Friday, May 23, 2008

The Red Queen Hypothesis ... Part I ... Activities

The Red Queen Hypothesis is used in Genetics to describe why systems need to constantly adapt in order to remain competitive. Formally, it is stated thus:-

"For an evolutionary system, continuing development is needed just in order to maintain its fitness relative to the systems it is co-evolving with."
(Leigh Van Valen, 1973, from wikipedia)

I want to describe this effect in terms of business, however to do so we need to first look at how business activities change. Let us start by examining the use of CRM.

The concept of CRM (customer relationship management) systems was an innovation back in the 1980s. However as everyone sought to exploit this new concept, CRM became far more ubiquitous and well defined. The activity has undergone a metamorphosis from innovation to leading edge to product to even utility services. This is not an unusual event, as there is always a constant pressure towards commoditisation of any activity as everyone tries to take advantage of any innovation (see figure 1).

Figure 1 - The metamorphosis of CRM.
(click on image for larger size)

In figure 2, I've mapped this transition on a graph of ubiquity (how common something is) vs certainty (how well known or defined something is).

Figure 2 - A graphical representation of the transition of CRM.
(click on image for larger size)

The transition of an activity from an innovation to something ubiquitous and well defined (or more commodity-like) is fairly standard. Most activities (whether processes, sub process or the results thereof) are in a continuous state of transition.

Organisations consist of a mass of activities, and those activities exist somewhere on that graph. The activities are all connected and you can even map this out. However, for the time being I've provided a representation of an organisation in figure 3 in graph form.

Figure 3 - Activities in a organisation
(click on image for larger size)

Whilst these activities are at different stages of their lifecycle, they are all undergoing a metamorphosis from innovation to commodity. This transition is independent of the organisation itself, as an activity becomes common when others adopt it.

All organisational activities are therefore in a constant state of flux.
Now, I'll use this concept in the next section to explain the Red Queen Hypothesis and its application to business.