Ecological SuccessionNew

Chapter 1: Ecological Succession - The Long Arc of Renewal

Introduction

On the morning of May 18, 1980, Mount St. Helens in Washington State erupted with the force of 500 Hiroshima atomic bombs. The blast obliterated 230 square miles of ancient forest in seconds. Thousand-year-old Douglas firs - trees that had survived countless storms - snapped like matchsticks. The shockwave flattened every visible living thing within the devastation zone, leaving only a gray moonscape of ash, pumice, and pulverized rock.

Superheated gases exceeding 660°F sterilized soil to depths of several feet, incinerating seeds, roots, and microbial life. Spirit Lake boiled, its waters turned turbid with volcanic debris. Mudflows choked rivers valleys, burying entire ecosystems under gray sludge. The mountain itself lost 1,300 feet of elevation, its once-symmetrical peak replaced by a horseshoe crater. To ecologists surveying the aftermath, the landscape appeared utterly sterile - a biological ground zero where recovery seemed impossible for generations.

Yet within days, life began returning. Wind-blown spiders arrived, spinning webs in the lifeless ash. Within weeks, fireweed seeds - light as dust, carried by wind from distant unaffected areas - germinated in the nutrient-poor pumice. By the first spring, lupines established small patches of improbable green. Their roots hosted bacterial partners that pulled nitrogen from air and fixed it into soil. What appeared lifeless was quietly rebuilding the foundations of complexity.

Elk and deer returned, dispersing seeds in their dung. Burrowing pocket gophers survived underground and began turning over soil, mixing organic matter and seeds into the sterile substrate.

Ecologists studying the recovering landscape documented a predictable sequence of community development - what they call ecological succession. Pioneer species colonized first, tolerating harsh conditions but growing slowly.

These pioneers modified the environment in multiple ways. Lichens secreted acids that weathered rock, creating primitive soil. Nitrogen-fixing plants enriched nutrient-depleted substrates. Vegetation provided shade that moderated temperature extremes and retained moisture. These environmental modifications created conditions more favorable for subsequent species.

Over decades, communities progressed through recognizable stages. Pioneer herbs gave way to shrubs like willow and alder. Shrubs gave way to early successional trees like cottonwood and aspen. These are now being replaced by late-successional conifers like Douglas fir and western hemlock. Each stage creates conditions enabling the next while becoming less competitive under the new conditions.

The Succession Framework: A Preview

Before exploring the biological mechanisms and organizational examples, here's the core framework this chapter builds toward.

Organizations, like ecosystems, progress through predictable successional stages:

This process mirrors ecological succession with uncanny precision. The mechanisms that drive forest regeneration - facilitation, environmental modification, alternative stable states, and threshold effects - also drive organizational evolution.

Three principles will recur throughout this chapter:

1. Facilitation Enables Transitions: Later successional stages depend on assets created by earlier stages. Without soil created by lichens, trees cannot establish. Without capital and capabilities created by pioneer businesses, mature businesses cannot emerge. The purpose of your current business isn't just profit - it's creating assets for your next business.

1. Succession Never Truly Completes: Unlike the old notion of stable "climax" communities, modern ecology recognizes perpetual change. Organizations face the same reality. There is no final stable state where succession ends. Long-term survival requires embracing continuous renewal.

We'll now explore the biological foundations of succession, see these principles operating across four organizations spanning centuries, then return with diagnostic tools and implementation frameworks.

Part 1: The Biology of Ecological Succession

To understand organizational succession, we must first understand its biological template. The patterns that govern forest regeneration - pioneer colonization, facilitation, environmental modification, and alternative stable states - operate with identical precision in organizations. These aren't metaphors. They're deep structural principles.

Primary and Secondary Succession

Ecologists distinguish between two types of succession. Primary succession develops on substrates never previously occupied by life - volcanic islands, glacial moraines, lava flows. Secondary succession develops on disturbed sites previously occupied - abandoned fields, burned forests, storm-damaged reefs.

The distinction matters because secondary succession occurs faster and follows different trajectories. It proceeds from damage, not from zero.

Primary succession begins literally from naked rock. On newly exposed volcanic surfaces or glacial till, no soil exists - only sterile mineral substrate baking under relentless sun. The first colonists must tolerate conditions that would kill most life: solar radiation intense enough to desiccate tissues in hours, surface temperatures fluctuating 80°F between day and night, no nutrients, no water retention, no organic matter.

Lichens and mosses often pioneer these hostile frontiers. Crusting across bare basalt, these organisms accomplish what seems impossible: they live where nothing should survive. Lichen acids - organic compounds secreted grain by grain - slowly dissolve granite, releasing mineral nutrients locked in crystal structures. Their sparse biomass, tissue-thin but tenacious, provides the first organic matter, creating microscopic pockets that trap moisture. When these pioneers die, their decay transforms sterile rock dust into primitive soil - a few millimeters of living substrate where vascular plants can root. This transformation takes decades on favorable sites, centuries on harsh ones.

The first vascular plant colonists are typically annual herbs with wind-dispersed seeds, rapid growth, and tolerance for nutrient-poor conditions. Early pioneers continue environmental modification. Their roots further weather rock and create channels for water infiltration. Their biomass adds substantially more organic matter. Some species - legumes, alders - fix atmospheric nitrogen through symbiotic bacteria, enriching depleted substrates.

This facilitation mechanism appears constantly in organizational succession. Pioneer businesses create brand awareness, prove market demand, establish supplier relationships, develop initial capabilities, and accumulate capital. These assets facilitate intermediate-stage businesses that couldn't have started from zero. Without the facilitation created by your pioneer stage, your mature capabilities cannot emerge.

