3 Strategy Modes That Make Your Organization Antifragile

Most organizations are poorly equipped to weather a major crisis, let alone re-imagine their strategy mid-flight.

Those organizations fortunate enough to make it through COVID-19 (or even smaller-scale events in the future) will have found creative new ways of working that are remote, secure, and cost-optimized. Making it through and being successful on the other side of the crisis requires pivots to strategy. There are three modes to this:

1. Crisis Mode: laser-focused “crunch” period of keeping the lights on and positioning just enough for long-term, post-crisis success.
2. Transitional Mode: the reflective and interim passage out of crisis to a better, more resilient state.
3. Emergent Mode: today’s new steady-state — taking lessons learned from the crisis and also evolving strategy as additional circumstances require.

Photo by Brian McGowan on Unsplash

In #1, this is about battening down the hatches and getting hyperfocused on escaping the crisis in a satisfactory state. Then you can get back to “normal” operations, right? Wrong.

We aren’t going back. Especially with our new digital mainstream, “normal” has shifted…do you feel it? And it’s going to transform for months after the crisis is over. Untold changes will unfold across markets and society as we know it.

That’s why #2 is so important. Organizations need to take their learnings — and those of others — and reimagine their long-term business strategy. And finally, #3 helps us always be at the ready, because volatility is a constant.

Through this cycle, organizations can increase their antifragility.

It’s no longer viable to simply plan on “bouncing back” from a crisis. Nassim Nicholas Taleb stresses how being antifragile is something more important:

“Antifragility is beyond resilience or robustness. The resilient resists shocks and stays the same; the antifragile gets better.”

Being antifragile is a hallmark characteristic of today’s most successful organizations, and crises reveal who has it and who doesn’t.

With this in mind, there are three strategy modes that organizations need to shift in and out of as the external environment changes. Each mode builds on the prior as part of a continuous cycle.

Crisis Mode

Photo by Brian McGowan on Unsplash

This is the time that organizations see what they’re made of. Crises test the culture and the connective tissue that’s been built to date. But we can’t continue on the same old course. It’s time for a sharp turn, and people need to hold on to their seats…it will get uncomfortable. As crisis hits, here are the milestones that organizations need to work through in under a week:

1. Rally your leadership team: quickly get folks comfortable with needing to adjust course and build in contingencies — you don’t know how long the crisis will last. Your old strategy is about to be trashed.
2. Establish clarity on NEEDS versus WANTS: Organizations will need to make tough calls. Yes, we must ensure secure remote working capabilities. And yes, we need to focus on a few select customer accounts — those that (a) contain an active pipeline and (b) can produce large payouts (bang for the buck). No, we can drop that marketing effort and — gulp — halt all recruiting efforts right now. These are examples, but the “needs” list should be a consolidated one-pager that is clear and obvious.
3. Validate required operational efforts and investments: With your leadership team on the same page, cascade the knowledge to make sure all teams are working on critical tasks only. Team leaders need to re-prioritize resources and validate that the reconfigured workload is going according to plan — truly focusing on the essential.
4. Establish high-tempo, transparent communications: The New Work model is kicking us in the face and saying, “I’m here!” Alright, let’s adapt. Once everyone is on the same page regarding vital jobs to be done, we need to communicate as a sophisticated network — a team of teams. In times of crisis, leaders need to be open and increase their vulnerability. These are tough times, and your people want to see the human side of you…but not so much that you’re breaking down. Be strong, but also touch their hearts.
5. Conduct exercises to hedge against more adversity: Practice what Stoic philosophers call premeditatio malorum — the premeditation of evils. Despite currently being in crisis, leaders need to think like chess grandmasters — always planning several moves ahead. Have an expert facilitator guide the leadership team through at least one tabletop exercise or simulation to test new scenarios. Ask, “how might this get worse?” and inject plausible details for the group to react to. Test both macro (e.g., industry health) and micro (e.g., communication technology) aspects to stretch peoples’ minds and obtain creative responses. Pro tip: use a facilitator skilled in human-centered design.

