Collaboration, Adaptation and Risk: Innovate or Die

Collaboration, innovation and risk are all intrinsic to adaptation. Without adaptation, every system eventually perishes once conditions change.

One feature of capitalism that is rarely discussed is the premium placed on cooperation and collaboration. The Darwinian aspect of competition is widely accepted (and rued) as capitalism’s dominant force, but cooperation and collaboration are just as intrinsic to capitalism as competition. Subcontractors must cooperate to assemble a product, suppliers must cooperate to deliver the various components, distributors must cooperate to get the products to retail outlets, employees and managers must cooperate to reach the goals of the organization, and local governments and communities must cooperate with enterprises to maintain the local economy.

Darwin’s understanding of natural selection is often misapplied. In its basic form, natural selection simply means that the world is constantly changing, and organisms must adapt or they will expire. The same is true of individuals, enterprises, governments, cultures and economies. Darwin wrote:"It is not the strongest of the species that survives, or the most intelligent, but the ones most adaptable to change."

Ideas, techniques and processes which are better and more productive than previous versions will spread quickly; those who refuse to adapt them will be overtaken by those who do. These new ideas, techniques and processes trigger changes in society and the economy that are often difficult to predict.

This creates a dilemma: we want more prosperity and wider opportunities for self-cultivation (personal fulfillment), yet we don’t want our security and culture to be disrupted. But we cannot have it both ways. Those who attempt to preserve their power over the social order while reaping the gains of free markets find their power dissolving before their eyes as unintended consequences of technological and social innovations disrupt their mechanisms of control.

Yet rejecting free markets also fails to preserve the power structure, for a citizenry denied the opportunity to prosper chafes under a Status Quo that enriches Elites and relegates the masses to stagnation and poverty.

The great irony of free-market capitalism is that the only way to establish an enduring security is to embrace innovation and adaptation, the very processes that generate short-term insecurity. Attempting to guarantee security leads to risk being distributed to others, or concentrated within the system itself. When the accumulated risk manifests, the system collapses.

The core dynamic of free markets is the causal links between the free movement of labor and capital, transparent markets, innovation, risk and adaptation. Every attempt to eliminate risk, hinder the flow of capital, rig markets and limit disruptive adaptation leads to stagnation and eventual collapse as the inefficient, wasteful and corrupt elements of the economy absorb all the oxygen, starving the system of investment, innovation and initiative.

We can follow Darwin’s observation that "It is not the strongest of the species that survives, or the most intelligent, but the ones most adaptable to change,” with a corollary: Eliminating risk eliminates the possibility of successful adaptation.

We can go even further and suggest adaptive advantages are correlated to innovation and risk: the lower the risk, the lower the odds of innovation and the lower the advantages gained.

Adaptation--what we call innovation--is thus a dynamic series of trade-offs between many low-risk experiments that yield marginal losses and gains and occasional high-risk experiments that raise the stakes but which may yield game-changing innovations.

There are lessons here for jobseekers and entrepreneurs alike: playing it safe limits potential losses but it also limits potential gains. Collaboration, innovation and risk are all intrinsic to adaptation. Without adaptation, every system eventually perishes once conditions change.

This is heart of the phrase innovate or die.

Gordon T. Long and I discuss innovation and collaboration in this 32-minute video Learning to Innovate: