I’ve been involved in a few of conversations recently that shared the same, negative theme. They were with executives and consultants who bemoaned the conservativeness of investors and industry leaders and their reluctance to back innovative ideas, especially novel commercial ideas. The general tenor of their remarks was critical, implying a lack of competence in senior management in the life sciences industry. Since this seems quite a pervasive theme in our industry, I thought you might like an alternative, Darwinian view. Stick with me and I promise you will find this useful.

Those who propose innovative, sometimes radical changes to commercial practice in the life sciences often sound like they are sighing. Their tone and language exude frustration and vexation. They imply, and sometimes state outright, that the reason their proposals aren’t adopted is an embedded cultural bias against innovation and new ideas. The corollary of their criticism is that the problem lies with our industry in general and its villainous, laggard leadership in particular. By extension, little or no blame can be attached to the innovative proposers, who are the wronged heroes of this story. Well, when a phenomenon as complex as business model change is explained by such a simple, clear-cut story, it should evoke a healthy scepticism and a search for a better, fuller, version of the truth. And that’s what evolutionary science gives us.

Any business model that has been sustained for more than a few years is, in evolutionary terms, a success. It must have a reasonable level of ‘fitness’, in the sense that it fits with its market environment well enough to survive. Equally, any evolution of that business model must, to be successful, also fit with its environment. In the evolutionary landscape, both old and new business models occupy ‘fitness peaks’ because they have a significantly better fit with their environment than other similar but not identical business models. The difference between them is that the old model fits with the past environment while the new one fits with the future environment.

The danger of business model change lies in the journey from one fitness peak to another. This journey usually involves a reduction in fitness. In other words, the journey from one successful business model to another is via a valley of death, where your business model fits less well with the market environment. This ‘valley of death’ metaphor explains why so many corporate transformations fail and why leaders are so reluctant to make the journey.

But evolution does happen, in both biological species and business models. So the journey through the valley of death must be possible, right? Well, not quite. In the fossil record, we see transitional species like the Tiktallik, a primitive fish species that is a bridge between fish and four-legged land species. Tiktallik was successful in its own right. Indeed it had to be so that its descendants could evolve into land animals. In other words, biological evolution didn’t make the journey down one side of the valley of death and up the other. It built a bridge across the valley so that it didn’t have to risk extinction. To put it another way, successful fish species evolved into successful land animals via Tiktallik without a significant decline in fitness.

And we see an analogue in successful business model transformation or less radical innovations within existing business models. Good leaders somehow manage to keep the business successful whilst making the transition. You have probably heard this in the metaphor, often used by leaders, that ‘we’re trying to rebuild the plane while it’s still flying’. The mechanics of this feat of leadership are complex and too long to describe in this short column. They involve understanding the relationships between the old and new market environments, the differences between old and new markets and the relationship between them.

So what are the practical implication of this more sophisticated view of how change happens? There are three. First, it implies that evangelists for change should stop villainising those leaders who don’t grab onto their proposals. Those leaders are at least partly justified in reluctance to march their company down into the valley and, after all, it is their fiduciary duty to manage risk. Second, it implies that those evangelists should change tack and refocus their passion. Instead of extolling the sunlit uplands of the new model, they should focus their attention on what the bridge, the transitional model, might look like. Third, it implies that all of us should remain sceptical of nice, simple hero-and-villain explanations of why change is so hard. Seriously minded people should look for a more complex, more realistic understanding of organisational change. That understanding is hard to come by. It requires open minds, serious thought and a knowledge of evolutionary science. It is much easier to sigh, simplify and villainise. But it is much better to question, think and understand.