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Prime Time

Optimize Blog - July 28, 2011 - 0 comments

Prime numbers are found hidden in nature. Buzzing quietly beneath the planet we inhabit is an unseen world of numbers, patterns and geometry. Mathematics is the code that makes sense of our universe.
In the forests of Tennessee this summer, part of this code will literally emerge from the ground… Every 13 years, the normal country music sounds of Nashville get drowned out for six weeks by the chorus of an insect – the mysterious Cicada. Only found in the eastern areas of North America, this Cicada’s survival depends on exploiting the strange properties of some of the most fundamental numbers in mathematics – the primes, numbers that are only divisible by themselves and one.
The Tennessee Cicada:
A new strategy Guru?
A bug in the system…entirely different!
A Bug in the system... not a Cicada!
The Cicadas appear periodically but only emerge after a prime number of years. In the case of the Nashville species that number is 13. The forests have been quiet for 12 years since the last invasion of these mathematical bugs in 1998 and the locals won’t be disturbed by them again until 2024.
This choice of a 13-year cycle doesn’t seem too arbitrary. There are another two groups across North America that also have this 13-year life cycle, appearing in different regions and different years. In addition there are another 12 groups that appear every 17 years.
Sure, you could just dismiss these numbers as random. But it’s very curious that there are no Cicadas with 12, 14, 15, 16 or 18-year life cycles…
Because 13 is indivisible it gives the Cicadas an evolutionary advantage as primes are helpful in avoiding other animals with periodic behaviour. Suppose, for example, that a predator appears every four years in the forest. Then a Cicada with an 8 or 9 year life-cycle will coincide with the predator much more often than a Cicada with a 7 year or 13 year prime life cycle. These insects are tapping into the code of mathematics for their survival.
In a bizarre leap of intuition, this got us thinking about the relationships among industry life cycles, technological change, and firms’ strategic choices – relationships that are central to the fields of strategy, economics, and organization theory. The field of Strategic Management has recently explored a range of new questions regarding innovation, technological change, organization capabilities, and leadership decision-making. This exploration has produced many insights regarding how firms develop and how competition unfolds over time.
At Zeitgeist we use the Industry Lifecycle model in helping our clients develop strategy. Here is the model in a nutshell. Industries typically start off with a period of fragmentation, as companies experiment with different approaches. With time, a scalable approach emerges as a dominant model, often because it yields greater efficiencies than available alternatives. The dominance of the model also depends on the abilities of those invested in it to disseminate the model among key customers, suppliers, and other vital constituents. As the dominant model develops, an industry goes through a shakeout as unaligned firms are forced to exit. Eventually, firms find it difficult to improve their productivity on the dominant model at high rates, volume growth hits a point of diminishing returns, and the industry enters maturity. Ultimately, as volumes drop because of saturated demand or exhausted supply, the industry moves into decline.
In practice and in theory, many strategists have shown that the specific choice of business strategy by an organization – whether to pursue a low-cost approach or to differentiate on quality, for example – should depend on the phase of the industry life cycle. And yet we still know relatively little about how the industry life cycle influences firms’ strategy development.
So perhaps, like the mysterious Cicada, understanding the competitive advantage a lifecycle insight might provide is key to organizational survival..?

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