As soil deepens and nutrient availability increases, later colonizers begin establishing. These species have larger sizes, slower growth, higher resource requirements, and greater competitive ability.

Shrubs shade and outcompete herbs. Trees shade and outcompete shrubs. Each wave of colonists further modifies conditions - increasing soil depth, accumulating organic matter, moderating temperature and moisture, and providing structural complexity.

Over centuries to millennia, primary succession can progress from bare rock to mature forest.

Secondary succession proceeds much faster because soil, organic matter, seed banks, and root systems often survive disturbance. After agricultural abandonment or forest fire, recovery begins not from zero but from a degraded yet biologically functional state. Succession often advances from annual herbs to perennial herbs to shrubs to trees within decades rather than centuries.

For organizations, this distinction is critical. Companies recovering from crisis (secondary succession) can leverage surviving assets - brand, customer relationships, capabilities, infrastructure. Companies entering entirely new markets (primary succession) must build everything from scratch, requiring longer timelines and different strategies.

Life History Strategies Across Succession

Species dominating different stages exhibit contrasting strategies. Pioneer species spread rapidly through abundant, wind-dispersed seeds and tolerate harsh conditions but compete poorly once environments moderate. Late-successional species grow slowly, reproduce sparingly, but dominate stable, competitive environments through superior resource efficiency and shade tolerance.

Pioneer species create the conditions for their own displacement. Pioneer companies do the same - your early success makes you unfit for your later context. Rapid growth and tolerance for chaos become liabilities as markets mature and demand efficiency, process, and predictability.

Facilitation and Alternative Stable States

Two mechanisms are particularly relevant for organizational strategy: facilitation and alternative stable states.

Facilitation occurs when early colonists modify environments in ways that enable later colonists to establish. The classic example involves nitrogen fixation. Legumes and alders harbor bacteria that convert atmospheric nitrogen to forms accessible to plants, enriching nitrogen-poor soils. Subsequent non-fixing species benefit from this enrichment, allowing species that couldn't establish initially to colonize later.

Facilitation is most important in harsh environments where environmental modification is necessary for subsequent colonization. On nutrient-poor volcanic substrates, nitrogen fixers are often essential for allowing non-fixers to establish.

For organizations, facilitation is the mechanism that enables multi-stage evolution. Shell's century of oil exploration created geology expertise, project management capabilities, government relationships, and capital reserves. These facilitation assets enable geothermal energy businesses - which require similar geology skills and drilling capabilities. Shell's oil business facilitated its geothermal succession pathway. The same facilitation assets don't transfer to solar energy, which requires completely different capabilities. Understanding your facilitation assets reveals which successor businesses are accessible and which require starting from zero.

Alternative stable states represent modern ecology's recognition that succession doesn't always converge on a single climax but can progress toward different endpoints depending on contingencies.

Kelp forests versus urchin barrens on rocky coasts illustrate this. Both states are stable and self-reinforcing: predators maintain kelp forests by controlling urchins; dense urchin populations prevent kelp reestablishment once cleared. Shifting between states requires overcoming thresholds - dramatic interventions that push systems across tipping points.

These alternative stable states demonstrate that succession doesn't have a single predetermined destination. Different strategic choices can lead organizations to different stable configurations. Mitsubishi's diversified keiretsu represents one stable state. Focused specialist companies represent another. Both can persist in the same environment. Once achieved, stable states require active maintenance - investments and management attention - or they degrade.

The implications for organizational strategy are profound: If you want your organization in a particular state, understand what maintains that state. Understand what threshold effects could flip it to alternative states. Recognize when your current state is becoming unsustainable and transition is necessary. Design interventions that push systems across thresholds when transition is desired.

The modern view recognizes succession as a combination of directional change toward increasing complexity and contingency in exactly where succession leads.

Part 2: Succession in Organizations

The biological principles are clear. Now we see them operating in real organizations across centuries. Four cases - Stora Enso's 700-year evolution, Mitsubishi's portfolio succession, Shell's attempted energy transition, and Nokia's failure - demonstrate succession's inevitability, its patterns, and its challenges.

Stora Enso: Seven Centuries of Industrial Succession

Stora Enso, a Finnish-Swedish forestry and biomaterials company, traces its origins to 1288 when copper mining began at Stora in Sweden. This makes it one of the world's oldest continuously operating companies. Over seven centuries, the company has undergone multiple fundamental business transformations, exemplifying organizational succession through stages that bear striking parallels to ecological processes.

Pioneer stage (1288-1600s): Mining foundation

The company's first incarnation focused on copper mining in central Sweden. Like pioneer species colonizing bare ground, early Stora operated in relatively undeveloped industrial landscape. It extracted natural resources with simple technologies. It gradually built capital, infrastructure, and organizational capabilities.

The company received a formal charter in 1347, establishing legal and governance structures that would enable long-term operation.

This pioneer stage established foundations - physical infrastructure, capital accumulation, trade relationships - that would support subsequent stages. This mirrors how pioneer vegetation creates soil and nutrients enabling later successional stages.

Intermediate stage (1600s-1800s): Forest industries emergence

As Swedish copper deposits depleted and copper prices declined, Stora's mining business faced challenges. Simultaneously, the company's forest landholdings - originally acquired to supply timber for mine construction and charcoal for smelting - presented new opportunities.

The company began transitioning toward forest industries: sawmilling, charcoal production, and eventually pulp and paper manufacturing.

