快猫短视频

NO ONE doubted that the NeXT workstation, the brainchild of Apple Computer
cofounder Steve Jobs, was technologically superb. The hyper-chic-looking machine
was easy to use, had multimedia capabilities and was far more advanced in many
ways than its competitors. Yet Jobs鈥檚 brilliant creation, launched in the late
1980s, failed to penetrate the lucrative market for workstations and languished
as a curiosity, cherished by only a few devotees. Despite its technological
superiority, NeXT was a commercial failure.

It was a similar story when Digital Equipment Corporation launched its Alpha
chip in 1992. The company justifiably boasted that it was the fastest
micro-processor in the world, outpacing its nearest rival by more than a factor
of three. But few buyers appeared. The Alpha is still ahead in the race for
speed, being twice as fast as Intel鈥檚 popular Pentium chip. But despite a
mammoth marketing effort, the Alpha has captured just 1 per cent of the
high-performance processor market compared with Intel鈥檚 92 per cent.

Take a third case. An exotic seed-eating bird is introduced to the highland
forests of Hawaii. Yet despite being superbly adapted to this new environment,
the bird fails to establish itself. What, you might ask, does the bird鈥檚 fate
have in common with the tales of commercial woe? 鈥淓verything,鈥� says Stuart Pimm,
an ecologist at the University of Tennessee in Knoxville. 鈥淵ou are dealing with
system-level effects.鈥� In all three cases the newcomer is kept out by the
dynamics of the system it is trying to invade.

The notion of using ecosystems as a metaphor for 鈥渂usiness systems鈥� might
seem bizarre. After all, the ideal company has long been thought of as a
smoothly running machine driving to specified goals under the direction of an
all-knowing, all-controlling chief executive officer (CEO). Yet in an article on
the fast-paced world of high-technology companies published last year in the
Harvard Business Review, the economist Brian Arthur made great play of
the word 鈥渆cosystem鈥�.

The same word crops up on the cover of one of the bestselling business books
in the US, The Death of Competition, which carries the subtitle:
Leadership and strategy in the age of business ecosystems. 鈥淟eaders who learn to
understand . . . ecology and evolution will find themselves equipped with a new
model for devising strategy, and critical new options for shaping the future of
their companies,鈥� writes its author, James Moore, a business consultant in
Cambridge, Massachusetts.

Fundamental truths

Even the oh-so-conservative Wall Street Journal recently carried an
article by John Baden of the Foundation for Research on Economics and the
Environment, with the following revolutionary statement: 鈥淲hen we understand
that the economy is an ecosystem鈥攏ot a machine isolated and insulated from
the environment鈥攚e grasp fundamental truths about what makes the economy
飞辞谤办.鈥�

Something is apparently changing in the world of business. The metaphor of
companies as species鈥攆eeding on customers鈥� money and interacting as if in
ecosystems鈥攂rings some important changes. First, CEOs will have to get
used to thinking about their companies not as machines but more like organisms
living in communities, which changes the nature of their economics. Second, CEOs
will have to realise that they have much less control over the fate of their
companies than they have liked to believe.

This change in the way business leaders view their world bears a striking
parallel to recent changes in the thinking of ecologists themselves. At its most
basic, it is a shift away from viewing the world as simple, predictable and
settling to equilibrium; to acknowledging that it is complex, unpredictable and
far from equilibrium. It is also a shift away from seeing head-to-head
competition as the key force shaping business or ecological communities. Other
factors鈥攕uch as predation and population fluctuation鈥攃ombine with
competition to generate emergent patterns in the community. 鈥淭he behaviours of
such systems are unpredictable and often counterintuitive,鈥� says Pimm.

Traditionally, if an ecosystem crashed or behaved otherwise unpredictably,
ecologists took refuge in the comforting phrase 鈥渢he balance of nature鈥�.
鈥淓cologists didn鈥檛 deny that complex dynamics exist in nature,鈥� says Pimm, 鈥渂ut
they explained them as the result of genuinely unpredictable factors in the
external world, such as fluctuations in climate.鈥� Today, he adds, ecologists are
starting to see unpredictable behaviours as properties that emerge from the
complex internal dynamics of the ecosystem itself.

