Last week we promised to dig a little deeper into the two primary mistakes—killing most experiments too soon and not killing off the vampires soon enough. Today we will address the first mistake.

Evolution Wins Because Evolution Doesn’t Care

Well, that is the problem for us as business managers. Evolution generates random variations and lets the environment select the winners.

In business we have difficulty matching evolution’s dispassionate process for several challenging reasons:

• Evolution runs thousands of variations each generation. In business we can develop and test only tens or maybe hundreds of variations each generation.
• Evolution has a very low cost for each variation. In business our cost for each variation can be significant.
• Evolution does not care which variation wins. In business we care about which variations succeed.
• Evolution succeeds even when an entire species fails. In business we fail when our business fails and each of us cares passionately about the success of our individual business.

Let’s address the two easy differences first.

Evolution generates thousands of variations, at an extremely low cost per variation. Evolution actually produces nothing but variations. Every individual organism is one more variation for the species. Unit cost and individual variation are inextricably linked. Evolution has designed its production process to generate individual variations as an integral part of the operation.

In direct contrast, since the industrial revolution we have driven human manufacturing processes to produce high volumes and low cost by eliminating variation. For over one hundred years we have driven manufacturing processes to reduce variations down to parts per million.

Fortunately in the past two decades we have begun to shift from a mass production model to a mass customization model, which begins to look a little more like evolution.

As one example, print-on-demand technology has lowered the cost of small-volume book production so much that a publishing run of one single book is now economical. This technology extends the life of low-volume books, but even more important it makes possible production of completely custom books, written and produced for a market of only one person or one event.

The most extreme approach to mass customization is to give the customer the capability to design and produce exactly the product that the customer wants.

Build-a-Bear has built a hundred million dollar business providing components for stuffed bears to children, who then construct a completely custom stuffed animal for themselves. The company has integrated the production process into the consumption process and the customer creates the variation as an integral part of the production process.

Using this approach for books, print-on-demand technology becomes not the source of the customization, but only the last step in creating a unique printed product that the customer has designed individually.

Among other new companies, Giftventure exemplifies the use of print-on-demand for mass customization. Giftventure provides a number of characters and puzzles that the customer can use to build a custom adventure for a child. Giftventure delivers the artwork electronically to a print-on-demand house near the consumer, and delivers the final printed adventure by mail.

Variation Checkup

• How does your customer participate in your product design?
• How does your customer participate in your production process?
• How do you integrate mass customization into your own product designs?
• Can your customer make a completely unique version of your product?
• How does customization affect your production costs?

When Caring is a Negative

Evolution does not care about an individual organism; it does not even care about an individual species.

Fundamentally, we care when particular variations fail and we care when our business fails. Quite simply, this difference is insurmountable.

This topic is one of the most fundamental challenges for business leadership.

Please join us next week when we will explore how our desire to succeed directly causes us to kill most experiments too soon, and how that same desire to succeed prolongs the life of the vampires—those experiments that should have died long ago, but keep coming back to life in every budget cycle.

This entry was posted on Tuesday, November 4th, 2008 at 4:30 am and is filed under Innovation, Personal Growth. You can follow any responses to this entry through the RSS 2.0 feed.
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