance of peace.

And in the competitive business world, no one is safe. Any company who settles into a smug state of satisfaction is in danger of complacency, and thus becoming embedded in their own Red Queen. They quickly discover that to survive—much less thrive—isn’t a matter of simply running harder, but running smarter as well. When the economy’s up, virtually anyone can open a business and find success. But when the going gets tough, it’s the tough that have the backup plans and branding strategies that will keep them going.

So, how do businesses avoid the Red Queen?

One way is to invest heavily in developing new products and content. Let’s face it, the ones who have the fewest blind spots win. And by constantly creating and introducing consumer-pleasing products—while weeding out those that don’t—not only add value to a business, but improve their chances of staying in business. For many, it’s not an easy way to go. It’s time-consuming and very expensive. But as the Red Queen showed Alice, while running in place has its price, standing still will really cost you. And history has shown us over and over that if we don’t get better, we fade away.

Another way is to concentrate on tomorrow and not today. In business, it’s tempting to put a band aid on an immediate problem, when major surgery is needed. So stop spending your time and resources fixing things that won’t get fixed right away, and instead focus on the intelligent decisions that will help in the long-run, and stand the test of time.

Finally, the smart ones know the difference between how the world is, and how we want the world to be. When things aren’t going our way, it’s tempting to sit back and blame others. Which of course results in falling behind and making it even harder to catch up. Reality bites, but recognizing it and adapting to it puts the wind at your back, and the odds in your favor.

Even Fortune 500 companies are not immune to the risks of the Red Queen. Fifty years ago, the life expectancy of a Fortune 500 company was 75 years. Today, it’s 15. Of the top 25 Fortune 500 companies listed in 1961, only six remain. One of those six that was heading for disaster was IBM.

By 1993, the business machine giant had lost more money in a single year ($8.2 billion) than any company in U.S. history. Amid the personal computer and client server boom, they were (in the words of the Queen herself) spinning their wheels, and getting nowhere fast.

Looking to their current CEO for guidance, his response was to split each section of IBM into separate business units to go head-to-head with the younger, leaner, more aggressive tech companies. Unfortunately, it was a short-term solution, and had they stayed this course, they would have fallen into ruin.

In a bold move, IBM fired their CEO and for the first time in their history, hired from outside their ranks. Lou Gerstner was a genius in business, but knew virtually nothing about computers.

But what he did know was how to listen to clients and customers. He heard that IBM’s biggest problem was in integrating the myriad of rapidly-emerging computing technologies. He then realized IBM’s greatest strength was their ability to provide integrated solutions—supplying not only the pieces and parts—but the much-needed assistance in the installation, upkeep and maintenance of it all.

By reuniting the separate business units, and focusing on long-term solutions, IBM’s resilience to the Red Queen paid off. And in 2017, the 95-year old “dinosaur” was ranked #23rd in the Fortune 500.

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