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90Principle · Group 11

Red Queen Effect

Red Queen effect in business

“In competition, you hold your place only if you keep developing, because the others do too, and if you stand still, you fall behind.”

In a world where everyone is improving, standing still is not a neutral state.

Group 11: Uncertainty and CrisesT8 Uncertainty and Change
Go to the in-depth section ↓
Parallel teal lines run to the left like belts, each carrying a dot that runs to the right and yet stays in its place. A mist-blue dot stops and is carried out of the image; a gold one runs faster and slowly pushes ahead; finally all the belts stop briefly, and a small frame marks the pause.
In short

In competition, you hold your place only if you keep developing, because the others do too, and if you stand still, you fall behind.

What it’s about: In a world where everyone is improving, standing still is not a neutral state. Every advance by others shifts the standard: what was good yesterday is average today and outdated tomorrow. So your effort does not count on its own; it counts only in comparison. Like the Red Queen in Lewis Carroll’s story, you have to run just to stay in the same place.

In depth

The principle in detail

Three steps through the principle: grasp it, place it, put it to work. Open each topic on its own.

The core messageCore statement and 3 clarifications
In essence

In competition, your standing is relative. If you don’t keep developing, you fall behind, even without getting worse.

It does not say
That every competition is a zero-sum game. If you open up a new field, you can sidestep the race.
It does not say
That speed helps against everything. Many crises go back to external shocks that no amount of learning protects against.
It also says
The race itself can become destructive if it eats up all your strength or ends in an arms race.
The explanationPast success offers no protection.
  • Past success offers no protection.
  • Size, tradition and experience help only as long as they are turned into renewal.
  • At the same time, the race needs breaks and the strength for genuine innovation.
The question

What is the last thing you learned, and how do you notice that others are learning faster?

The signs3 signs when you heed it · 3 when you overlook it
When you heed it
  • You know what has changed among the best in your field over the past year.
  • Development is part of the plan even in good times.
  • Alongside day-to-day business, there is time for new things.
When you overlook it
  • You explain your success by what worked years ago.
  • Change begins only once you are visibly lagging behind.
  • New competitors never come up in your conversations.
The backgroundTradition T8 Uncertainty and Change
  1. 1871
    OriginLewis Carroll

    Through the Looking-Glass, and What Alice Found There

  2. 1973
    OriginLeigh Van Valen

    A New Evolutionary Law

  3. 2008
    SupplementedWilliam P. Barnett

    The Red Queen among Organizations

  4. Tradition T8
    TraditionUncertainty and Change

    Pierre Wack, Nassim Nicholas Taleb, Leigh Van Valen, James G. March

    See the tradition on the Origin page
Read more: the full background

The principle comes from Lewis Carroll’s “Through the Looking-Glass, and What Alice Found There” (1871) and Leigh Van Valen’s essay “A New Evolutionary Law” (1973). It is supplemented by William P. Barnett’s “The Red Queen among Organizations” (2008).

The research4 sources: 2 primary studies, 1 theory, 1 classic · 1871–2008 · with limitations of the research
4 sources1871–2008 period2 primary studies1 classic1 theory
Strength of evidence
  1. weak
  2. moderate
  3. strong

The finding on extinction and the studies of companies support the core; Leigh Van Valen’s law does not hold for all groups, and the transfer to individual leaders is an argument by analogy.

  1. 1871
    Classic
    Lewis Carroll

    “Through the Looking-Glass,” chapter 2: Alice runs with the Red Queen and yet stays in the same place.

  2. 1973
    Primary study
    Leigh Van Valen

    “A New Evolutionary Law”: in the fossil record, the probability of extinction does not depend on the age of the genera; explained by a constant race between species.

  3. 1980
    Theory
    William D. Hamilton

    “Sex versus Non-Sex versus Parasite”: the race with parasites as an explanation for sexual reproduction.

  4. 2008
    Primary study
    William P. Barnett

    “The Red Queen among Organizations”: tough competition often makes firms more capable; experience with old competitors can lead them astray in new markets.

Where the research reaches its limits
  • Not every competition is a zero-sum game; if you open up a new field, you can sidestep the race.
  • Many waves of extinction and corporate crises go back to external shocks that no amount of speed can counter.
  • Leigh Van Valen’s law of constant extinction risk does not hold for all groups.
  • The race itself can become destructive, as in an arms race.
  • The transfer from species and firms to the individual leader is a metaphor, not a measured result.
Read more: what research shows

In 1973, Leigh Van Valen found in the fossil record that the probability of a group dying out does not depend on the age of its genera. He explained this with a constant race between species in which none gains a lasting lead, and he named the explanation after Lewis Carroll’s Red Queen. Graham Bell and William D. Hamilton later used the idea to explain sexual reproduction. William P. Barnett applied it to companies. His studies suggest that firms that have experienced tough competition often become more capable, but that their experience with old competitors can also lead them astray in new markets. For leaders, this is an extrapolation from biology and organizational research, not a separate finding.

