What We Learned in the Rainforest: Business Lessons from Nature

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What We Learned in the Rainforest presents a surprising new business principle: by applying strategies and practices gleaned from nature-by emulating what it once sought to conquer-business can adapt rapidly to changing market conditions and attain greater and more sustainable profits. With clear, direct language and dozens of real-world examples, Kiuchi and Shireman show how a company can become a complex living system that doesn't merely balance competing interests but truly integrates them.

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One Feedback

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LESSON ONE:
USE LIMITS TO CREATE VALUE—CLOSE THE LOOP

IN THE RAINFOREST, nature uses feedback to “close the loop.” In the face of limits, feedback triggers adaptations that lessen or make an end-run around physical constraints.

IN BUSINESS, companies like Coors use feedback to “close the loop,” triggering innovations that lead to new products, processes, businesses, and profits.

Skydiving is the perfect antidote for a high-stress job. It gives you total release. When you look down and realize that you are free-falling, straight for the ground, at 120 miles per hour, all your senses are fully engaged. There is little opportunity to dwell on corporate strategy, balance sheets, or day-to-day family issues.

When people skydive, all their five senses must be operating effectively. Imagine, for example, that during this particular dive over Costa Rica, we had no sense of sight or hearing—just a sense of touch.

With only a sense of touch, after we stepped from the airplane, we would feel the rush of the wind against our faces; we would sense great movement and exhilaration. It would be very exciting. The only problem is that we would not be able to see the ground, so we would have no way of knowing that we were descending rapidly toward it. We would not even know that we were falling. Thus the ground would have no impact on us at all, until we reached it. Then, it would have a significant impact.

 

Two Information

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LESSON TWO:
REPLACE PHYSICAL RESOURCES WITH INFORMATION—AND LEARN TO DO MORE WITH LESS

Physical resources decline with use: The more you use, the less you have. But information resources are regenerative: The more you use, the more you have. That is why, in the rainforest and in business, information beats scarcity. As limits are approached, living systems adapt. Information becomes embedded in their structures, rendering them more efficient and effective. That is the advantage information has over fossil fuels: The more we use it, the less likely we are to run out.

The two of us—Tachi first, then Bill—exited through the open door of the airplane, and began our fall to the ground. As we did, our feedback systems—our senses of sight, sound, smell, touch, and even taste—were all operating at peak performance. It occurred to us that free falling from over two miles above the ground must not be, in evolutionary terms, a typical human experience.

At first, the ground seemed distant, and our approach to it slow. But after a minute or so, the ground seemed to begin rushing toward us, and we realized it was time to do something about it.

 

Three Profit

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LESSON THREE:
CREATE MORE THAN YOU CONSUME—USE LIMITS AS A SPRINGBOARD TO ABUNDANCE

IN THE RAINFOREST, limits are a positive force. They trigger innovation and set in motion a sequence of changes that lead to the creation of abundance—net gain.

IN BUSINESS, too, limits are a disciplining force that channel action toward the creation of value—net profit.

As we continued our fall and reached a point about one mile from the ground, all we could do with the technology we had on our backs was use the parachute to slow our fall. This was just fine for us—getting to the ground and walking away were our top priorities.

But we noticed that the birds could do more with less physical equipment than we had on our backs. They could not only slow their fall, they could reverse it and increase their elevation. They had learned to fly.

This observation became particularly interesting a few moments later. Tachi’s parachute caught the wind, opened into a full canopy, and began carrying its passenger gently down. By contrast, Bill’s parachute started to flip wildly in the wind, failing to catch the air or slow his fall in the least. In an instant, Bill passed Tachi in the race to the ground, but it was not a race he really wanted to win.

 

Four Design

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LESSON FOUR:
CREATE PROFIT BY DESIGN

IN THE RAINFOREST, innovation emerges from the complex relationships that bind together the physical resources and living things that constitute it. Each design in nature yields specific qualities unique to that design. Net gain is created, in essence, by structure, by design.

IN BUSINESS too, profit is created by design.

Wings would be useful at this point, we thought, when Bill’s chute failed to open. Or at least, we might have thought this had we been in a reflective mood. But we were too highly focused to permit much broad introspection, at least at first.

