The secret sauce for successful business

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What is that secret sauce in business? That illusive holy grail, that if discovered would provide all the answers. Is there value in learning to adapt, based on low cost, low risk experiments? When is failure not a bad thing?

Wouldn’t it be wonderful if all you had to do was watch a few clips online, listen to selected podcasts, read some articles and ‘bingo’, you have a successful business? In an increasingly complex world, things are not black and white, yet to understand things, we are sometimes forced to see things that way.

If there was one dominant ingredient in the recipe for business success, then it would be learning how to adapt. Adaption comes from the ability to notice what the competition may have missed, to stay agile, lean, avoid putting on too much weight, by cutting down on ‘quick fixes’ the corporate sugar high, from cheap fizzy sodas.

Some of the best insights about business come outside the domain of management. Charles Darwin, the biologist, who trained to be an Anglican clergyman changed our world view, thanks to his observations on the survival of the species. To paraphrase his words: It is not the most intelligent, or the strongest that survives, “it is the one that is most adaptable to change.”

Mastering paradox

Real world problems are more multifaceted than we think. Paradox of adapting to change is to realise that success comes from failing. Testing what works and what does not, this goes against the grain of the ‘always right manager’. After all you don’t reward failure in the ritualistic archaic annual performance appraisal.

Some of the best insights on experimentation come from Peter Palchinsky- a Russian engineer who began his explorations in the time of the last Tsar, before the Russian Revolution of 1917, before the creation of the former Soviet Union.

In essence, Palchinsky’s principles are: One – seek out variation, new ideas and try novel approaches, Two – when trying new things, design the experiment so that, if one fails it is survivable and Three- seek out feedback, and learn from the mistakes.

Value in correcting mistakes

It is no coincidence that one of the world most successful companies whose services you likely use mirrors the Palchinsky principles. Google with annual revenues of $278 billion in 2022 models itself on the freewheeling experimentation of Stanford University graduate school life, where the founders first met.

Catch is that the companies we work for are not Google. It’s fine on paper to suggest that we should experiment, embrace failure, learn from our mistakes. Yet how realistic is that? Failure, mistakes cost money and causes embarrassment. Who has the time to fiddle around experimenting with things that have a very high probability of going belly up?

Why should one experiment? “It is because the process of correcting the mistakes can be more liberating than the mistakes themselves are crushing, even though at the time we so often feel the reverse is true” notes the economist, Tim Harford. In other words, the value created through the process of mistake correction is greater than the value lost in the initial mistake. That’s value creation.

Yes, mistakes in business are costly. But the cost of not experimenting, not being agile, adapting is even greater, and will inevitably lead to extinction. Falling prey to what the economist Joseph Schumpeter called: creative destruction.

Some of the smartest people one meets never went to university. There is a tendency to put too great a value on paper qualifications. In sub Saharan Africa, Kenya is known for its enterprise and creativity. At times this looks like a chaotic traffic jam caused by a few noisy matatus, whose operating principle is get ahead, jump the queue. Yet out of this chaos, entropy, disorder emerges a creative solution that came out of being stuck.

In the theory of innovation

This include efficiency, and sustaining approaches, it is the disruptive innovations that are the job creating game changers. You can’t have these leaps of imagination without disrupting one’s thinking. Being courageous enough to feel stuck and uncertain and say: What if we are wrong?

Sometimes you need to put your mind in reverse. After all: would you buy a car without a reverse gear? Cognitive dissonance refers to the minds difficulty of holding two contradictory thoughts. Yet, many would describe that as a sign of intelligence.

Identifying the secret sauce, starts with seeing differently. Look at a tea field, iridescent green in the morning sun. But adapt, look carefully, soon you may notice the fifty shades of green.

David is a director at aCatalyst Consulting. [email protected]