In Jared Diamond’s Guns, Germs, and Steel, the author takes the reader on a whirlwind tour through 13,000 years of history on all the continents. He also directly and indirectly offers some observations and recommendations about what leaders can do to influence the cultures they create and the organizations they aspire to lead.
The author starts with the overarching question: “Why did wealth and power become distributed as they are, rather than in some other way?” He posits that societies developed differently on dissimilar continents because of differences in continental environments, not in human biology. He found that human groups with guns, germs, and steel, or with earlier technological and military advantages, excelled at the expense of other groups, until either the latter groups disappeared, or everyone came to share the new advantages.
After the book’s release, Diamonds began receiving notes from business people, including Bill Gates, and economists pointing out the possible parallels between the histories of entire human societies and the histories of businesses. The author began to question how we can account for the success of one company over another, even in the same industry.
He concluded that, if your goal is innovation and competitive ability, you don’t want either excessive unity or excessive fragmentation. Instead, you want your country, industry, or company to be broken up into groups that compete with one another while maintaining relatively free communication.
Diamonds used beer to demonstrate his conclusions. As he noted, Germans make wonderful beer. People throughout the world taut the quality of German beer, and the Germans produce it consistently throughout the country. But they don’t do it efficiently.
The German beer industry suffers from small-scale production. There are a thousand tiny beer companies in Germany, shielded from competition with one another because each German brewery has virtually a local monopoly, and their laws shield them from the competition of imports. Conversely, the U.S. has 67 major beer breweries, producing twice as much as Germany does. The average U.S. brewery produces 31 times more beer than the average German brewery. Also, most German beer is consumed within thirty miles of the factory where it was brewed. There’s no competition; there are just a thousand local monopolies and no agility.
A commitment to excellence demands a quality product that you can consistently produce, but it also requires agility in approach to beat competitors. The organizational equivalents, therefore, to guns, germs, and steel are technology, talent, and crystal balls. You’ll certainly need the big data. These will constitute the guns and steel of your organization. But, more importantly, you’ll need people to make sense of this information—looking at historical contexts to anticipate future needs. Then, these same people will have to create the crystal balls that will foretell several likely futures and the probable events that will cause these events.
Corporate agility is like a tennis match. The best players literally stay on their toes; they don’t rest on their heels. Organizations that can do the same position themselves in the market to nimbly respond to sudden, even unexpected changes. They don’t merely run the race faster on the track others have built or in the direction their competition has decided to run. Alert to both opportunities and changes, agile organizations respond to what customers need and define for competitors what race they will enter. They can do all this because they started with a foundation of excellence built on quality, consistency, and customer focus.