Change is necessary to survive and grow

The UK must transform traditional, slow-moving firms into fast-track, agile companies, writes Charles Orton-Jones

There’s a beautiful concept in biology called the “Red Queen effect”. It is named after Lewis Carroll’s Red Queen in Through the Looking Glass, who tells Alice: “Now, here, you see, it takes all the running you can do to keep in the same place.”

In evolution, the Red Queen effect states that animals must improve just to stay where they are. Even sharks, which at 450 million years old predate trees by 80 million years, have changed. They have refined their immune systems, eyes, skin texture and muscle composition to cope with similar improvements in prey and predators. They have mutated into new subspecies. Superficially they are the same as they were in the Ordovician period, but in fact they are iterated upgrades, mere simulacra of their ancient selves.

Speed in adaptation is vital. The Red Queen effect explains the emergency of sexual reproduction, as it allows for greater mutability and thus faster rates of adaptation to new challenges.

The parallels with business are obvious. All firms must improve incessantly just to stay where they are. And even more, they must be able to cope with radical new challenges. In a word, they must be more agile.

Agile means able to cope with change. To be able to redesign products, target new markets, alter price strategies and even leap from one industry to another where necessary. Just as dolphins once walked the Earth on hooved feet before wandering back into the briny sea, firms like BT move from telecoms to sports broadcasting to stay relevant.

HOW TO STAY AGILE

The software industry is a good place to look. Here the word agile has a special meaning. Agile software development eschews the long-term fixed planning once thought vital. Instead, agile developers form small, self-organising teams who produce prototypes as fast as possible, then use customer feedback to refine again and again. The 2001 Agile Manifesto, written by 17 maverick software developers in Snowbird ski resort, Utah, runs to just a few lines.

All firms must improve incessantly just to stay where they are

It says we should value: “individuals and interactions over processes and tools; working software over comprehensive documentation; customer collaboration over contract negotiation; responding to change over following a plan”. This preference for action over thinking keeps projects rattling along.

Interpretations on this agile manifesto include Scrum, Extreme and Adaptive. Each has a unique twist on the basic premise.

KINGS OF AGILE

So how are businesses agile in practice? To learn, you need to enter the boardrooms of our best firms and be nosey. For example, Net-a-Porter is one of our outstanding dotcoms. Founded by Natalie Massenet in 2000, it thrived through the first dotcom boom and bust, has seen off innumerable lookalikes and diversified from women’s high fashion to men’s, with the launch of Mr Porter, and recently took the unexpected leap into print with Porter magazine. The firm now employs 2,500 staff, with a tech team of 300.

It’s agile all right. So how seriously does the firm take the idea of being agile?

“Agile is at the heart of everything we do,” says chief information officer Hugh Fahy. “We are fully agile end-to-end. Not just that we follow the ‘Scrum ceremonies’, as people call them. The tech team are embedded in the business, sitting cheek-by-jowl with other teams. We try to recreate the spirit of a startup. Short, snappy, iterative styles mean you’ll get something your customer wants.”

When Mr Fahy wanted to develop a mobile app, he went for an incubator-style approach. Customer ideas were fed into the development process, so the app would take into account all their many desires, such as Instagram integration. “That’s how we do our revolutionary work,” he says.

New technology is vital for improving agility. Mr Fahy is a big fan of cloud services as they offer greater flexibility and functionality over purely in-house operations.

Take traffic. “We have peaky loads,” he says. “At sales times we have a huge amount of traffic. If users are searching for a designer and want to see all the items in their product range, there will be a lot of images and it all needs to be presented quickly. How do we cope with that? As they say, do you build a church for Easter Sunday? The cloud means we can scale up just when we need it.”

Net-a-Porter uses Amazon Web Services (AWS) for hosting traffic and for handling cloud-based customer relationship management – the firm uses Salesforce.com – and its enterprise planning system.

Testing needs to be ultra-rapid too. Mr Fahy says: “Testing is essential. AWS means we can simulate tens of thousands of customers, to see how well our systems perform during peak-traffic times. You need to be able to test on this scale.”

Each decision at Net-a-Porter comes down to moving faster than rivals. Mr Fahy knows no firm stays at number one without constant effort.

Charles Darwin wrote: “It is not the strongest or the most intelligent who will survive, but those who can best manage change.”

Being agile takes the right mindset, the right processes and, above all, ferocious levels of desire. If you are happy coasting, the only future waiting for you is oblivion.