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We like to keep up to date with issues on the interface of business and the environment.  Please let us know if there are any topics you would like to see our thoughts on.

Biology and Business

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The financial crisis has reminded people that business and economic systems are not simple.  Each individual element, like a company’s results or a loan, may be forecastable to some extent.  But the collection of millions of elements adds layer on layer of complexity.

 

Man business people instinctively liken this to the complexity of the natural world, talking about business ‘ecosystems’.  This term was first applied to businesses by James Moore in a 1993 Harvard Business Review article, describing a business ecosystem as “An economic community supported by a foundation of interacting organizations and individuals—the organisms of the business world.”

 

Now, business leaders are finding even closer parallels between the biology and business, and using them to help make sense of their business environments.

 

The prominent ecologist, Bob May, joined forces with the Bank of England’s Executive Director for Financial Security to construct a model of the banking system based on the principles of natural ecosystems.  This resulted in a paper ‘Systemic risk in banking ecosystems’ in the science journal Nature(1), including policy lessons to minimise the risks based on the new understanding provided by the biological analogies.

 

In his book ‘Smart Swarm’, Peter Miller identifies several more ways that businesses have benefitted from understanding animal behaviour.

    •  Southwest Airlines finding the quickest way for passengers to board a plane, based on the way

       insects behave individually to simple rules, but achieve co-ordinated results

    •  Air Liquide optimising its production and delivery, based on the self-organising principles of ant colonies

    •  Electronics retailer Best Buy harnessing collective wisdom to make accurate predictions, in a similar

       manner to bees predicting which will be the best site for a new hive

    •  Boeing achieving a vital increase in testing throughput by bringing together a diversity of individual

       knowledge, again like bees.

    •  Massive Software revolutionising the production of crowd scenes in films, like Lord of the Rings, based

       on the simple rules that create complex behaviour in flocks of starlings.

 

It’s clear that biological thinking provides new ways of tackling some types of business problem.

 

We are keen to find more examples where biology helps business – if you spot one, let us know and we’ll add it to the list.

 

Here are some additional examples:

    •  Maths used to model natural systems reveals the interconnections between the 1318 most influential

       global companies, from the Swiss Federal Institute of Technology, reported in New Scientist.

    •  Part of the Theory of Evolution, Multi-Level Selection Theory (MLS), used to predict the behaviour of

       organisations and individuals within organisations – with useful implications for management.  

       Covered in the Journal of Economic Behavior & Organization and summarised in New Scientist.

 

 

(1) Systemic risk in banking ecosystems, Nature 469 January 2011.  Reports for more general audiences in the Guardian and a Radio 4 programme .

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