The Power of Gradual

Res Extensa #45 :: What evolution can teach us about building systems

Nature accomplishes mind-boggling complexity through tiny adjustments, survival, and time. Genetic propagation pushes some creatures to levels of specific fitness for their environments that seem straight out of science fiction. No direction, no goal, no "designer" — simply a bubbling stew of chemical compounds and interacting forces, working to match organism to habitat. Nature is replete with extraordinary examples.

The baron caterpillar disappears into the surface of a leaf:

The spider-tailed viper adapted its own foolproof bait:

And various species of cephalopod perform acts indistinguishable from magic:

The possibilities for complex solutions are boundless with organic adaptation and patience.

Now I don't want to strain the metaphor here, but what can we learn from this about growing a company? Companies exist in a complex ecosystem, just like a caterpillar or squid. A swirling environment (the market) of interactions (decisions, transactions) they must resist or harness to survive and, hopefully, thrive. In our companies we don't have the luxury to operate on the multi-millennia scale of nature's "survival of the fittest”, but I think the point is still profound: gradual change finds the best solutions, and creates the most resilient, adaptive ones.

Gradual change favors small effective bets, deployed and validated iteratively. Each minor adjustment loops feedback into the system to inform the next idea or change. Losing small bets lets you learn from mistakes, with the time to adjust and survive. Make the bets too big, too unfounded, or too overengineered, and you may go extinct.

Living organisms have a hierarchy of needs to survive and prosper: water, food, shelter, and adaptation. In rough order, each is survivable for longer periods. But eventually, Mother Nature will consume.

We can make the analogy to an organization: it needs talent, customers, revenue, adjustments, and corrections. Without these things, appearing in roughly this order, an organization faces its own extinction.

At each stage in the hierarchy of needs, if the prior phase isn't working, you've got to go back and figure it out. With a talented team, a product prototype, but no one interested in using it, you've got to change your product. If you've got talent, some users loving your product, but can't figure out the go-to-market fit, the approach to sellability needs some adaptation. Complex solutions flow from functional, simple ones.

This sort of gradual build → test → iterate scheme is how every complex system in the universe works. The primary difference in an organization of humans is that we have the agency to adapt — to tweak the "organizational DNA" — on demand. A rodent struggling to deal with a newly-introduced species of predator has little choice but to adapt through generational failure — certain variations die out, the well-adapted survive. Our companies don't have to die to evolve. We have the ability to tweak the ingredients in real-time.

Organizational culture accumulates the same way. Management teams set big goals and make wishful claims about "changing the company culture", as if it were a thing to be edited like a document. But organizations are complex systems, and only ever achieve lasting change through gradual assembly. Your org's culture is a result of thousands of decisions layering on each other over time. I like Ben Thompson's framing: specific culture "choices" don't result in success. Rather, your decisions that end up successful modify the culture:

Culture is not something that begets success, rather, it is a product of it. All companies start with the espoused beliefs and values of their founder(s), but until those beliefs and values are proven correct and successful they are open to debate and change. If, though, they lead to real sustained success, then those values and beliefs slip from the conscious to the unconscious, and it is this transformation that allows companies to maintain the "secret sauce" that drove their initial success even as they scale. The founder no longer needs to espouse his or her beliefs and values to the 10,000th employee; every single person already in the company will do just that, in every decision they make, big or small.

Decisions (successful, useful ones) accumulate, company culture builds up like strata of rock.

I believe it's not appreciated how much business success is a function of deft traversal of stepping stones: the result of opportunistically muddling through. For all the “Great Man” theories of visionary founders laying out upfront multi-decade goals and executing on them, I think this is mostly post-hoc hagiography (even if the individuals and their achievements are impressive!). Most of these cases saw a company responding effectively, at the right scale, to shocks and changes.

The most durable, “antifragile” businesses are ones that found their way to product-market fit through a gradual process of building, deploying, and adjusting. Over the expansion trajectory of the business, when they experienced shocks, they made decisions they’d never planned to make 5 years earlier. They reacted to stimuli in the environment, bobbing and weaving their way to the success we write books about years later.

The larger and more successful you get, the bigger in scope your experiments can get. The danger in expansive, complex experiments is the tendency for biases to creep in — confirmation bias, loss aversion. Good money is thrown after bad. The company starts struggling to keep alive an "adaptation" that isn't surviving the environment.

A series of experiments pursued gradually can be reversed without an existential crisis. Two-way doors, not one-way doors. The company doesn't get married to preconceived notions about how to reach goals; it reacts to the visible, predictable scope of the landscape ahead and adapts accordingly. Gradual change is lasting change.

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