This transition exemplifies facilitation. The pioneer mining business created assets that enabled subsequent forest industries to establish: land, capital, infrastructure, organizational capabilities. The company didn't abandon copper immediately but gradually shifted emphasis as conditions changed. Forest succession involves similar gradual species replacement rather than abrupt shifts.

By the 1800s, Stora had become primarily a forest products company. Copper mining represented legacy operations maintained until they were no longer viable. This stage involved consolidation and capability building - developing forestry expertise, acquiring more forest land, building pulp mills and paper machines, establishing markets. The company was transitioning from extractive pioneer mode to more sustainable renewable resource management.

Mature stage (1900s-1990s): Industrial forestry dominance

Through the 20th century, Stora evolved into a major international forestry company. It operated pulp mills, paper mills, and sawmills. It managed extensive forest holdings. The company exemplified industrial forestry practices: intensive plantation management, mechanized harvesting, large-scale processing, global markets.

This represented mature successional stage - optimized operations, significant competitive capabilities, strong market positions. But also increasing capital intensity, regulatory complexity, and vulnerability to commoditization.

During this period, Stora faced the challenge many mature-stage organizations encounter: maintaining profitability in commoditized markets with declining margins. The company pursued scale, integration, and diversification. In 1998, Stora merged with Finnish forestry company Enso to create Stora Enso, combining assets and capabilities.

Contemporary succession (2000s-present): Biomaterials transition

Stora Enso faced long-term secular decline in traditional forestry markets. Newsprint demand declined as media digitized. Paper demand declined as communication shifted online. Competition from low-cost producers increased. In response, Stora Enso has undertaken another fundamental succession, transitioning from traditional forest products to advanced biomaterials.

This involves leveraging forest resources for new applications. The company is replacing fossil-based packaging materials with renewable fiber-based packaging. It's developing bio-composites and wood-based construction materials as alternatives to steel and concrete. It's producing biochemicals and biofuels from forest biomass. And it's creating advanced cellulose-based materials for textiles, electronics, and other applications.

This succession is not complete and its outcome uncertain. The company operates simultaneously in mature traditional forestry (optimizing existing assets) and pioneer biomaterials businesses (investing in R&D, building new facilities, developing markets).

The transition involves creative destruction. The company is closing legacy pulp and paper mills that are no longer competitive. Simultaneously, it's investing in new biomaterials production facilities. It's divesting commodity businesses while building specialty materials capabilities.

Key Succession Insights from Stora Enso:

• Facilitation across centuries: Each business stage created assets enabling the next - mining capital enabled forestry land acquisition; forestry expertise enables biomaterials. Your current business's purpose isn't just profit; it's creating assets for your next business.

• Gradual not abrupt transitions: Transitions spanned decades with overlapping operations. Don't expect clean pivots; successful succession is messy portfolio evolution over extended timeframes.

• Path dependence limits but doesn't determine destiny: Stora couldn't easily become a software company, but within biomaterials had many paths. Your history constrains options but doesn't eliminate choice.

Mitsubishi: Business Portfolio Succession

Mitsubishi, one of Japan's largest conglomerates with roots dating to 1870, exemplifies succession through business portfolio transformation. Founded as a shipping company by Yataro Iwasaki during Japan's Meiji Restoration, Mitsubishi has evolved through multiple distinct phases.

Pioneer stage (1870s-1900): Shipping and trading

Mitsubishi began when Iwasaki acquired a shipping company, timing his entry as Japan opened to international trade. The company secured contracts transporting goods for government and military, gradually accumulating capital and capabilities. This pioneer phase involved rapid growth, high risk-taking, and government patronage.

Iwasaki diversified early, acquiring coal mines to fuel ships and entering trading to leverage shipping logistics. By the 1880s, Mitsubishi operated shipping, mining, shipbuilding, and trading businesses - creating a multi-business portfolio structure that would characterize the company for centuries.

Expansion and disruption (1900-1945)

As Japan industrialized rapidly, Mitsubishi expanded into heavy industries: shipbuilding, machinery, aircraft, automobiles, chemicals, electrical equipment. This phase involved facilitating Japan's industrial development, often in partnership with government. The company created a zaibatsu structure - a family-controlled conglomerate with financial, industrial, and trading arms.

World War II disrupted this succession. Mitsubishi's heavy industry businesses were central to Japan's war effort. Post-war Allied occupation dissolved the zaibatsu structure, forced divestitures, and prohibited family control. This created a dramatic succession discontinuity - analogous to an ecological catastrophe that resets succession.

Post-war succession (1945-present)

After dissolution, former Mitsubishi companies gradually reformed into a keiretsu - a looser affiliation of independently operated companies with cross-shareholding and coordination. Three core entities emerged: Mitsubishi Corporation (trading), Mitsubishi Heavy Industries (machinery and aerospace), and Mitsubishi Bank (later merged into Mitsubishi UFJ Financial Group). Dozens of affiliated companies across industries joined them.

The keiretsu structure provided mutual support. The trading company sourced materials for manufacturers. The bank provided financing. Manufacturers supplied products for trading exports. Cross-shareholdings aligned interests. This integration enabled rapid growth during Japan's post-war economic boom.

Following Japan's asset price bubble collapse in 1991, different group companies pursued different succession paths. Some successfully transitioned to new stages; others stagnated; the overall portfolio evolved through a mix of successes, failures, and transformations.

Mitsubishi demonstrates portfolio succession through business mix evolution. Organizational succession can occur not primarily through individual business transformation but through changing the portfolio mix. This means adding new businesses, divesting others, and allowing some to grow while others shrink.