The related principles61 Security Dilemma · 72 Blue Ocean · 76 Disruption · 81 Path Dependence
Disruption

An innovation can reset the race and devalue old leads (76 Disruption)

Security Dilemma

In an arms race, the Red Queen Effect becomes a spiral (61 Security Dilemma)

Blue OceanPath Dependence

If you open up a new field, you can sidestep the race (72 Blue Ocean), and earlier decisions can prevent you from keeping pace in time (81 Path Dependence)

Read more: the full text

An innovation can reset the race and devalue old leads (76 Disruption); in an arms race, the Red Queen Effect becomes a spiral (61 Security Dilemma). If you open up a new field, you can sidestep the race (72 Blue Ocean), and earlier decisions can prevent you from keeping pace in time (81 Path Dependence).

The action steps5 things you can actually do

  1. Once a quarter, look at what has changed among the best providers or teams in your field, including those you have not seen as competitors so far.

  2. Decide for yourself and your team what you want to learn this year, and measure it.

  3. Start renewing while things are going well. By the time you are visibly lagging, the gap is usually already large.
  4. Plan breaks. A race without rest uses up the strength you need for genuine innovation.

  5. Ask whether there is a field in which you don’t have to join the race because no one is running there yet.

The reflection questions3 questions for you or for a conversation
  1. What do you still do exactly as you did five years ago, and is it still as good by comparison as it was then?
  2. Who in your field is learning faster than you right now?
  3. Where are you joining the race even though you could look for a different field?

Take your time with one question. Write down your answer – or talk it over with someone you trust.

To finish
The picture to rememberThe animation once more, with an explanation
  1. Parallel teal lines run to the left like belts, each carrying a dot that runs to the right and yet stays in its place
  2. A mist-blue dot stops and is carried out of the image
  3. A gold one runs faster and slowly pushes ahead
  4. Finally all the belts stop briefly, and a small frame marks the pause
Strategy Check

What is the last thing you learned?

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In context

Group 11: Uncertainty and Crises

Guiding question: How do you keep your ability to act when the future is open?

Stage 5 of 5: Persevere and adapt

Where the 92 principles come from: eight traditions of strategy, from classical war theory to dealing with uncertainty.

More about the origin

Background: WEGVISOR’s own selection from the strategy literature · More about the origin

Examples

The principle in practice

From the different spheres of society.

Education

Leigh Van Valen and the Red Queen Effect

In 1973, the paleontologist Leigh Van Valen shows that a group of animals is not safer from extinction just because it has existed for a long time. His explanation: all species keep evolving, and those that don’t keep up lose. He names this after a character from “Through the Looking-Glass”: the Red Queen.

Red Queen Effect
Government

HMS Dreadnought and the Red Queen Effect

In 1906, the British navy commissions a battleship that outclasses all previous ones. In doing so, it also devalues its own superior fleet, and the arms race with Germany starts almost from scratch. Britain has to run just to stay ahead.

Red Queen Effect
Business

Gordon Moore, Moore’s Law and the Red Queen Effect

In 1965, the chemist Gordon Moore predicts that the number of components on a chip will double at regular intervals. His observation sets the cadence for an entire industry. Every manufacturer has to keep up, and if you miss a round, you fall behind.

Red Queen Effect
MediaBusiness

Movie: The Devil Wears Prada

In “The Devil Wears Prada” (2006), a young graduate lands in the fashion world, where every season devalues everything that came before. Even the powerful editor-in-chief Miranda Priestly has to fight constantly just to hold her place.

Red Queen Effect
FAQ

Questions about the Red Queen Effect

What does the principle of the Red Queen Effect say?

In competition, you have to keep developing just to hold your place, because the others are improving too. Standing still therefore means falling behind.

Where does the Red Queen Effect come from?

The name comes from Lewis Carroll’s “Through the Looking-Glass” from 1871. The paleontologist Leigh Van Valen formulated it as a scientific hypothesis in 1973 in his essay “A New Evolutionary Law.”

What are some examples of the Red Queen Effect?

Leigh Van Valen’s finding on the extinction of animal groups, the arms race after HMS Dreadnought in 1906 and Moore’s law in the chip industry.

How well is the Red Queen Effect supported by research?

Evidence: moderate – the finding on extinction and the studies of companies support the core; Leigh Van Valen’s law does not hold for all groups, and the transfer to individual leaders is an argument by analogy.

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