To slow our fall and land softly on the ground, or even to reverse our fall and fly through the air, we needed nothing more than what we had with us, physically—which was more than the birds needed. The birds were smaller and lighter than us; their brains were less developed, and they would not have comprehended in the least what we pretended to know about aerodynamics. Yet they had a capacity that we envied.

 

Five Innovation

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LESSON FIVE:
MAKE PRODUCTS BETTER, AND MAKE BETTER PRODUCTS

IN THE RAINFOREST, there are two paths to innovation: The first, breakthrough innovation, creates prototypes to be replicated. The second, continuous improvement, adapts designs to meet local conditions.

IN BUSINESS too, the two paths to innovation are linked, one leading to the other. Breakthrough innovations reveal new synergies—new capacities that were beyond our reach before. Continuous improvement hones these capacities toward perfection, and creates the diverse parts that can combine in new, breakthrough wholes.

Because the parachute slows our fall without fundamentally changing our direction we could call that continuous improvement. The ability to fly, if we could develop it quickly, would be a breakthrough innovation. However, if the ground were not below us, we would have no need for either. We could continue to fall through the sky forever, never bothering to pull our ripcords to slow our fall or look to the birds and wish we could fly. So, in a way, it’s good that the ground is beneath us. Limits are essential catalysts to evolution and change.

 

Six Diversity

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LESSON SIX:
DIVERSITY = CHOICE = RESILIENCE

IN THE RAINFOREST, diversity brings choice, and choice brings resilience and sustainability. Each diverse species is designed to excel in a particular niche—to carry out its functions there more efficiently or effectively than any other.

IN BUSINESS too, diversity gives a company a greater choice of tools and capacities—just what it needs to grow more efficient and more effective, to get more from less.

In our jump from the airplane, we each had only one kind of technology at our disposal. If this technology didn’t work, we would have been out of luck.

But what if we could have chosen from any number of technologies: a parachute, a hang glider, an airplane, or even learning to fly?

Diversity promotes sustainability simply because diversity is choice. The more diverse the organisms in an ecosystem, the more types of resources are available to deal with any challenge and the greater the likelihood of success.

W. Ross Ashby articulated that view back in 1958, when he studied gene pools and biological adaptability and composed his Law of Requisite Variety. Ashby’s law states that “the survival of a system depends on its ability to generate at least as much variety within its boundaries as exists in the form of threatening disturbances from its environment.” In other words, the survival of any system—organism, person, company, or community—depends on its ability to adapt to challenges. If the number of challenges that it faces is even one greater than the variety it can overcome, then when faced with that challenge, it cannot survive. But while diversity is fundamental in the long term, it can involve conflict in the short run, especially when diverse elements are first thrown together in the same niche and before they have been integrated to create new wholes.

 

Seven Succession

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LESSON SEVEN:
LEARN THE FOUR PHASES OF SUCCESSION—INNOVATION, GROWTH, IMPROVEMENT, AND RELEASE

IN THE RAINFOREST, to create all kinds of value successfully, nature follows a simple management strategy. Through the process of succession, every complex system cycles through four phases: innovation, growth, improvement, and release.

BUSINESS also cycles through these phases and in the process creates the same types of value. Breakthroughs begin the innovation phase. That leads to growth by replication, which, at its limit, triggers continuous improvement. And that creates the surplus needed to support new breakthroughs, renewing the cycle.

The act of skydiving is, in a way, a high-speed metaphor for the phases of a person’s life. Stepping from the plane, for example, is like birth: One is “thrown” out there, into the air, into life. The free fall is a bit like childhood and adolescence—a time of freedom to explore in comparative safety, while you’re far from the ground. Preparing and opening the chute is adulthood—assuming responsibility and thinking and planning, in increasing detail, for the speed, path, and manner of your descent. Now—to avoid the sudden onset of the fourth phase—your competence really does matter.

 

Eight Management

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LESSON EIGHT:
MAXIMIZE TOTAL PERFORMANCE—
MASTER THE FOUR PHASES OF MANAGEMENT

IN THE RAINFOREST, nature creates diversity and abundance over the course of the four seasons of succession.

IN BUSINESS, companies can maximize profits sustainably by mastering the four seasons of management.