Key Succession Insights from Mitsubishi:

• Catastrophic disruption resets succession: Post-WWII dissolution forced restart, showing that succession can be reset to earlier stages by major disruptions. Plan for resilience, not just progression.

• Portfolio succession through mix evolution: Organizational succession happened through changing business mix, not transforming individual businesses. Large organizations succeed through portfolio dynamics, not unit-level pivots.

• No clear climax exists: After 150 years, Mitsubishi is still evolving - suggesting organizational succession has no endpoint, only continuous adaptation.

Shell: Energy Transition as Succession

Royal Dutch Shell (now Shell plc) is one of the world's largest oil companies, with revenues of $380 billion (2023). It provides a contemporary case of attempted succession - transitioning from a fossil fuel-based business model to a diversified energy business including renewables.

Mature stage dominance and succession dilemma

Shell spent the 20th century as an integrated oil major: exploring for and producing oil and gas, refining crude into fuels and chemicals, and distributing products through global retail networks. By the 2000s, Shell dominated key niches: deepwater offshore production, liquefied natural gas, petrochemicals, global refining.

The business was highly profitable but faced challenges. Declining reserves in mature basins. Increasing costs to access remaining resources. Geopolitical risks in producing regions. Environmental opposition. Long-term demand uncertainty as vehicle electrification and renewable energy gained traction.

This mature position presented a classic succession dilemma. Shell's existing businesses generated enormous cash flows and profits but faced long-term secular decline. The company could optimize existing operations, extracting maximum value before inevitable decline. Or it could attempt to transition to new businesses before existing ones became unviable - attempting controlled succession before being forced into crisis.

The most dangerous time for an organization is not crisis - it's success. Success in your current stage creates vulnerability in your next stage.

Transition phase and succession tensions

Shell has pursued energy transition through multiple initiatives: renewable power investments (solar farms, wind farms, battery storage), electric vehicle charging networks, hydrogen production and distribution, biofuels, and carbon capture and storage.

These investments represent pioneer efforts in new businesses. Shell operates as a relatively small player in renewables, learning new technologies and business models very different from oil and gas.

The challenge has multiple dimensions. Shell's core capabilities - geology, drilling, refining - don't transfer well to renewables. The company faces capability gaps that create competitive disadvantages versus specialized renewable developers with decades of experience.

Cultural fit is poor: oil mentality doesn't translate to renewables. Financial tensions are severe: renewable returns are generally lower than oil historically delivered.

When Shell CEO Wael Sawan announced in 2023 the company would slow renewable investments and refocus on oil and gas, climate activists erupted. Shareholders were divided. Sawan faced impossible arithmetic: oil generated $28 billion profit in 2022 on $380 billion revenue; renewables lost money. To replace oil profits, renewables would need 50x scale at much lower margins.

By 2024, Shell's succession retreat continued. The company sold offshore wind projects, reduced renewable power targets from 50GW to 15GW by 2030, and increased oil and gas investment. Shell's 2024 strategy prioritizes "value over volume" in renewables - maintaining profitable positions while acknowledging that mature oil business economics overwhelm pioneer renewable economics in the near term.

Every dollar invested in renewables is a dollar not invested in oil. Shell has reduced oil and gas exploration budgets and divested some assets to fund renewables. But oil projects still generate most profits, creating pressure to maintain oil investment.

The harsh reality of organizational succession: successful transition requires that new-stage businesses become viable before old-stage businesses collapse. If renewable businesses can't generate sufficient profits to replace declining oil profits, the succession fails. Unlike ecological succession where later species inevitably replace earlier ones given enough time, organizational succession can fail if the new business model doesn't work.

Key Succession Insights from Shell:

• Capability gaps prevent succession: Shell's oil advantages - geology, drilling, refining - don't transfer to renewables. Late-stage transitions to fundamentally different businesses face competitive disadvantages versus native pioneers.

• Financial tensions are real: Every dollar to renewables is a dollar not to oil. Mature businesses resist funding their own displacement. Requires explicit capital allocation frameworks protecting transition investments.

• Succession can fail: Unlike ecological succession where later species eventually replace earlier ones, organizational succession fails if new business can't generate sufficient returns before old business collapses.

Nokia: When Succession Fails

Nokia's collapse from mobile phone dominance ($60B market cap, 40% global market share in 2007) to irrelevance (sold to Microsoft for $7B in 2013) demonstrates succession failure - what happens when mature organizations resist necessary transitions.

Mature stage entrenchment (1998-2007)

Nokia reached mature stage dominance in mobile phones through manufacturing excellence, carrier relationships, and global distribution. The Symbian operating system powered the world's bestselling phones. Leadership optimized what worked: incremental hardware improvements, carrier partnerships, and emerging market expansion.

This mature-stage optimization created organizational rigidity. Nokia's decentralized structure gave country managers autonomy to customize phones for local markets - an advantage when hardware differentiation mattered. Engineering culture valued hardware efficiency: battery life, durability, manufacturing cost. Software was secondary, treated as firmware supporting hardware rather than as platform.

Missed succession trigger (2007)

The iPhone launch represented a succession trigger Nokia failed to recognize. Apple didn't compete on Nokia's mature-stage metrics (battery life, durability, price). Apple introduced pioneer-stage competition: a software platform enabling third-party apps, capacitive touchscreen enabling new interfaces, integrated ecosystem (iTunes, App Store).

