The Hominid Post

A customer acquisition problem appears, so marketing buys another tool. Sales conversion falls, so management adds a dashboard. Retention weakens, so a retention team is created. Compliance becomes harder, so another vendor is hired. Artificial intelligence arrives, so someone buys an artificial intelligence platform.

Six months later the company has more technology, more vendors, more meetings, more data and more operating expense. The original problems are often still there.

This failure is common because each decision makes sense on its own. The problem sits one level higher. A business is a system of interdependent people, incentives, information, capital, customers, suppliers and institutions. When management treats interconnected problems as isolated events, every local solution changes the environment around everything else, and the company ends up running on patchwork.

There is a different way to approach the problem, which is to build an ecosystem. That does not mean buying a platform or assembling a long partner list. A working business ecosystem is an architecture in which different participants contribute specialized capabilities under rules, incentives, interfaces and information flows that are clear enough for the pieces to reinforce one another. A patch solves today’s problem. An ecosystem changes the conditions that keep producing it.

Long before corporations, software platforms and supply chains, humans faced a basic economic constraint: an individual could rarely produce everything a household needed. Specialization created advantages, and it created dependence. A skilled hunter could bring in more meat than one household could eat before it spoiled. Someone else could offer food later, childcare, political support, information, protection or access to a resource the hunter lacked.

Once specialization appears, exchange becomes valuable. Once exchange becomes valuable, relationships matter. Once relationships repeat, rules and reputations start to matter. The same logic that makes eusocial insect colonies and cooperative primate groups stable, that individuals gain from contributing to a system they cannot run alone, applies to human households (Nowak et al., 2010), though humans layer culture, kinship and negotiated alliances on top of it in ways no other species does.

John Q. Patton’s research among households in Conambo, in the Ecuadorian Amazon, is a useful illustration. Patton asked why hunters transferred meat to other households. A simple answer would have been food redistribution. His findings were more complicated. Meat transfers tracked reciprocity, kinship and political alliances, which means one resource was moving through a network that carried several kinds of value at once (Patton, 2005). A piece of meat could be food, a repayment, support for a relative, maintenance of an alliance and a contribution to reputation, sometimes all in the same transfer. Patton cautioned against reducing any single transfer to one motive, since the same act could serve overlapping strategies depending on ecological and political circumstances.

That observation translates well to modern organizations. Money is rarely the only thing moving through a business relationship. Information moves. Trust moves. Customers, reputation, risk, expertise and bargaining power all move. A company that sees only the immediate transaction can miss the system that is producing its economic value.