If, at the initial failure of Bill’s parachute, we had focused on a comprehensive redesign of the technology, so that such events did not recur, it is unlikely that we would have been able to complete the necessary modifications, and have them installed, in the 60 or so seconds remaining before Bill hit the ground.

When managing, you must know what phase you are in, and which quality will be of greatest immediate value during that phase: the intuitive innovation of the creation phase, the exuberance of growth, the meticulousness of improvement, or the focused attention induced by the prospect of imminent disintegration.

Know the four seasons in the cycle of succession, master at least one, and excel in them all. This offers two distinct advantages. First, these four phases teach you how to develop and achieve the objectives you desire and to discover possibilities and potentials that you may never have known you had. Second, they will bring you greater mastery of business and life and the increased success and fulfillment that can come along with it—continuous improvement, as you hone your intrinsic capacities, and personal breakthroughs, as you discover the richness within you.

 

Nine New Tools and New Values

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LESSON NINE:
GATHER THE TOOLS TO CARRY OUT BOTH PLANS—
THE ONE INSIDE AND THE ONE OUTSIDE
.

IN THE RAINFOREST, life flourishes when it has the tools to follow its inner plan—the one in the seed of every living thing—AND adapt to the outer plan—the one defined by its environment.

IN THE ECONOMY, too, a business needs tools to follow its inner plans, AND adapt to its total environment.

When Bill’s parachute failed to open, we began to ponder the nature of planning, and the curious ways that, in the face of new circumstances, our plans often change. For example, Bill’s free-fall path through the sky was not the result of one plan, but the convergence of two very different plans. First, Bill’s plan, which was to slow his fall to the point that he could land gently and join Tachi and our colleagues to explore the rainforest. Second, nature’s plan, which seemed to involve propelling Bill with great force into the rainforest, in a manner that would have compelled further changes in our plans.

To carry out Bill’s current plan, rather than nature’s, we needed tools. Our parachutes. Our emergency chutes. The hands and arms we would use to release them. And especially, the wisdom to use them in ways that would harness nature, align her plans with our own, and carry us safely home.

 

Appendix I The Future 500

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The Future 500 is a global network of leadership companies whose mission is to apply principles of nature to improve the performance and sustainability of business.

Rather than the old business-as-machine model, we see the business as a living ecosystem. We diagram the business ecosystem as a set of five concentric circles. Each circle represents one of the living systems that, in a healthy business ecosystem, support and are supported by the business. The core circle represents the company’s enduring purpose and its leadership. This core is nested in its workplace, community, marketplace, and environment. Each circle both transcends and includes the circles within it.

We develop and apply business tools based on principles of nature. Our member companies take traditional business tools-in management, accounting, and communications, for example-and redesign them so that they more effectively apply principles of living systems. For example, applying principles of feedback, we provide accounting tools that can track costs throughout the five spheres of the business ecosystem. Applying principles of succession, we provide management tools that maximize performance through all four phases of the business life cycle. To create value-by-design, we provide tools in engineering and industrial ecology that substitute resources with information. To wire together the whole business ecosystem, we provide communication tools that help assure that each level of the business ecosystem supports every other. Our tools are developed by leading management and accounting firms that have joined together as Future 500 Partner Members.

 

Appendix II Future 500 Tool Kit

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The Future 500 Tool Kit is provided to members of the Future 500, through manuals and how-to guides. Here, in summary form, are some of the performance tools described in greater depth in the Future 500 Tool Kit.

Many of these tools are the purview of firms such as Deloitte & Touche, Hewlett-Packard, and Manning Selvage & Lee. Bob Jonardi of accounting and assurance firm Deloitte & Touche, for example, works with the Future 500 to provide tools that allow a company’s social and environmental performance to be scrutinized alongside its financial track record. Joe Gleason and Charles Banks-Altekruse of Manning Selvage & Lee provide communication services in a corporate accountability framework, utilizing practices such as cause-related marketing.

Hewlett-Packard’s E-Solutions unit provides technologies that increase total productivity of energy, resources, and labor, and their World e-Inclusion technologies help developing cultures leapfrog consumptive industrial stages of development, through electronic products that enhance social and economic opportunities without uprooting whole cultures and traditions in the process. Pitney Bowes provides document management services that can eliminate the use of the paper and related cost and resource consumption.

 

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