Nokia executives dismissed the iPhone as niche product for wealthy consumers. "Nobody's going to buy a $500 phone," declared CFO Olli-Pekka Kallasvuo. This response exemplifies mature-stage blindness: dismissing pioneer competitors because they underperform on mature-stage metrics while missing the successional shift.

Failed transition attempt (2008-2013)

Nokia attempted succession too late with inadequate commitment. The company tried multiple platform strategies: continuing Symbian, developing MeeGo (Linux-based OS), then pivoting to Windows Phone partnership with Microsoft (2011).

Each pivot revealed succession failure modes. Symbian couldn't compete with iOS/Android but Nokia couldn't abandon it (mature business generating revenue). MeeGo development was too slow (took 3+ years to ship one phone). Windows Phone partnership ceded platform control to Microsoft while alienating hardware partners.

Cultural resistance intensified. Engineers resented prioritizing software over hardware. Country managers wanted localized hardware, not unified platforms. Leadership couldn't execute creative destruction - closing Symbian, firing hardware engineers, restructuring around software - because these actions threatened current operations.

By 2013, Nokia's phone business had collapsed. Market share fell from 40% (2007) to 3% (2013). Microsoft acquired the division for $7.2B - 85% less than Nokia's 2007 valuation.

Key Succession Insights from Nokia:

• Mature-stage metrics blind you to pioneer disruption: Nokia dismissed iPhone because it failed on mature metrics (battery, price, carrier relationships) while missing the successional shift to platform competition.

• Cultural lock-in prevents transition: Organizations optimized for mature-stage success resist pioneer-stage requirements. Nokia's hardware culture couldn't pivot to software; its decentralized structure couldn't execute platform strategy.

• Late succession requires creative destruction: Successful mature-to-pioneer transition demands closing profitable businesses, replacing leadership, restructuring organization. Nokia attempted succession while protecting mature operations - guaranteeing failure.

• Recognizing succession necessity ≠ executing transition: Nokia knew smartphones were the future but couldn't execute the transition. Understanding succession intellectually doesn't overcome organizational, cultural, and economic barriers.

Part 3: The Ecological Succession Framework

You've seen succession's biological foundations and organizational manifestations. Now comes the practical question: How do you manage succession deliberately in your organization? This framework provides diagnostic tools, transition triggers, resource requirements, and implementation strategies.

Diagnosing Your Successional Stage

Organizations should begin by assessing their current successional stage. Here are both qualitative characteristics and quantitative criteria:

Quantitative Stage Diagnostic

Qualitative Pioneer Stage Characteristics:

• Recent founding or post-crisis rebuilding
• Rapid growth focus, market share gains prioritized over profitability
• High risk tolerance, experimentation emphasis
• Simple organizational structures, limited hierarchy
• Entrepreneurial culture, informal communication
• Technology and product focus over process optimization
• High cash burn, external funding dependence
• Market uncertainty, unclear competitive positioning

Qualitative Intermediate Stage Characteristics:

• Moderate growth rates, profitability emerging
• Building organizational capabilities and infrastructure
• Increasing formalization of processes, roles, systems
• Market position clarifying, competitive advantages developing
• Balancing growth and efficiency
• Culture transitioning from chaos to structure
• Multiple growth initiatives, portfolio expansion
• Talent development and retention becoming priorities

Qualitative Mature Stage Characteristics:

• Slow, stable growth; market share relatively fixed
• Profitability emphasis, efficiency optimization
• Highly developed organizational capabilities
• Extensive formalization, established processes and systems
• Clear market positioning, strong competitive advantages in core businesses
• Risk-averse culture, incremental innovation
• Large-scale operations, high capital intensity
• Potential for rigidity, resistance to change

Diagnosing stage allows understanding what capabilities, strategies, and challenges are appropriate versus inappropriate for current position. Applying mature-stage approaches to pioneer organizations - excessive process, risk aversion - stifles growth. Applying pioneer approaches to mature organizations - informal structure, constant experimentation - creates dysfunction.

Understanding Succession Drivers and Mechanisms

Internal drivers:

• Scale effects: As organizations grow, structures and strategies must evolve to manage complexity
• Capability accumulation: Developing capabilities enables new strategies previously unavailable
• Cultural evolution: As organizations age, cultures shift from entrepreneurial to professional to bureaucratic
• Leadership changes: New leaders often drive succession by implementing new strategies and structures

External drivers:

• Market maturation: As markets saturate, growth strategies must shift
• Technology changes: New technologies enable new business models, requiring succession
• Competitive dynamics: Competitor actions force adaptive responses
• Regulatory evolution: Changing regulations create new constraints and opportunities
• Customer preference shifts: Evolving customer needs require business model adaptation

Facilitation mechanisms (critical for success):

Facilitation Assets are the capabilities, relationships, resources, and knowledge created by your current business that will enable your next business. Shell's geology expertise facilitates geothermal but not solar. Carrefour's real estate portfolio facilitates omnichannel but not pure e-commerce.

Identifying your Facilitation Assets reveals which successor businesses are accessible and which require starting from zero.

Early-stage activities create assets - brand, capabilities, relationships, capital - enabling later stages. Ask: How can current activities enable future transitions? What are we building today that will facilitate tomorrow's business?

Inhibition mechanisms (critical to manage):

Existing businesses, capabilities, and cultures can inhibit succession by consuming resources and management attention. Organizations should identify inhibition risks: What aspects of current operations prevent needed transitions?

The Three Succession Traps

Three patterns repeatedly cause succession failures:

The Pioneer Trap

Some organizations attempt to preserve pioneer-stage characteristics - agility, informality, rapid experimentation - indefinitely as they scale. This creates the Pioneer Trap: maintaining startup chaos at enterprise scale.

