“Just as growth is an integral part of life, equally so are ageing and death. The fact that almost everything dies plays a central role in the evolutionary process because it allows new adaptations, designs, and innovations to emerge and flourish. From this viewpoint, it’s not only “good” but also crucial that individuals, whether organisms or companies die—even if they themselves may not be quite so joyous about it. This is the curse of consciousness. We all know we are going to die. No other organism is burdened with the enormity of the conscious knowledge that it has a finite lifetime and that its individual existence is eventually and inevitably coming to an end.” – Geoffrey West, Scale
I had a splendid conversation with the former director of The Santa Fe Institute and author of “Scale: The Universal Laws of Life and Death in Organisms, Cities and Companies”, Geoffrey West. The 4-part series is available anywhere you get podcasts and on YouTube. One of the many thoughts the book and discussion with Geoffrey sparked is how companies become necrotic. Necrosis is the death of body tissue. It occurs when too little blood flows to the tissue. This can be from injury, radiation, or chemicals. Necrosis cannot be reversed. When large areas of tissue die due to a lack of blood supply, the condition is called gangrene, such as when an explorer experiences sub-zero temperatures and their extremities become frostbitten.
But how does a company become necrotic, how does it die?
To understand this, we can find hints in nature and in the natural course of life itself. Growth cannot happen without a continuous supply of energy. When we eat, our bodies metabolize fuel and transport metabolic energy to our cells, where some energy is allocated to the repair and maintenance of existing cells and some to replace those that have died, and some to create new cells to help us grow. Eventually, however, at a specific point in our lifecycles, we stop growing and we stabilize at a certain size. At birth, almost all of our energy is devoted to growth and relatively little to maintenance, whereas beyond maturity it is devoted to maintenance, repair, and replacement.
Now, let’s take this sequence of events as the template for how growth occurs in a company. As with an organism, at birth and in the early years, almost all the energy is directed into the growth and stabilisation and eventually maturity of the company. The collective energy generated by startup founders and early hires is apportioned to the development of new business models, hiring new people and developing and marketing the startups’ products and services.
However, once the company is mature, energy is inevitably assigned to the maintenance of the status quo and the entropy (or waste product) of growth. The bigger the organisation, the more entropy. In a large company, entropy comes in the form of bureaucracy, processes and procedures that are deemed necessary. The energy that might be used for growth is now used for maintenance. This is the bane of many corporate innovators who have to expend energy on bureaucratic, administrative and regulatory processes in order to focus the remaining energy on growth.
In large bureaucratic organisations, those kept alive by government bailouts, state-run organisations or indeed some semi-states almost all of the energy is depleted by maintenance, while little or none remains for meaningful growth.
I worked in one such organisation. If you have done so too or do so today, you will be familiar with those groups of people who behave like tumorous growths throughout the organisation. They spread toxic energy like cancer attacking the corporate body and they target burgeoning growth tissue (in the form of new ideas and any meaningful change initiatives) in particular. This has a profound impact on the life of an organisation. Tumours are parasitic and feed on metabolic energy derived from their host. Corporate tumours are those groups of people who deplete the energy so badly needed to grow the organisation.
As a founder, you may have inadvertently hired one of these tumorous people. You have witnessed how they sap an inordinate amount of your personal energy, the very energy you need to grow your organisation. This problem multiplies as an organisation scales, creating more entropy and as a result more occasions for corporate tumours to bed in.
How Can We Keep Companies Alive?
Yes, we should reinvent and innovate, but what does that mean scientifically or even physiologically? It means injecting new energy into the system at increasingly faster rates in the form of new ideas, new business models and new people. The latter is the difficult part as this means cutting the cancerous growth and removing the tumours. This is painful work because they are often dug in like ticks and they can do a lot of damage during their forceful exit. The status quo, by its very nature, does not give up without a fight.
Should we keep companies alive, and should we prolong life, even human life?
Maybe we should let nature take its course? As Geoffrey West tells us if some companies didn’t die perhaps we great innovators would have worked for those companies. We need the death of some companies to spark others to life. That thought reminds me of a quote by author Peter Steinhart, that I share in my book, “Undisruptable”: “Death is nature’s way of making things continually interesting. Death is the possibility of change. Every individual gets its allotted lifespan, its chance to try something new on the world. But time is called and the molecules which make up leaf and limb, heart and eye are disassembled and redistributed to other tenants.”
Maybe companies should eventually die, like all forms of life?
Was Peter Drucker right? “There is nothing as difficult and as expensive, but also nothing as futile, as trying to keep a corpse from stinking.”
THANKS FOR READING and THANK YOU GEOFFREY WEST