Business Evolution is More Important Than Business Revolution

Forget Revolution, It's All About Evolution

So many entrepreneurs think they have some revolutionary innovation or even a revolutionary approach to entrepreneurship. Some of these people are right, but most of them are misguided.

I am here to tell you that most companies that succeed are evolutionary, not revolutionary. Beginning with Yahoo, which was an internet index at its beginnings, and Google, which was a search optimization tool, these companies have evolved beyond belief in what products and services they offer as well as how much revenue they can generate.  

I was fortunate enough to see the evolution of West Publishing first hand. The company, which had been around since 1872,  started to step away from legal books and began using the internet to publish their legal materials online in the mid-1990s, eventually selling the company for over $3 billion (back when a billion was a lot of money).

Sticking Around

How are they able to do it? Staying in business allowed them to evolve over time. Ensuring that operations continued helped these businesses to survive and thrive, shifting the focus of their business plans to different products and industries. This evolution cannot happen, though, unless the companies continue to keep the lights on and operate every day. That is why your first mission as an entrepreneur is to ensure your business survives to the next day.

Paper and Production

A great example of an evolutionary company is one of my former competitors in the phone business, Nokia. Nokia was founded in 1865 as a Finnish paper mill, a far cry from where the company is today. In 1922 Nokia expanded their offerings and entered into a partnership with Finnish Rubber Works and Finnish Cable Works. In 1967, these businesses continued to evolve, merging and creating the new Nokia Corporation. From a humble beginning as a simple paper mill, the new business was restructured and divided into four major businesses; forestry, cable, rubber, and electronics. The company was not done changing either, in the early 70s, it entered the networking and radio industry and also started making military equipment in 1983.

Nokia today is a vastly different company, with technology as its cornerstone, from its inception in 1865. They produce things like commercial mobile radios, telephone switches, capacitors, and chemicals. More recently, the company has pivoted to mobile phones and mobile games (they sold their phone division to Microsoft in 2014 for $7.2B), working to become a major player in the telecom industry and producing network equipment.

Evolution and Revolution

Another example which shows the importance of evolution is General Electric, an evolutionary business that was at the forefront of a technological revolution. The company really started with ties to Thomas Edison's first laboratory, which opened in 1876. By 1890, four companies fell under the umbrella of GE: a lamp manufacturer, a dynamo and electric motor manufacturer, a fixture and lighting device company, and a patent holding company, which was then merged into Edison General Electric company in 1889. GE was also one of a handful of companies involved in computing in the early 60s, continuing their evolution as a business. 

The multinational conglomerate now operates in a wide range of industries, with business units operating in many verticals, including; energy, aviation, healthcare, transportation, capital, and digital. Their biggest impact might have been on the radio and television industries, with the founding of the Radio Corporation of America, RCA. 

The Costs of Revolution

RCA was a revolutionary company that, unfortunately, did not stand the test of time. Despite helping to create media revolutions in radio and television, there were several unsuccessful forays into other industries, such as movies and consumer products, which helped to doom the company. They did not stick to their core competencies and tried to create a revolution, instead of focusing on growth and patient evolution. Eventually, the company was acquired and sold off, unable to sustain the revenues necessary to continue both its evolution and revolution.

Stay Alive and Thrive

You need to evolve in order to create a revolution. You can have revolutionary ideas, but innovations tend to be evolutionary. Do not attach your happiness to that outcome. See past it. Enjoy the pursuit and the journey of being evolutionary, and you too could come up with a big idea that eventually becomes a powerhouse company like GE and Nokia. Surviving today and pushing forward to tomorrow makes it possible to have revolutionary ideas that can change a 150-year-old business in a matter of days. 

Let's remember, in order to be revolutionary, you have to be evolutionary. Stay in business and continue to evolve. If you do, everything will come to you in the right way at the perfect time.