Lessons from evolution and game theory

15th Mar 2017
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Nature is pretty brutal. Survival of the fittest is the norm. And, the fittest are those that are best adapted to the current set of circumstances and companies would be far better off figuring out what they need to do based on what they are good at.

It was when I was exposed to some serious science in high school that I first encountered clever questions like, “why are grass snakes green”, or “why do some butterflies imitate their poisonous cousins in terms of colour patterns and designs”. The answers, when we heard them for the first time, were most fascinating: “because, the grass snakes and butterflies have evolved to avoid being eaten by predators”. What was implicit in this explanation was that the snakes and butterflies somehow had a choice, and a role to play, in influencing this step in evolution. Later on, some of us figured out that grass snakes that weren’t green simply did not survive! The camouflage wasn’t by choice but by accident. The word 'because' is one of the most abused words in the English language, and has distorted the way we look at the world. Often, it reflects a false sense of confidence and arrogance, unless it is used with a lot of caution and caveat.

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A lot of what I encountered in leadership and management, during and after my management education, was full of similar question-answers. They were sufficiently intellectual and interesting to fascinate a student, but had the same shallowness. Slowly, I realised that the obsession with this 'because' and the implicit causation is so high, and so addicting, that even in the real world the same kind of question-answers drive the narrative in a lot of companies. Why is Amazon an innovative company; if only the old railroad companies had defined their business as “transport” they may have survived is what Theodore Levitt told us, and we were all gaping in admiration; why Akio Morita was such a great CEO (when Sony was doing well) and why he was such a bad one when Sony headed south!

I think analysts and business writers would be far more credible if they stop pretending they have it all figured out and stop implying, metaphorically speaking, that just because they have discovered that green grass snakes have the advantage of camouflage, they have got their colour by choice and others too could take a shot at it and become as invincible in grass by somehow changing colours. When the summer lasts a little longer in a year and the grass turns brown, maybe the green grass snakes would go extinct, and then the analysts would be saying how they couldn’t adapt to the changed conditions. They would also be telling us how important unlearning and relearning is to survive in this fast changing VUCA world!

Companies would be far better off figuring out what they need to do based on what they are good at, rather than wasting their time answering why Amazon is doing so well or why Google has been able to build such a culture.

There are some simple but very powerful lessons from the world of evolution and game theory. Let me try and list a couple of them and see how they can be applied in the real world.

 

  • Nature is pretty brutal. Survival of the fittest is the norm. And, the fittest are those that are best adapted to the current set of circumstances. Creating circumstances that are best suited to what you have is a near impossible thing. Adapting to the current circumstances by evolving suitably within a lifetime is equally impossible. However, what is possible is to find the right circumstances that suit your strengths. The right circumstances in a human context is almost always about the right job and role that one performs to eke out a living, stay relevant, and fulfill one’s Maslow hierarchy of needs. You can acquire new knowledge or skills fairly easily but rewiring your brain for something fundamentally different from who you are is nearly impossible. You are either creative, or you are not. Similarly, you are either analytical or you are not. You can acquire knowledge, skills and tools to hone your inborn analytical talent, but you are unlikely to ever become creative however hard you may try, if you are not. So, better find a place where your inborn talents are useful. Look for roles that play to your strengths. Continuously sharpen your strengths and build a base level of complementary skills that can leverage your strengths better. In short, don’t be at a wrong place. Find a place where you are the fittest!

 

  • Evolution is a continuous series of mathematical models played out within the framework of game theory. Some of the games are highly transient and some are stable for long periods of time. In nature, an altruistic game or strategy – where you are good with others irrespective of how others are with you – is unstable, and therefore rare. A reciprocal strategy, where you are good to someone who is good to you, and vice-versa, is a stable one. Similarly, a highly selfish strategy – where you think of your good irrespective of what harm it may cause others – is also very stable. A stable strategy is one where if a majority of a population plays that strategy, then anyone that plays a different strategy is bound to fail, whereas an unstable strategy is one where if a majority play that strategy, then if anyone plays a different strategy they are likely to meet with huge success.

Nature has no morals. Nature is just game theory playing out on scale. Individuals, companies, societies and communities that understand this principle well (even if it is an intuitive understanding) can drive change and solve difficult problems. Game theory drives how people behave in organisations – whether people collaborate or compete, whether people participate wholeheartedly in projects or behave as free-riders, whether people are political or apolitical, whether people are transparent or provide coloured and one-sided views. As a manager you can control the game and outcomes if you know what to reward and what to punish. If you can do that consistently you can get what you want. On a wider canvass, whether traffic comes to an orderly stop when the signal goes red, even if there is no cop around, or whether chaos prevails also depends upon the how the rules of the game have been defined in that society. A very high penalty, legislated and strictly enforced, can change the game. Richard Dawkins beautifully explains how the game theory plays out in nature in his The Selfish Gene. In short, acknowledge the reality of human behaviour (whose roots do not lie in morality but in game theory) and play the game by its rules to drive the desired outcomes.

Since most management literature focus on figuring out why great companies are great and how you too can go on to become great if you can do it their way, is it all a waste of time?

My answer to this is a nuanced ‘yes’. Anything that tries to explain complex phenomena (for example why Amazon has been able to innovate continuously or why South-West is the only profitable airline) is interesting but has limited practical use. You can never test it and you can surely never replicate it. The explanation too is always after the event.

In my opinion two genres of analysis are helpful:

  • Specific lessons on failures are more effective though they too have some limitations
  • Literature that addresses very specific problems or processes (on, say, how to hire better or how to build a better product spec) are helpful. They will help you do a few things correctly. One might ask, “Would this assure greatness?” No. But, the point is that greatness is always at an intersection of your personal (individual or company) attributes and opportunity, some of it being driven by chance and some in your steadfast belief that you are who you are and your best chance of success is confidence in who you are. And, not in the knowledge of how others achieved greatness.

(Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily reflect the views of YourStory.)

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