One such emergent property is the ability, already described, of an
established ecosystem to repel an invading species even if it is competitively
superior to its potential rival within the community. The network of connections
between the species of the mature ecosystem protects those species from outside
competition. 鈥淭he potential invader has to be very much more competitively
superior if it is to surmount this system-level effect,鈥� says Pimm, who is a
theoretical ecologist as well as a welly-boot wearing fieldworker. He has seen
such effects many times in ecosystems simulated in a computer, and in real
habitats in Hawaii.

Successful invader

鈥淢ore species of birds and plants have been introduced into Hawaii than
anywhere in the world,鈥� says Pimm. 鈥淏ut there are two separate ecological
worlds. There鈥檚 the highland region, which is still pristine, with native plants
and birds that have formed a tight network of connections over a long period of
time. Relatively few species have successfully invaded here. And there鈥檚 the
lowland region, in which human settlement has disrupted established communities
and made them vulnerable to invasion because the ecosystem network is poorly
蹿辞谤尘别诲.鈥�

Pimm鈥檚 description of what it takes to be a successful invader of ecosystems
is echoed with eerie similarity by Arthur, when he comments on the commercial
failure of NeXT: 鈥淎 new product has to be two or three times better in some
dimension鈥攑rice, speed, convenience鈥攖o dislodge a locked-in rival.鈥�
Again, a network of connections in the form of usually informal alliances
between key companies, such as Microsoft, Hewlett-Packard and Intel, repelled
the invader. A similar technological ecosystem excludes Digital鈥檚 Alpha chip
from gaining a foothold. The Alpha has been saved from commercial oblivion only
by the recent agreement under which Intel will manufacture the chip under
licence from Digital.

Another emergent property of an eco-system is its food web鈥攖he pattern
of interaction between species within the community. Food webs involve primary
producers, herbivores, carnivores and so on. In short, they describe who eats
whom. Not so long ago, ecologists believed there to be an infinity of food web
patterns, because of the many possible combinations within a community of even
modest size. Not so. 鈥淭he remarkable thing about food webs is that they have
just a few major characteristics,鈥� observes Pimm. These include the length of
the food chains鈥攁 progression of who eats whom from the bottom of the food
web to the top鈥攁nd the ratio of predator species to prey species. 鈥淵ou see
common patterns wherever you look,鈥� adds Pimm.

Unpredictability appears because these simple patterns can support such
complicated networks of interdependence that it becomes difficult to forecast
the outcome of simple changes within the community, such as the successful
invasion of a new species. 鈥淪ometimes the community may be affected very
little,鈥� says Pimm. 鈥淥ther times it might cause cascades of local
别虫迟颈苍肠迟颈辞苍.鈥�

The intellectual shift in ecology, then, is one of deeper understanding of
how the real world works: it is a whole lot more complex than was once realised.
In business, the shift is of both perception and reality. The business
equivalent of food webs are economic webs. These describe patterns of which
companies do business with which other companies, and how.

鈥淭he way to think about economic webs is in terms of niches around some kind
of activity,鈥� says Arthur鈥檚 colleague at the Santa Fe Institute, Stuart
Kauffman. 鈥淚n the days before the automobile, transport centred on the
horse-drawn carriage, which required wheelwrights, blacksmiths, saddleries,
wayside inns, and so on.鈥� That ecosystem has now gone. 鈥淲hen automobiles
arrived, a whole new ecosystem coevolved, requiring paved roads, gas stations,
motels and so on.鈥�

In today鈥檚 fast-moving, high-technology economy, the networks of interactions
within economic webs are more complex than they once were, and they change more
rapidly, too, as companies break old alliances and form new ones in their quest
to thrive. The manoeuvrings of Microsoft and Netscape in their struggles to
dominate the Internet is a good example.

Opening salvo

While web thinking鈥攐r ecosystem thinking鈥攊s only now emerging in
the business environment, some already see it as the way of the future. For
instance, John Hagel of the management consultants McKinsey and Company wrote an
article last year in the company鈥檚 quarterly journal, which he titled 鈥淪pider
versus spider鈥�. Web thinking, he said, 鈥渕ay even represent the opening salvo in
the transition from industrial-age to information-age thinking鈥�.