Uber's cultural dysfunction stemmed from preserving founder-stage behaviors (aggressive risk-taking, rule-breaking, minimal HR oversight) in a 20,000-person organization. The Pioneer Trap causes coordination breakdowns, quality issues, and talent exodus.

Organizations outgrow pioneer characteristics. Trying to stay permanently in startup mode at scale destroys value and people.

The Skip Trap

Organizations sometimes attempt to jump from pioneer to mature stage without building intermediate capabilities. This creates the Skip Trap: adopting late-stage practices - extensive process, hierarchical structure, risk aversion - before mid-stage foundations exist.

Series A startups hiring VPs and implementing enterprise sales process before product-market fit exemplify the Skip Trap. The result: Successional Debt.

You cannot skip successional stages any more than forests can skip from lichens to redwoods. Companies that try accumulate successional debt that comes due in crisis.

When to Transition: Diagnostic Questions

Use these diagnostic questions to identify when your organization needs to initiate a stage transition. If you answer "yes" to any 3 out of 5 questions in a category, begin planning your transition immediately. Waiting until all 5 are true means you're already in crisis.

Pioneer → Intermediate Triggers (Any 3 of 5 = Act Now)

1. Coordination breakdown: Teams don't know what others are building?
2. Quality issues: Customer complaints up >30% despite product improvements?
3. Talent churn: Key people leaving due to "chaos" or lack of structure?
4. Sales friction: Deal sizes growing but close rates declining?
5. Technical debt: Engineering velocity down >30% from peak?

Intermediate → Mature Triggers (Any 3 of 5 = Act Now)

1. Growth plateau: YoY growth below 100% for 2+ consecutive quarters?
2. Market saturation: TAM >50% penetrated in core segments?
3. Margin pressure: Unit economics improving but absolute margins declining?
4. Process burden: 50%+ of time spent on coordination versus execution?
5. Innovation slowdown: New feature velocity declining despite more resources?

Mature → Renewal Triggers (Any 3 of 5 = Act Now)

1. Core decline: Core business showing negative growth for 2+ years?
2. Disruption threat: New entrants gaining 5%+ market share annually?
3. Talent exodus: Best people leaving for "more exciting" opportunities?
4. Innovation freeze: No major new capabilities in 3+ years?
5. Strategic confusion: Leadership debates "what business are we in?"

Managing Succession Deliberately

For organizations in pioneer stage:

• Embrace rapid experimentation: Test multiple approaches, fail fast, learn quickly
• Prioritize speed over perfection: Get products to market, gather feedback, iterate
• Maintain flexibility: Avoid premature formalization; keep structures simple and adaptable
• Build facilitation assets: Even in pioneer stage, invest in assets - brand, IP, relationships - that will enable later stages
• Recognize transition timing: Monitor for signs that pioneer approaches are becoming limiting (coordination problems, quality issues, cash flow instability)

For organizations in intermediate stage:

• Invest in infrastructure: Build processes, systems, organizational capabilities needed for scale
• Professionalize management: Recruit experienced leaders, implement formal planning and budgeting
• Balance multiple objectives: Maintain growth while building efficiency; embrace structure while preserving flexibility
• Expand portfolio selectively: Diversify into adjacent opportunities enabled by current capabilities
• Avoid premature optimization: Don't impose mature-stage discipline before intermediate capabilities are established

For organizations in mature stage:

• Optimize core businesses: Extract maximum value from mature operations while viable
• Invest in succession options: Fund exploration of new businesses, even at expense of current profits
• Separate mature and pioneer businesses: Use distinct organizational structures, metrics, and leadership for different successional stages
• Create controlled disturbances: Periodically disrupt stable operations to prevent rigidity - restructure, change leadership, enter new markets
• Prepare for renewal: Develop strategies for next succession before crisis forces it

The purpose of your current business is not just profit - it's creating assets that enable your next business.

Succession at Startup Scale: Modern SaaS Examples

Slack (Pioneer → Intermediate → Mature, 2013-2024)

Slack began as a pioneer-stage startup with a simple product hypothesis: make team communication delightful. The pioneer phase (2013-2016) involved rapid iteration, viral growth, and minimal process. Teams self-organized around product development.

The intermediate transition (2016-2019) began when coordination became untenable. Slack hired experienced operators, implemented departmental structures, and built enterprise sales capabilities. Revenue grew from $100M to $600M ARR, but the company experienced classic intermediate-stage tensions: former early employees left citing "too much bureaucracy"; new hires complained about "chaos and lack of process."

By 2020, Slack exhibited mature-stage characteristics: predictable revenue growth (~40% YoY), extensive process formalization, enterprise focus. The 2021 Salesforce acquisition represented mature-stage monetization - extracting value before renewal challenges intensified (Microsoft Teams competition).

HubSpot (Sustained Intermediate Stage, 2006-present)

HubSpot demonstrates deliberate succession management. After pioneer phase (2006-2010), the company transitioned to intermediate stage but avoided premature maturity. HubSpot maintained ~30-40% growth rates by repeatedly expanding into adjacent markets (marketing automation → sales CRM → service platform → CMS).

This represents portfolio succession at intermediate scale: as each product line matures, launch new pioneer products. The company operates simultaneously at multiple successional stages - mature marketing product, intermediate sales/service products, pioneer operations and commerce products.

Figma (Accelerated Pioneer → Intermediate, 2016-2022)

Figma compressed succession timeline through network effects. Pioneer phase (2016-2019) involved product-market fit discovery and viral adoption. Intermediate transition (2019-2021) was rapid: team grew from 100 to 600 in two years, implemented sales organization, added enterprise features.

