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“At Maxygen, just as this 'seed, select, and amplify model' was the antithesis of rational drug design, the company's predilection for 'sense and respond, learn, and adapt,' was the antithesis of traditional business planning.”
Life is characterized not only by death, but by reproduction, passing on the DNA, the thread that produces progeny and is the real essence of life. Most businesses are the genesis of another business. They may spin off another company, and the parent may die, but the spin-offs survive and succeed. I use the analogy not only of inevitable death, but of life’s continuous process of recreation.
While the above may sound more like the musings of a new-age guru, the words come from Russell Howard, CEO of Maxygen, a 10-year-old biotech company based in Redwood City, California, that was added to the Nasdaq Biotechnology Index last May.
Howard was speaking in 2001, when one of us interviewed him for a book called It’s Alive: The Coming Convergence of Information, Biology, and Business. That book, co-authored with Stan Davis, profiled Maxygen as the poster child for a new “biomolecular” way of organizing enterprise, a new paradigm based on biological principals such as breeding, adaptation, and cell division.
Even among biotechnology companies, Maxygen appeared much farther along this path than most. Its foundation was a platform of DNA shuffling and molecular breeding technologies, methods of rapidly creating gene variants and recombining them into novel sequences, then employing high-throughput screening as the agent of selection.
Maxygen’s initial business plan mirrored its technology. Based more on exploring new opportunities than on exploiting any specific market, its strategy produced innovative technology applications that were spun off as separate companies, with substantial accrual of cash for Maxygen. What the company has not produced are profit-generating products—at least not yet.
Six years after that first interview, we checked back to find Maxygen approaching a dramatic point of reckoning. After a time, for individuals and for companies, the “pluripotent” possibilities of youth fade. Eventually, even a stem cell has to decide what it wants to be.
It’s Alive focused on two propositions we found central to the notion that there was a new, Biomolecular Economy overtaking the Information Economy, which had, previously, overtaken the Industrial Economy.
The first proposition, distilled from the work of Stuart Kauffman and others at places like the Santa Fe Institute, is that the principles of evolution and natural selection apply to all sufficiently complex systems. Genetic algorithms, for example, evolve software in a process literally isomorphic to the way biology uses recombination and selection to evolve species. Laboratories spawn self-organizing systems—artificial tissue, self-assembling nano-assemblies, or software that learns from its environment.
The second proposition is that, in the years ahead, the most highly adaptive organizations will succeed by letting go of “command and control,” prediction-oriented models. Instead, they will follow the core principles of living systems—self-organization, recombination, selection, feedback, and emergence. We translated some of these principles into seven “Memes For Management,” a meme being biologist Richard Dawkins’ term for a unit of thought that can be transmitted just as units of genetic information can be.
For example, embodying the “Recombine” meme in an organization would mean bringing people of different disciplines or backgrounds into an organization to increase the diversity of ideas being considered, even if it reduced task-level performance. The meme “Destabilize” suggests that disrupting the status quo in which you were the leader could strengthen competitive advantage if your own organization were more adaptable than its competitors. In the military, this is called “getting inside your opponent’s OODA Loop,” OODA being an acronym that stands for Observe, Orient, Decide, and Act. Both suggest a more fluid business plan that allows for serendipity, and that, in some circumstances, even accepts “fail often” as a useful corollary to the drug discovery mantra “fail early.”
October 26, 2007
http://www.burrillreport.com/article-a_turning_point.html
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