Umair just got his new spot at HBSP and started off with a great post on com­pa­nies DNA.His DNA term and exam­ples have been met with var­i­ous reac­tions, judg­ing by the com­ment. I’ll pro­pose some­thing: com­ple­ment the DNA con­cept with the “lean (body) mass” one. Let me explain:DNA is a great con­cept but has its lim­i­ta­tions, specifically:

• Leaves lead­er­ship (at all lev­els) out of the equa­tion — lead­er­ship mat­ters and can change rad­i­cally a company
• Seems to ignore the —admit­tedly few— suc­cess­ful turn­arounds of slowly decay­ing com­pa­nies (lots of this actu­ally hap­pens with small and mid­size organizations)
• Focuses on com­pet­i­tive advan­tages but leav­ing out the past, and the mar­ket dynam­ics — while I do agree with Umair that DNA focuses on the cru­cial part of strat­egy, we still ben­e­fit from look­ing at the whole picture

So let me push the DNA metaphor fur­ther and pro­pose to char­ac­ter­ize com­pa­nies not only along their DNA but also along their lean body mass (I’ll use the term lean mass (LM) for com­pa­nies), which can be very roughly described as a ratio of mus­cle mass/fat mass. Two inter­est­ing facts about LM:

• It is one of the best indi­ca­tor to pre­dict mor­tal­ity: the more you have lean mass the bet­ter it is, the less fat also the bet­ter of course
• It’s very dif­fi­cult to gain: no mat­ter what your DNA and phys­i­cal qual­i­ties, you have to train and exer­cise in the right ways to gain LM

We can then push the bio­log­i­cal metaphor fur­ther and use LM to describe the sum of the past strate­gic deci­sions made by a com­pany. You made a good of good strate­gic moves that cre­ated rents for you, you gained mus­cles; you made lots of bad moves, you built fat.The first key char­ac­ter­is­tic of this con­cept is that it is dynamic: you can very sig­nif­i­cantly change your LM over time. Your DNA is what will deter­mine the time­frame, but you can always improve by train­ing and lose when eat­ing at McGarbage everyday.

The sec­ond key ele­ment of it is that lead­er­ship greatly influ­ences how hard and how fre­quent you train. Sure, each leader still has to do with the DNA he finds at his orga­ni­za­tion, but he can impulse a great deal of change too.

The third ele­ment actu­ally links back to the MSFT exam­ple taken by Umair in both his post and video answer to a reader (that fea­ture is cool!). When looked only from its DNA per­spec­tive, MSFT is dead. But, hey said Rao “its busi­ness apps, server apps are grow­ing nicely, and its desk­top dom­i­nance is inplace for next few years. Microsoft in decay seems like a broad­brush to me.” That’s right, MSFT built a lot of Lean Mass over the years, and that’s what explains its posi­tion. How­ever, like the dinosaurs, it’s con­demned by its DNA. The sum of its strate­gic moves (YHOO deal, fat or mus­cle ?) will now deter­mine how quickly it’ll die.So, at a frame­work level we get:

• DNA: intrin­sic capac­ity to inno­vate, per­ceive com­pet­i­tive advan­tage in the edge econ­omy, and exe­cute on them
• Lean Mass: sum of all the past strate­gic deci­sions, along with their con­se­quences, a com­pany made
• DNA Engi­neer­ing: replace some parts of the company’s DNA to improve its intrin­sic capacity
• DNA mate­ri­al­iza­tion: cre­ate new orga­ni­za­tion, with new DNA (but some hered­ity from the par­ents — all the stakeholders)

The last 2 points of this frame­work refer to the nature and com­po­si­tion of DNA. I sus­pect it will be dif­fi­cult to go from a sub­jec­tive feel­ing of evi­dence to a rig­or­ous academic-like frame­work. We can also take a short­cut and take the macro prin­ci­ples approach: develop a coher­ent set of MP and see which com­pa­nies under­stand and mas­ter them (use­ful dis­tinc­tion for growth-mode com­pa­nies). That should be a good proxy for DNA qual­ity… Do you think so or not ?