The Power of Evolution is Liu Run's annual lecture collection. Liu Run, a well-known domestic business consultant, the founder of Runmi Consulting, the former director of strategic cooperation of Microsoft and the current chairman of Shanghai Runmi Management Consulting Co., Ltd., in the book The Power of Evolution, the author analyzes the road of enterprise development, industry practice and personal growth from the perspective of evolution.
1. What is a Darwinian finch?
Darwin discovered Darwin's finches in the Galapagos Islands, which inspired him to publish his masterpiece "Origin of Species" in 1859, and put forward the famous "evolution theory": on the island with many insects, the straight-billed finches are more suitable for survival; On an island with many berries, finches with curved beaks are more suitable for survival. On the contrary, it will be at a disadvantage or even extinct. This is "natural selection, survival of the fittest". This is the "Darwinian finch" that keeps pace with the times.
The author believes that evolution is the only reliable success on earth. Just like "Darwinian finch", in the face of change, it deals with complex "natural selection" with massive "natural selection", which is the power of evolution.
Second, the internal logic of enterprise evolution
Inspired by the laws of nature: in this world, there is no lasting foundation, no sustainable management, only constant evolution, evolution and re-evolution. If appropriate, you will choose; If it doesn't meet, it will be eliminated.
In my opinion, there are five underlying logics in the evolution of enterprises: be big, be fast, be first, cooperate and survive.
1. Make it bigger.
If you think that the industry is predictable but not plastic, then such an industry may be a traditional industry, and the basic strategy and play method is to "make it bigger" and realize the scale advantage.
There is a very basic "cost formula" in business: cost = (fixed cost/sales scale)+variable cost. Following this formula, we want to be bigger, and there are three ways: one is to reduce the fixed cost, the other is to reduce the variable cost, and the third is to increase the sales scale.
Great competition is often fierce. It is for this reason that we can often hear stories of various price wars.
Quick action
If you think this industry is unpredictable, inflexible and vague, then you can only "seek fast" at this time.
This was the case in the foreign trade industry during the COVID-19 epidemic. At the beginning of the COVID-19 outbreak, the foreign trade industry was greatly affected by the suspension of production. However, with China's economy gradually returning to normal, and the COVID-19 epidemic in other countries and regions in the world becoming more and more serious, there is a huge gap between demand and supply. In the dark world, a place is suddenly illuminated and fleeting. We must seize this time window quickly. Finally, those foreign trade enterprises and cross-border e-commerce merchants who bravely rushed in earned a lot of money.
make progress
If you think this industry is predictable and plastic, and you know it will change, then you should "walk in front of it". It's like playing a game of "grab a chair". Whoever sits down first to grab a seat wins.
For example, gene technology, 5G technology, autonomous driving technology, blockchain technology ... each technology may lead the transformation of an industry. Technological change will create a group of new people and eliminate a group of old people. Whoever can discover and use new technologies is likely to stand on the new trend.
4. Coordination
If you think the industry is unpredictable but plastic, then what you need to do is "coordination", that is, unite people like you and redefine the rules.
0 19 12, elon musk published an article "All our patents belong to you". He said that he would adopt an "open source model" to open all patents to the outside world and encourage other enterprises to develop advanced electric vehicles. He did this because he clearly knew that Tesla's opponent was not other electric vehicles, but the entire fuel vehicle ecosystem. What Musk is doing is coordination-uniting everyone in the industry and redefining industry rules.
Step 5: Survival
If the environment of your industry suddenly becomes particularly bad, then the core at this time is not development, but "survival" and strive to survive. To live is to win.
What is survival? Specifically, it is to save lives and preserve health. From the perspective of financial statements, "saving lives" means positive cash flow, "treating diseases" means positive profits, and "preserving health" means asset appreciation.
Third, enhance cognition and grow up crazily.
Cognition may be the greatest skill in the future. Only when you recognize it can you think of it; You can do it if you think about it; You do it, you get it. Therefore, the future advantages are all cognitive advantages; Future competition is also cognitive competition.
On how to improve cognition, the author thinks that we should read more books, meet more people, travel more and force ourselves more.
Change is a painful thing for most people. But if you want to improve your cognition, you must make changes and put yourself into a more stressful environment, because the environment will affect people and profoundly change them. When you enter a higher circle, a few words from others may inspire you. Therefore, you have to force yourself to go to a place with greater information density, talent density and communication density.
Whether it is personal growth, enterprise development, or investment and financial management, if you want to achieve great success and change, you must try to jump up, then stop, and then jump up and stop, just like jumping a step, so as to achieve exponential growth.
There is a formula for exponential growth:
Buffett has a famous metaphor-"snowballing". Snowballing usually requires us to find a long, thick and wet snow trail. The snowball at the beginning is "A", and the bigger the principal, the better. The length is "Y", the snow trail should be long enough, and the snowballing time should be long enough. Thick, is "?" Bring in more snow every time you roll, so that you can roll faster and faster. Wet, that is, "+",the snow wrapped inside should be able to stick to the rolling snowball and accumulate. In this way, the snowball will eventually roll bigger and bigger.
In today's fierce competition and industry reshuffle, we need to work harder, but we need to use more methods. I hope you and I can both find the growth pole and be "Darwinian finches" keeping pace with the times.