Explore-Exploit And Specialization

At any given point in time, some specialists are unsuccessful, and some generalists are very successful. Is there a way to explain this, Mister Specialization?

The model that most helps me make sense of this is the Explore-Exploit Tradeoff. Like all models, even all useful models, this one simplifies the world; it simplifies the world into two behavioral modes: we're either seeking abundant resources, or exploiting a discovery of adequate or abundant resources. (Think of "exploiting" as "making use of", not the other meaning of "taking unfair advantage of".)

The most raccoons I've ever seen in one place in my life was a campground in California around dusk. They were fat and happy raccoons too :) The campground provided a concentration of abundant resources for them in the form of un-protected garbage cans and other food sources literally lying on the ground waiting to be eaten. There was no need to explore a many-miles-large radius seeking food. This is one picture of what exploit mode looks like.

Sometimes life lands some of us directly in a resource-rich context without much or any exploration needed on our part. Think of the archetypical "trust fund baby", or the beneficiary of the first-mover advantage. Other times, we need to go through an exploration phase -- trying different things -- before we find our way to that context that has resources we are able to exploit (or maybe we explore different ways of exploiting the resources already available to us in order to actually unlock their value). Most of us will then switch into an exploit mode, and our behavior changes. We don't wander around in search of more resources. Instead we focus on making the most of the resources we now have access to.

In a business context, that exploitation (again, in the sense of "making use of", not "taking unfair advantage of") might look like rather unfocused behavior. If for whatever reason we find the idea of specialization aesthetically appealing, we might find this unfocused behavior somewhat repulsive. Or, if we found specialization to be a powerful tool for us, we might be concerned about setting that tool down in favor of different tools. Strategically, I don't think there's much basis for criticizing a switch from exploration to exploitation, though.

If our goal is to earn as much money as we can over the course of our careers, being really effective "exploiters" is a good strategy, and so once specialization (or whatever strategy got you to a resource-rich context) has served its purpose, it makes sense to switch to strategies that exploit the available resources more broadly. The risk-seeking, highly-focused approach of the explore mode just imposes cost and constraints that don't make sense in an exploit mode.

If our goal is to create as much positive impact in the world as possible, the same switch from exploring to exploiting will make sense once we've found a context where we can have the desired impact. The gently wandering or staccato experimentation of the explore mode interferes with the steady, hypnotic drumbeat needed for broad + deep cultural impact.

If our goal is to follow the deeply-ingrained idea that a career is "paying your dues" in your 20's and 30's and reaping the rewards of that investment in your 40's and beyond, then the decade of your 40's looks like a transition from explore to exploit mode. I don't think this idea of a 4-decade career arc works anymore, BTW, but even on a shorter timescale the same pattern manifests often enough.

Diagrams - Explore Exploit and Specialization.jpg

Whether we're in a job or self-employed, most of us will spend some time in both the explore and exploit modes. Both are necessary and rewarding in their own way. The exploit mode rewards more in the form of money and impact, but the explore mode has its own kind of rewards, though they might be more of the character-building variety. :)

I wish I'd used this model as a meta-framing in The Positioning Manual For Indie Consultants. There are hints of this kind of thinking there, but explicitly talking about the two behavioral modes of exploration and exploitation is a really nice way to contextualize when specialization is most valuable and when it's less valuable.

One specific admonition to close: the diagram above depicts starting in explore mode, switching to exploit mode (as specialization has perhaps helped you discover an exploitable context), and then cycling back to explore mode. Don't think of this exploit -> explore transition as starting over from scratch. Usually it isn't. Instead, you take many "portable" resources with you into this next exploration phase:

So the second (and perhaps third and beyond) time you enter an explore mode following a nice, abundant, enjoyable exploitation phase, you do so with the flexibility, wisdom, and resilience that you learned during your first explorations. Even if the exploit phase has made you a very fat and lazy raccoon, I'm sure you can dig deep enough to find that those emotional and intellectual resources are still within you. And if you didn't get to chose the timing of re-entering your second explore phase (perhaps the platform you specialized in has started to cut the legs out from under your business), I hope you're heartened by knowing that those portable resources can often be assets that help you reach the next exploitable context.