"Recession-time" Leadership Advice from the Bees ?? - Part 1

Let me begin this blogpost with one of my favorite old sayings about leadership...

“Rough waters are truer tests of leadership. In calm water, every ship has a good captain.”

We have some rough waters ahead of us as the complexity of the 21st century continues to grow... The physicist, Stephen Hawking was absolutely right to call the 21st century as the century of complexity! In this blogpost, I call out two distinct leadership lessons to be learned from our scientific research into the bees - by modeling them as complex systems that have to survive for long periods of time (bees have been around for over 120 million years) under uncertain environments and discuss real-life examples of how some corporations have incorporated them. Here is the first one...

Explore vs Exploit

In complex systems, optimizing for very specific output variables like profit margin is fraught with peril - at risk is the long-term viability of the corporation. The following will resonate only if you treat businesses as “infinite games”. You play the game to stay in the game: To do some good to the society & humanity - solve problems…

But, if you are currently making decisions in order to optimize for things like short-term revenue or profit margin, then this interesting fact about the bees ?? might give you some food for thought...

Bees have their own signaling mechanism (aka 'waggle dance') by which they communicate which direction & how far away is the nectar/pollen.

What’s interesting is that about 20% (interestingly, it increases with the level of uncertainty of their environment) of bee journeys ignore those signals and go off in random directions.

But, the Queen Bee doesn’t stop them and demand to meet or improve the quarterly nectar production targets (efficiency). You might think that in the millions of years of evolution the bees would have attained an efficiency that’s better than 80% ??

This type of (risky) behavior just baffled researchers for quite a bit - but only until they modeled it as a ?????????????? ???????????? ???????? ????????, ???????????? ???? ???? ?????????????????? ??????????????????????.

If 100% of bees accurately followed the signals, they’ll get trapped in a local maximum and when their environment changes drastically (a 'black swan' event - e.g. cows clearing out all the flowers of their only garden) the hive eventually starves to death. Watch Rory Sutherland explain this elegantly as the "exploit vs explore" dynamic in this video:

Corporations with established business lines, try to stay too much in "exploit" mode trying to scale those businesses and don't "explore/experiment" much. The thing about experiments is that many of them fail. Well, if you already know that it is going to be successful, then it NOT an experiment in the first place. But here is the deal - there'll be one experiment that might end up being a jackpot (e.g. AWS for Amazon) that more than takes care of other failures.

Even if 99.9% of the random bee journeys don't have any ROI, that'll be compensated when one bee stumbles upon a massive sunflower field. That's the evolutionary lesson that bees have learned about surviving in complex systems over long periods of time.

The focus on short-term efficiency (profit margin) is extremely detrimental to the long-term viability of the corporation. And more importantly, we have become too risk averse (with a focus on full-utilization of all resources at all times) at the level of the individuals and teams in our corporations. Local efficiencies doesn't necessarily guarantee global effectiveness - therefore the whole system suffers in the long-term. More on that in part 2.

Even at the societal level, we need more tolerance for failures and long-term bets (Bezos had to protect AWS from the pressures of the core business). If you are a shareholder, the pressure for “quarter-over-quarter revenue/profit increases” might not play out well in the long-term. If you are an aspiring?entrepreneur,?now is a good time to start a business - a lot of good talent is back in the market.

Real-world Examples:

Google's '20% projects' is a well-known example, though I've not dug into its current status. There are many corporations like Apple and Amazon, which have continued to maintain/improve their innovation as they grew in size as an employer. As Jeff Bezos put it,

“We need to plant many seeds… because we don’t know which one of those seeds will grow into a mighty oak.”

Let me also give you a more recent example... Brian Armstrong , the CEO of Coinbase , explains their resource allocation model that shows their 'exploit vs explore' percentages in this blogpost:

We use a 70/20/10 resource allocation model where we invest 70% of our resources in our core business, and 20% in strategic efforts, we also ensure 10% of our resources are always going toward ambitious new bets.?

(Note: I don't necessarily agree with everything in that blogpost. For starters, I'd replace "efficiently" with "effectively" in the title. But, that's a completely different blogpost - let me not digress.)

This whole approach may sound counter-intuitive or irrational or risky, but think about it - the best way to come out of a recession is through innovation. And there is no innovation without experimentation.

Here’s to more exploration, experiments, trial & error and tinkering ??

I'll end this post with a quote by Stafford Beer, the father of Management Cybernetics:

“To be wrong slashes variety; one thing the scientist knows full well is that, in experiments, it is just about as useful to be wrong as to be right. Both outcomes attenuate variety, until the search homes onto the answer that we seek.”