Thinking in terms of systems and understanding how living organisms work can go a long way toward understanding the business world in times of change.
Definitely, the vision of organizations as systems is increasingly penetrating the business world, even when their understanding as living organisms is still in the embryonic phase. Systems thinking has gradually been incorporated into the universe of the company, gaining some strength with the publication by Peter Senge of the Fifth Discipline.
It is understandable that the mechanistic vision of the operation of companies continues to prevail over the systemic approach, since the educational system from Kindergarten to PhD continues to educate people to analyze the world from a static and fragmented perspective, while reality is completely dynamic and systemic.
It is fascinating to see the way in which humans have, intentionally or unintentionally, shaped the business world in such a way that it is assimilated into an ecosystem. From a very general perspective, ecosystems are made up of a “non-living” environment and “living beings”.
We could say that in the "Business ecosystem" this conformation is reproduced, where companies are living beings, of different types and sizes, that interact with each other and with the environment to help maintain the balance of the system.
From this perspective, micro-enterprises are like the microorganisms of the ecosystem, and like these they generally have an ephemeral life. Small businesses, also large in number, can be likened to small organisms in the ecosystem such as insects, small birds, small reptiles and smaller mammals. Their life is usually rather short.
There are also the medium-sized companies that can be considered as the medium animals of the ecosystem, which generally reach longer life spans. And finally there are the great companies that are the great living beings and that usually have long lives. Similarly, there is as much variety of companies as species of animals. Hence, this multiplicity of companies are related to each other and to the environment in a similar way to the way in which relationships occur within a natural ecosystem. Everything that happens tends to maintain the balance of the system, since this guarantees the survival of the species that are part of it. This means that the function of each organism within the system is just as important as that of any other for the conservation of the ecosystem,and this can be extrapolated to the case of companies in the business world.
An example of this may be the relationship that exists in the fashion industry between the big brands, the maquilas and the small satellite workshops that the latter use in certain cases. When the big brands exert strong pressure to reduce costs on the maquilas, they transfer it to the satellite workshops, taking advantage of the fact that, due to their large number and necessity, they will generally find some who work for them under those conditions.
Obviously those that cannot adapt to this condition disappear. "Law of supply and demand". But if the pressure becomes so strong that it exceeds the cost limits of all satellites, these will practically be extinguished, causing the situation to be reversed.
This happens, because nowadays the big brands can no longer be competitive without the maquilas, and these in turn without the satellite workshops, which means that the system always tends to balance and all the participants in the chain remain. Obviously in this process there are individual casualties, but as a “species” - the big brands, the maquilas and the satellite workshops - each one manages to survive and the ecosystem to endure. It can be said that “the ecosystem” regulates itself through permanent supply and demand adjustments.
Putting the focus now on companies, we can say that companies, regardless of their type or size, have a life cycle that goes from gestation to disappearance, just like living beings.
Its permanence in time depends on the vision with which organizations are gestated and on the way in which the cycle of constant changes that are intended to keep them in balance is managed. Depending on the vision that the founders have, companies will have a predisposition to be micro, SMEs or large companies, and their type will also be defined by that vision.
That is why the development that a company created to employ its owners and to meet their immediate needs will have is very different from that of an organization that is born with a transcendent character. The change that one and the other generate in the world is very different, although that does not mean that the existence of both is not necessary for the survival of the system.
Large institutions such as Ford, Sony or Citibank have become what they are and last for generations thanks to a vision that has transcended in time.
Ford (early 20th century)
"Democratizing the automobile"
Sony (early 1950s)
"To become the company best known for changing the poor-quality image of Japanese products in the world."
Citibank (1915)
"To become the largest, most powerful and most serviced financial institution that has existed in the world."
Surely the corner workshop or the neighborhood store does not even have vision, which is why their duration in time is usually so short and usually they do not go beyond being a micro-business.
The former are transcendent businesses while the others are for mere survival. This explains why companies have such different developments, potentially having the same opportunities.
Organizations that are born to be great make decisions that eventually lead to them, no matter if they are born as a micro-business. Likewise, companies that are born to be microenterprises make decisions that never let them go from there. This does not mean that companies cannot evolve, but that is not the most common, because it means a change in the sense in which they understand themselves, and this implies reaching a different balance than usual.
That explains why small businesses, which have impressive “sudden” growth, disappear or deflate in a short time. Their growth was surely aided by a special circumstance, but the mindset with which they ran and managed them was appropriate for companies of a different scale. This means that the destiny of a company in the "Business ecosystem" is determined by the vision of the people who make it up.
Collins and Porras. "Build the Vision of your Company." Change management. Harvard Business Review. 2000. pp. 31 - 72. Editorial Deusto.