Outcomes:

• 30-day action plan: a clear “must do” list, including resources required and an Agile-based tracking mechanism
• Contingency plan: a package of if-then scenarios that give you “levers” to pull in the event of more negative events (e.g., extended crisis period, technology outages, customer losses)
• Transitional Mode Hypothesis: a living document that notes how the business needs to change in the future when things are back to “normal”

Transitional Mode

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At this point, the skies start to clear up and we can begin lowering DEFCON levels back to reasonable states. And since you’ve successfully navigated Crisis Mode, you’ve now earned the right to enter Transitional Mode — a strategic rebaselining of where the organization is headed and why.

This is an ephemeral moment where leaders need to use the insights gathered from Crisis Mode while also digging deeper. Reflect on the following:

• Where did we fail? What were our successes?
• How did our communication and coordination look?
• What processes can we enhance? Which ones can we drop?
• How can technology aid our new steady-state?
• What’s the refreshed list of customer problems?

Learning is the hallmark of a successful transition. By learning how the organization — and others — made it through, we can thrive in Transitional Mode by generating great ideas for a better future and then operationalizing them in Emergent Mode.

Outcomes:

• Post-Crisis Analysis: A clear and honest take on recent successes and failures, paired with opportunities for steady-state enhancements
• Emergent Mode Injects: Specific, detailed improvements that can be readily implemented, centering on “quick wins” and strategic big rocks

Emergent Mode

“Be a boxer, not a gladiator, in the way you act on your principles. The gladiator takes up his sword only to put it down again, but the boxer is never without his fist and has only to clench it.” — Marcus Aurelius

Emergent Mode is today’s new steady-state for operating an organization. It’s the antithesis of strategy lock-in. Instead, it’s about always being ready for something new, anticipating that things will change, and having an approach for rapidly pivoting as the need arises.

Based on the emergent strategy concept coined by Professor Henry Mintzberg, Emergent Mode requires an organization to grapple with reality. It’s where intentions (i.e., a strategic plan) collide with a changing environment, and compromise is required. As the great philosopher, Mike Tyson said, “everyone has a plan until they get punched in the mouth.”

When leaders have an open mind and a process and culture that allows for pivoting, a refreshed strategy continually emerges.

To be clear, we need a healthy tension between planned and emergent strategy. No organization is going to sustainably succeed merely flying by the seat of their pants, simply catching opportunities that come their way. It’s vital to have a long-range ambition that brings inspiration and clarity, though the “how we get there” should be open to alteration.

As counterintuitive as it might seem, there’s a deliberateness to Emergent Mode. It’s a way of being — focused on agility. Like a tennis player in the ready position, organizations also need to ensure their “footwork is quick, light and moving in the right direction.”

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When exiting crisis and situating back in Emergent Mode, focus immediately on what you identified in Transitional Mode — implementing quick wins and launching “big rock” strategic initiatives. Get these pieces rolling.

At the core, Emergent Mode requires a robust learning engine. It’s functionality that we enable for discovery and strategy refinement. For it to work, we need to turn on relevant “sensors” in the organization (human, machine, and otherwise) to start listening and analyzing. Are we making progress? What just failed? How is the customer environment changing? Find the signal in the noise, and then bring those insights back to the center.

The learning engine should be lightweight and customized for the given organization. At the core, it should include (a) a small set of capabilities designed to consume several key “learning” variables from the operating environment and (b) a simple organizational structure and process for dissecting the information and deriving new insights that’ll help you update the digital strategy.

Outcomes:

• Quick win implementation: Investing in no-regret moves that bring immediate value to the business (e.g., upgraded digital collaboration platform, fewer meetings, Agile ways of working)
• Big rock kickoff: Launching the few must-have investments or projects that you deem vitally important to the future of your business (these should overlap 80% with your strategic goals)
• Learning engine development: The sensory processes, tools, and organizational structure for continually scanning the ever-changing business ecosystem and developing insights that inform emergent strategy

Conclusion

This prescient view from Kristin Wilson was spot on: after COVID-19, we’re never going back to normal. It’s time to fixate on becoming antifragile and get exceedingly comfortable with change and apply that to strategy. Pivoting carefully through the different modes — Crisis, Transitional, Emergent — is how organizations can keep strategy on point and future-proof the business from the chaotic shocks that will continue and capture the abundance that always lies untapped.

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Originally published on matthewdoan.com