The reality of complex economic webs changes the way companies plan for the
future. 鈥淲eb strategies turn traditional strategic thinking on its head,鈥� says
Hagel. 鈥淭he conventional approach dictates that firms first define their own
strategy and negotiate alliances that are consistent with this strategy and
advance its aims.鈥� By contrast, web strategy asserts that CEOs must decide which
webs (or ecosystems) to participate in, or to form, and what role to play in
them. 鈥淚n other words, firm strategy follows web strategy,鈥� Hagel argues. Intel
and Hewlett-Packard have embraced web strategy but they are, as yet,
pioneers.

Two other business theorists, Adam Brandenburger of Harvard University and
Barry Nalebuff at Yale, describe the new business world in a different way.
鈥淢ost businesses succeed if others also succeed,鈥� they say in their influential
book published last year. Competition is part of the picture, of course, but far
from the only part. Cooperation and building mutually beneficial networks are
important, too. Brandenburger and Nalebuff describe this joint strategy with the
borrowed term 鈥渃o-opetition鈥�, which is also the title of their book.

For many traditionalists in business and economics, it鈥檚 this death of
old-style, head-to-head competition as the number one route to success that will
be hard to swallow. But that鈥檚 scarcely surprising, because the idea goes way
back to the 18th century and the theories of Scottish economist Adam Smith.
Smith argued that if individuals are left free to pursue their selfish
interests, patterns of economic activity would emerge that would serve the
greater good鈥攇uided, he said, 鈥渁s if by an invisible hand鈥�.

Almost a century later, Charles Darwin incorporated Smith鈥檚 thinking into his
theory of natural selection. The core of the theory is that individuals act in
their own interests, from which the evolutionary patterns we see in the world
arise. Competition in this context includes whether one species or another will
dominate in an ecosystem. The invisible hand at work again, but in the
biological realm.

Earlier this century economists returned the compliment. They embraced the
Darwinian metaphor and raised the notion of survival of the fittest through
bitter competition to the level of a business law. Ironically, they apparently
believed that their business law was inspired by laws of nature, when it was
really just Smith鈥檚 economic theory dressed in biological clothes. To double the
irony, just as Thatcherism was elevating competition to dizzying new heights in
1980s Britain, ecologists were engaged in a fierce debate over whether
competition really was the all-powerful force that Darwinism held it to be.
After the feathers settled, there emerged a view of the world in which
competition was left as just one of many factors that shape ecological
communities.

This new view, translated once again into the business environment, still
allows companies to benefit from 鈥渟pecies level improvement in the Darwinian,
self-centred sense鈥�, says Moore. But this is of limited value in the longer
term. The more important challenge is to create opportunities and adapt to
changes in a complex network of other companies that may sometimes be
cooperators, sometimes competitors, and sometimes both at once. In other words,
competition as we know it should be allowed to die.

Increasing returns

Just as the idea of economic webs is forcing companies to change their
business strategies, so it is altering views about economics. Mainstream
economic theory has its roots in the smokestack industries of the Industrial
Revolution, based on the production of commodities such as coal and iron. One
aspect of this, formalised in the late 19th century by the English economist
Alfred Marshall, says that the more coal you dig, the more you are forced to
exploit less favourable resources, and so the return for your effort is reduced.
Add to this that you are competing with other mines in the same predicament, and
prices are squeezed downwards towards the average cost of production. This
effect, known as diminishing returns, became a central pillar of modern
economics.

Today, says Arthur, a different economic phenomenon is in evidence, which he
calls increasing returns. 鈥淚ncreasing returns are the tendency for that which is
ahead to get further ahead,鈥� he states. 鈥淚f a product or a company or a
technology鈥攐ne of many competing in a market鈥攇ets ahead by chance or
clever strategy, increasing returns can magnify this advantage, and the product
or company or technology can go on to lock in the market.鈥� As a result, a
company can make a killing from a product that is not as good as its
competitors鈥�. This is a system-level effect, where the inferior product survives
and thrives because it is linked to many other products in the community, thus
excluding competitors. Increasing returns would not and could not happen in
Marshall鈥檚 world of perfect competition.

