A story about ant colonies
Even when ants find a reliable food source, they will still task a part of their colony to explore for new resources. A certain number of ants will just peel off and continue to search for more.
This happens naturally. What’s interesting is that the more uncertain the environment, the more the ants will follow this behavior.
The metaphor that came to mind when I read this was: animal version of organized R&D.
Many animals have a tendency to stick with what is working. The ants however, are hedging their bets. They realize that what sustains them today might not last forever, so they commission a local R&D task force to keep exploring for more.
Tom Morgan’s the Invisible War (one of my favorite articles from last year) nicely captures what drives this behavior:
Essentially a more unstable environment requires more exploratory behavior so that the ants don’t get stuck with a single, depleted food source.
As the environment starts deteriorating, the exploration drive increases.
Somehow, they know.
In today’s world, having an ongoing form of ant R&D seems like a necessity. Rapid change is a telling feature of our time.
Take this as an example: the average lifespan of an S&P 500 company is projected to be only 12 years by 2027. In 1964, it used to be 33 years.
This is being driven by technological change happening at an unprecedented speed.
Theoretical physicist Leonard Mlodinow talks about the impact of this in his book, Elastic:
Today’s society bestows rewards as never before upon those who are comfortable with change, and it may punish those who are not, for what used to be the safe terrain of stability is now often a dangerous minefield of stagnation.
So how can we combine an ever-changing world with an R&D mindset?
Meet the Explorer
Common within Business and Sales teams are the metaphorical roles of “Hunters” and “Farmers”.
There’s another role I like to talk about: the “Explorer”.
Explorers go out on risky expeditions to identify new and promising paths. And they need to be able to decide which are the ones worth taking.
Explorers are wired to seek novelty. They need to be comfortable with uncertainty, but they also need to have vision and foresight.
This is something akin to the role of a Founder, Innovator, or Strategy Leader. Their job is to identify where change is happening and where the opportunities are. They then need to figure out how to pursue them.
You might be thinking that this setup makes the role of Explorers very risky — and you’re right. Many Explorers will fail or die while out on their R&D expeditions. But in the event of success, their discoveries pave the way forward for the entire group.
The Explorer role is necessary on a group level. But the paradox is that the job is highly risky for the Explorers themselves.
Here’s Leonard again on the role and risk Explorers take for the group:
Although an extreme proclivity for adventure and exploration may result in a reduced life expectancy, the group’s overall survival may be increased by the presence of these pioneers. Why? Because the individual bears the risk of dying. But if they succeed and find gold, the rest of the group will benefit and survive. So the population’s overall chance of survival is increased by the presence and risk-taking of these pioneers.
When the risky expeditions succeed, the entire group achieves outsized rewards.
How is this dynamic built into business strategies?
Payoffs in early stage Venture Capital
You can think of early stage venture capital strategies as ones that invest in high-risk, high-return experiments. I will oversimplify to make a point.
The venture capitalists are the financiers taking a bet on an Entrepreneur’s expedition. And although these expeditions are incredibly risky, betting on enough of them improves the odds that one —or a few — will return with gold.
What makes it risky is that the payoff structure is asymmetric. There is a high level of risk and uncertainty, as you don’t necessarily know which one will pay off. And the value generated by a few big wins is expected to generate profits that make the entire operation worthwhile.
This behavior is counter-instinctive because we are wired to avoid loss. But as you begin to see the logic behind the approach — and understand that you need to finance enough expeditions — it starts to make more sense.
You keep playing to try and hit a few bullseyes, and when you do, it more than pays for the misses.
Apparently the behavior is genetic. Introducing… DRD4
In Elastic, Leonard Mlodinow continues by talking about how the Explorer gene is actually present in all of us. It’s called DRD4 (dopamine receptor gene D4).
So as a species, an attraction to the new and unfamiliar has actually been built into our genetic makeup. Everyone has some form of the gene, but to different degrees.
People with the higher form of the gene are more likely to explore and take chances. There have even been studies that trace this back to ancestorial migrations.
The motivation to explore new ideas and places can also be found in people with ADHD.
One could also view it [ADHD] as tailor-made for today’s turbulent and changing environment. The point of view is supported by an interesting theory, which states that we evolved ADHD as an adaptation to the demands of change. when we lived as nomadic hunter-gatherers.
All of us have a greater or lesser propensity to explore or exploit, to wander or to focus.
An internal conflict at play
What I find liberating about the exploratory mindset is that it provides space for creativity and discovery. It forces us to think about the future. But we also live in a world of current pressure and concrete targets.
So how do we reconcile the two?
As businesses, I guess this is why it’s important to see Innovation and R&D as parts of the whole; they serve the long-term interests of the entire group.
This can be difficult for leaders who are oriented around and need to justify results in the short-term.
But without new discoveries, there may no longer be future opportunity. And in a world where change is happening so fast, and company lifespans reducing, it might be worth asking how we can sustainably incorporate the R&D mindset into our teams and strategies.
Just ask the ants. They’ve learned how to do it.
Fun fact: the term for novelty seeking is neophilia.
Resources:
Elastic by Leonard Mlodinow
Tom Morgan: The Invisible War
FT Advisor: Tech will be changing the S&P rankings
Nice read Firas!
Well done Firas!