Applying Darwin to business

May 13, 2004, vol. 30 no. 2
By Diane Luckow

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A modern-day Charles Darwin of the corporate world, Ian McCarthy is a specialist in corporate classification.

Just as Darwin classified flora and fauna and determined that an organism's survival or extinction depends on its form and adaptability, McCarthy uses evolutionary theory to classify companies and plot them on a corporate, evolutionary family tree.

“It's survival of the fittest,” says McCarthy, the new Canada Research Chair in management of technology at SFU. “Companies are in a race that has no finish line.” Discovering how firms organize themselves to survive in their environment, he says, is key to understanding today's process of corporate competition and evolution.

To classify a company, McCarthy determines its practices, operations and differing use of technologies, then examines how these factors correlate with strategy and performance.

“The classifications provide a benchmarking framework - helping companies understand how they can get from A to B.” Sometimes, he says, this corporate DNA roadmap indicates that a company must go back through its evolutionary tree to undo some of the practices that are keeping it static.

“In many cases it's not a case of simply copying other firms' practices to achieve a similar performance,” he says. “Companies evolve to have certain policies, procedures and structures. If a company wants to become something else, more often than not it's a case of undoing some of the things that are going to conflict with what it wants to be.”

McCarthy, who worked for several years as a manufacturing engineer before earning his PhD in operations strategy from the University of Sheffield in Britain, came to SFU from the University of Warwick, where he was a reader and head of the organizational systems strategy unit.

As the new Canada Research Chair in management of technology at SFU, McCarthy will focus his research on discovering how best to design and manage biotechnology companies. He'll also head up a new centre for research in biotechnology management at SFU's Segal graduate school of business, opening in 2005.

“The key questions are, how do you measure the performance of a biotechnology firm when the majority of them have no products, no customers and no revenues? And, how do you design and operate a biotechnology firm to ensure it succeeds and survives?”

Interestingly, it is SFU's own interdisciplinary and entrepreneurial culture that attracted McCarthy to move to Vancouver. “SFU isn't just maintaining staid, classic approaches to research,” he says. “People here are very willing to think outside the box.”

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