According to Arthur, one of the best examples of increasing returns is DOS,
the Microsoft disc operating system for personal computers. Although widely seen
as inferior, it nevertheless came to dominate the market. In the early 1980s,
DOS was one of three competing operating systems, along with CP/M and Apple鈥檚
Macintosh system. CP/M was already well established when its competitors
arrived. DOS was born from some clever manoeuvrings by Bill Gates, which
included a deal to supply IBM with an operating system for its PC. Apple鈥檚
operating system, unlike its two text-based rivals, introduced the public to the
user-friendly notion of icons.

Within the personal computer ecosystem, IBM and Apple established separate
networks of committed users and software suppliers that wrote to DOS or
Macintosh standards. Crucially, IBM did not stop other firms building 鈥渃lones鈥�
of its PC. The number of PCs mushroomed, all of them supported by DOS. As a
result, DOS became the 800-pound gorilla in the marketplace, Apple thrived (for
a while at least), and CP/M went extinct. The bottom line is that although the
theory of increasing returns predicts that one system is likely to lock in
eventually, it cannot predict which one it will be.

The parallels between business systems and ecosystems are intriguing, but how
useful are they for trying to understand the dynamics of business networks? If
the similarities between the two worlds are superficial鈥攎ere
metaphor鈥攖hen the answer is 鈥渘ot very鈥�. But if business systems and
ecosystems have something fundamental in common, the parallels could provide
powerful insights. So do such commonalities exist?

Yes, argues Moore鈥攂ut that鈥檚 not to say the two systems are precisely
the same. 鈥淧eople make decisions in business communities, consciously trying to
take advantage of their position in the ecosystem,鈥� he points out. That doesn鈥檛
happen in biological ecosystems, so differences are inevitable. Pimm is less
equivocal. He argues that business systems and ecosystems are both examples of
the mathematical entity known as a complex dynamical system鈥攁nd as such
share characteristics such as emergent properties and unpredictability
(鈥淲hat if. . . 鈥�, 快猫短视频, 13 July, 1996, p 36).
For him, the ecosystem perspective reflects a fundamental similarity.

If he is right, there is some disconcerting news for CEOs. 鈥淭he first rule of
complex systems is that it is almost impossible to predict who is a friend and
who is an enemy,鈥� says Pimm. He describes field experiments in which a predator
is removed from a community. You might expect its prey, species A, to thrive.
But about half the time species A suffers because the predator has another prey
species, B, which is A鈥檚 competitor. With the population of species B no longer
kept in check by the predator, it may even push species A to local
extinction.

鈥淭hese effects are only one or two steps into the network,鈥� says Pimm. 鈥淕o a
few more steps and it becomes almost impossible to work out possible
combinations of harm and good.鈥� In business ecosystems, CEOs face the same
problem of deciding who is a friend and who is an enemy and how this might
change as the environment changes. And the bad news doesn鈥檛 stop here. 鈥淲hen
everything is connected directly or indirectly to everything else, changes in
one part of the system may be propagated throughout the system,鈥� says Pimm.
鈥淪ometimes species may go extinct through no fault of their own.鈥�

Illusion of control

To CEOs who are used to at least the illusion of predictability and control,
this is all distinctly unnerving. There is a phrase popular among
high-technology companies, coined by a leading scientist at Xerox鈥檚 Palo Alto
Research Center, that captures this spirit: 鈥淭he best way to predict the future
is to invent it.鈥� This gung ho attitude, says Moore, is doomed to failure. 鈥淲e
know from studying complex systems that prediction in any conventional sense is
not possible,鈥� he warns. 鈥淣ot in biological ecology鈥攁nd not in business
and social ecology.鈥�

Moore believes that the business world is starting to recognise the ecosystem
nature of the economy, and to respond. 鈥淭he effective leaders I meet are the
ones who are prepared to let go of the illusion of control,鈥� Moore says. 鈥淎nd
that鈥檚 a good thing, because in reality they have no choice.鈥