The 2022 Adobe acquisition ($20B) occurred while Figma was still in early intermediate stage - demonstrating that succession creates value at any stage. Figma's facilitation assets (design file format, plugin ecosystem, user community) made it attractive despite incomplete succession.

Resource Requirements for Stage Transitions

Pioneer → Intermediate Transition:

• Investment: 15-25% of engineering capacity for 12-18 months
• Leadership: Hire 1 senior operations leader + 3-5 functional leads
• Timeline: 12-18 months to establish intermediate capabilities
• Capital: Reserve 6-9 months runway for slower growth during build
• Risk: 20-30% growth rate reduction during transition
• Success Metric: New operational capabilities supporting 3x current scale

Intermediate → Mature Transition:

• Investment: 20-30% of resources shifting from growth to optimization
• Leadership: CFO, COO, and functional VPs if not already present
• Timeline: 18-24 months to optimize at scale
• Capital: Shift to profitability focus, extend runway indefinitely
• Risk: Innovation rate may decline 30-40%
• Success Metric: Consistent profitability, <1.5x burn multiple

Mature → Pioneer (Renewal/Succession):

• Investment: 10-15% of profits into new venture/business line
• Leadership: Separate team led by entrepreneurial GM
• Timeline: 24-36 months to establish viable new business
• Capital: Ring-fence investment, don't expect ROI for 3-5 years
• Risk: Cannibalization of existing business, cultural conflict
• Success Metric: New business reaches $5M+ ARR with own unit economics

Succession Failure Modes: Recognition and Recovery

Understanding failure modes helps you recognize and avoid them:

Failure Mode 1: Premature Transition (Skip Trap)

• What it is: Moving to next stage before current stage capabilities established
• Examples: Series A startup hiring VPs before product-market fit; growth company implementing enterprise process before scaling
• Warning signs: New hires saying "we moved too fast"; process created but widely ignored; reversion to previous stage behaviors
• Recovery: Acknowledge mistake, revert to appropriate stage, build foundations first

Failure Mode 2: Transition Whiplash

• What it is: Changing strategies every 6-12 months without completing transitions
• Warning signs: Leadership announces "new direction" >2x per year; initiatives cancelled before showing results; organization becomes cynical about change
• Recovery: Commit to 18-24 month transition timeline, protect from short-term pressures

Failure Mode 3: Straddling Cost

• What it is: Attempting to maintain dual-stage operations without adequate resources
• Examples: Trying to be both startup-fast and enterprise-reliable simultaneously
• Warning signs: Constant "do more with less" messages; neither stage executed well; burnout from conflicting demands
• Recovery: Choose primary stage, resource adequately, accept tradeoffs

Failure Mode 4: Cultural Rejection

• What it is: Organization immune system rejects stage transition
• Warning signs: Passive resistance to new processes; "That's not how we do things here"; key leaders quit rather than adapt
• Recovery: Diagnose resistance sources, address legitimate concerns, replace intransigent blockers where necessary

Failure Mode 5: Market Timing Miss

• What it is: Complete transition just as market shifts again
• Warning signs: Competitor behavior diverging from your direction; customer feedback misaligned with new strategy; external environment changing faster than you can adapt
• Recovery: Shorten iteration cycles, build scenario planning, maintain strategic flexibility

Managing Transitions Between Stages

Succession is predictable; plan proactively rather than reacting to crises:

• Anticipate and plan transitions: Use diagnostic triggers to identify upcoming transitions 12-18 months in advance
• Communicate succession logic: Help stakeholders understand why change is necessary and what mechanisms are driving it
• Protect transition investments: Shield succession initiatives from short-term financial pressures
• Accept transitional inefficiency: Transitions are messy; temporary performance declines during succession are normal and necessary
• Iterate succession strategies: Initial succession plans rarely work perfectly; adjust based on learning

Optimize your current stage, but invest in your next stage. Do both, not either/or.

Recognizing Alternative Stable States

Organizations should recognize that succession doesn't always lead to single destinations:

Organizations should:

• Identify which stable states are desirable and achievable given their history and capabilities
• Understand what thresholds must be crossed to reach alternative states
• Recognize when current state is becoming unsustainable and transition is necessary
• Design interventions that push systems across thresholds when transition is desired

Embracing Perpetual Succession

Finally, organizations should recognize that succession is not one-time transition but continuous process:

If you're not displacing yourself, someone else is.

The most sustainable organizations treat succession not as a one-time transition but as a fundamental operating mode. They continuously evolve. They experiment with next-stage possibilities while extracting value from current-stage operations. They accept that perpetual change is necessary for long-term survival.

When NOT to Apply Succession Thinking

The succession framework is powerful but not universal. Recognize when it doesn't apply:

Don't use succession thinking when:

1. Your business model is fundamentally broken: Succession assumes a viable business creating assets for future stages. If your core business has no path to viability, you need pivots or shutdowns, not succession management.

1. You're facing existential short-term crisis: Succession is a long-term framework. If you have 3 months of runway and no path to profitability, focus on immediate survival, not multi-year succession planning.

1. Your industry is disappearing entirely: Succession helps navigate predictable stage transitions within viable industries. It doesn't help typewriter manufacturers transition to personal computers or video rental chains transition to streaming - those require complete reinvention, not succession.

1. You're optimizing within a single stage: Not every organizational challenge is succession-related. If you're a stable mature company optimizing operations, most challenges are execution issues, not succession transitions.

