What Your Business Can Learn from Ants and Nature
Superhero movies usually are not big masterpieces of cinematography in which we can reflect about philosophical issues and deep concepts (unless you’re really clever). However, upon the viewing of Ant-Man the idea of making this blog entry came to me. Ant-Man not only starred Paul Rudd, but also ants, tons of ants and I think we can learn from those tiny insects more than we might think.
The world, despite what economists would like it to be, is not easy to understand. The variables (people, markets, externalities) make the system very complex. It is natural that with so many layers of complexity the economy is not easy to understand. Even if we scale it down to a city, a company or even a small start-up the problem does not become easier. In all of these cases we have people making decisions and other people making decisions based on previous decisions.
Let me present to you:
COMPLEX ADAPTIVE SYSTEM THEORY.
The Complex Adaptive Systems (CAS) Theory describes a system where the decisions are made every second and not a single agent is in control, resulting in a dispersed system. The only way the system stays together is by the cooperation and the decisions that link every agent together. Why is important to know this? If we recognize business models and economic models as CAS we can then use strategies general to most CAS to make our business grow or made sense out of our scientific analysis.
CAS exist all over nature, an easy example are ant colonies. Ant colonies are very complex systems where every ant does a specific job and action and not a single ant is in charge of everything. Do you imagine what would happen if this big master-ant-mind would be stepped on? The whole system would collapse. Nature and evolution drive towards decentralized complex and adaptive systems where the survival is maximized, not guaranteeing the survival of a single agent but of the system as a whole.
There is a large and rich literature about CAS; however, generally all CAS present the same characteristics as described by Axelrod & Cohen(2001):
- Contain large number of elements
- No one element understands entire system
- Have rich interaction
- Operate in an open system, one of many — In an open system, each agent can influence a system. And each agent has the potential to initiate a new open system with a decision.
- Affected by positive and negative feedback loops — Feedback loops are cause-consequences scenarios. A positive feedback loop creates a positive environment for the agent to grow, a negative would produce the agent to eventually die.
- Operate far from equilibrium — A system is always evolving, which leads to innovation. A system that stays in equilibrium is a system condemned to die. Besides there are often externalities that disrupts the status quo.
- Any agent can influence and be influenced by other agents
- Demonstrate emergent behavior — In short is the adaptability of the system. When a certain practice does not work the system will find a way to get rid of it and/or improve it.
- Are unknowable and unpredictable
- Self-organize into patterns
- Can experience big change from small causes — Leverage effect/Butterfly effect. A seemingly insignificant action by one of the agents can trigger a chain reaction that may cause a big effect in another agent.
- Co-evolve with environment in nonlinear ways — Just like nature, evolves, these systems do too. Taking a business example, a google implements a new function in android operative system which is later improved upon by apple, then android takes those innovations and builds upon them. Each time making the other agents (companies) innovate and evolve.
- Operate best at the Edge of Chaos
- All systems are a function of their history
Many of these concepts may need an independent blog entry to be explained but this is just an introduction of the topic. The main takeaway point is that all agents are interconnected and all affect each other.
Adam Smith, Economics’ God and father of us all, theorized about the invisible hand. The concept that explains that humans (or rational humans) will act on their best interest like if they were led by an invisible hand and by doing so, by being selfish, the whole society is better off. So yeah, being selfish is good, but like everything in economics is relative.
The invisible hand might be in interpretation of the CAS that is the economy. Every agent is looking for their own self-preservation but in turn they are promoting the wellness of the system. Scaling down the scope of our CAS from the whole economy to a company or firm allows us to apply certain techniques or methods to improve the quality of our CAS. These techniques are called Robust Adaptive Strategies and the invisible hand powers many of them.
ROBUST ADAPTIVE STRATEGIES
As the name indicates these strategies are made to adapt to the changes in the CAS. When looking to increase your changes of success in an ever-changing environment your best bet is to change with it.
Think of the environment as a landscape and every decision or strategy you make is a peak within that landscape, the higher the peak the riskier and so on. This is called the FITNESS LANDSCAPE and it’s a popular tool with the cool companies like Apple and Google.
A business must explore different peaks and look to the future, allowing innovation to connect successes and making jumps from peaks to peaks safely and affectively.
Three of the strategies I learned in my MIS 301 course at UT were:
Always look for new ideas, push yourself to the limits of your “comfort zone”.
Deploy Platoon of Hikers
Have many different groups exploring many different alternatives, don’t be afraid of change, or innovation.
If there’s something we’ve learned with CAS are that the only thing to improve the quality of a CAS is to improve the quality of interaction between the agents, also we’ve learned that changes are pretty much sporadic and randomized, by increasing your research teams you increase your probabilities of finding a route to success faster than your competitor, or being able to predict where the new winds will come from or even being able to shape the future.
Mix Short/Long Jumps
Be comfortable with the idea that some projects will go slow and others will go faster. Some projects will be revolutionary and others will be just small updates. The combination of different types of “jumps” in your fitness landscape will help you to be more successful in the long run. Remember: Do not let a small defeat bring you down, the fight is not over until it’s over.
A good example of the combination of “jumps” is Apple. Every certain number of months they make small “jumps” in their devices, small updates: the iPhone 7, the next iPad, etc. Sometimes they also release a new product, sometimes it pays off wonderfully (iPod) other times it takes time to get traction (apple watch, apple music). Whatever the case is they always keep moving forward.
There are more RAS that can be used but they all come from the ideas that diversity is good, that you want to maximize you opportunities of success by exploring all the possibilities you can and that you should always keep improving and moving forward.
Remember that only at the edge of chaos (that fine line between stability and innovation) is where your business can grow. Finding this zone may take you years, but you must always try to reach it because a business that don’t grow is a business that dies.
So next time you see a movie or just start observing nature more carefully than usual, think about all those details you learn from it. So if you think all of this is just boring theory that may or may not work and that ants do not know all of this theory and are still extremely efficient…just keep in mind that ants don’t have any skyscrapers