1. You're making product decisions: Succession applies to organizational evolution, not product roadmaps. Don't confuse product iterations with organizational succession.

Use succession thinking when: You have a viable business, sufficient runway for multi-year planning, observable signs that current-stage approaches are reaching limits, and need to understand what organizational capabilities your next stage requires.

Key Concepts: The Succession Lexicon

This chapter introduces several signature concepts for understanding organizational evolution:

Conclusion

When Mount St. Helens erupted in 1980, the devastated landscape appeared permanently destroyed. The blast zone stretched 230 square miles of gray pumice where ancient forest had stood hours before. To observers surveying the sterile wasteland, recovery seemed impossible for generations.

Yet within decades, succession transformed death into renewal. Forty-five years later, the blast zone contains young forests with 200+ plant species, developing soil layers, emerging understory communities, and thriving wildlife populations. Ecologists measuring the recovery document successional patterns predicted by theory: pioneer colonization enabling intermediate species enabling late-successional dominance. The timeline differs from the original old-growth forest - centuries rather than millennia - but the mechanisms remain identical.

This recovery followed laws, not miracles. Pioneers colonized harsh conditions through high dispersal and stress tolerance. They modified environments - acidifying rock, fixing nitrogen, moderating temperature - to enable species that couldn't survive initially. They were gradually replaced by more competitive species optimized for resource-limited, stable conditions. The progression toward mature forest continues, measured in centuries.

For organizations, succession offers both conceptual framework and practical guidance for long-term renewal.

Stora Enso's seven-century evolution from copper mining to biomaterials demonstrates facilitation across stages. Mitsubishi's repeated reinventions across Japanese economic history demonstrate portfolio succession through multiple states. Shell's attempted energy transition demonstrates the challenges of mature-to-pioneer succession. Together they demonstrate that organizational longevity requires embracing succession.

This means recognizing when current strategies are reaching limits. Understanding what enables next-stage strategies. Managing transitions deliberately rather than reactively.

The framework synthesizes several core principles. First, diagnose your successional stage through organizational characteristics and quantitative metrics. Second, understand succession drivers - internal scale effects, external market forces, facilitation and inhibition mechanisms. Third, manage succession deliberately through stage-appropriate strategies. Fourth, avoid succession traps. Fifth, recognize alternative stable states and threshold effects. Finally, embrace perpetual succession rather than seeking permanent climax.

Organizations that rigidly defend current business models, capabilities, and cultures against succession pressures become vulnerable to catastrophic disruption. Those that embrace succession - investing in next-stage capabilities while extracting value from current-stage operations, facilitating transitions proactively, and accepting transitional inefficiency as cost of renewal - position themselves for multi-generational persistence.

Biological succession demonstrates that renewal is natural. Destruction and creation are coupled. Long-term persistence requires navigating predictable stages while adapting to contingencies.

Organizations that internalize these lessons achieve alignment with profound patterns. Current success contains seeds of future challenges. Transitions require both preserving past value and creating future capabilities. Sustainability emerges not from stability but from continuous renewal.

These patterns have enabled biological systems to persist and evolve across billions of years.

The forest returning to Mount St. Helens is not identical to pre-eruption forest, but it is forest nonetheless. It is alive, complex, functional, and continuing its successional journey.

Organizations navigating succession should aspire to similar outcomes: not unchanging permanence but continuous regeneration, maintaining identity and purpose while perpetually renewing the forms through which that identity and purpose express themselves.

References

Clements, F.E. (1916). Plant Succession: An Analysis of the Development of Vegetation. Carnegie Institution of Washington Publication No. 242, 1-512. https://www.biodiversitylibrary.org/bibliography/56234 [OPEN ACCESS]

• Foundational work establishing the organismal concept of succession and climax theory that dominated early 20th century ecology

Gleason, H.A. (1926). The Individualistic Concept of the Plant Association. Bulletin of the Torrey Botanical Club, 53(1), 7-26. https://www.jstor.org/stable/2479933 [PAYWALL]

• Challenged Clements' climax theory by arguing plant communities are assemblages of individuals responding to environmental gradients, not unified organisms

Dale, V.H., Swanson, F.J., & Crisafulli, C.M. (Eds.) (2005). Ecological Responses to the 1980 Eruption of Mount St. Helens. Springer. https://link.springer.com/book/10.1007/0-387-28150-9 [PAYWALL]

• Comprehensive 25-year synthesis of interdisciplinary research on ecological recovery following the Mount St. Helens eruption

Lipman, P.W., & Mullineaux, D.R. (Eds.) (1981). The 1980 eruptions of Mount St. Helens, Washington. U.S. Geological Survey Professional Paper 1250. https://pubs.usgs.gov/pp/1250/ [OPEN ACCESS]

• Primary government documentation of the eruption's geological and ecological impacts

Walker, L.R., & del Moral, R. (2003). Primary Succession and Ecosystem Rehabilitation. Cambridge University Press.

• Modern synthesis of primary succession mechanisms including facilitation and environmental modification

Siltanen, R. (2011). The Real Story Behind Apple's 'Think Different' Campaign. Forbes. https://www.forbes.com/sites/onmarketing/2011/12/14/the-real-story-behind-apples-think-different-campaign/ [OPEN ACCESS]

• Firsthand account from the creative director who led Apple's 1997 brand transformation under Steve Jobs

Isaacson, W. (2011). Steve Jobs. Simon & Schuster.

• Authorized biography documenting Apple's 1997-2011 turnaround including the elimination of 70% of product lines and return to profitability