LESSONS FROM ANTIFRAGILE ORGANISATIONS

Developing resilient organisations

Over the course of 2023, I worked with numerous organisations to improve their resilience to unanticipated shocks and disruptive change. By using the key principles of ‘antifragile’ practice and leadership, I gained 7 key insights into how these organisations significantly boosted organisational resilience.

Some of these insights were obvious - although not commonly practiced - while others were quite counterintuitive and challenged conventional practice.

In varying degrees, each of these practices were associated with growth and development of new capabilities - despite adverse conditions in their markets. Clearly, some of these practices will have more applicability for you than others.

1: Be prepared to learn and change your mind

Since many of you work in complex situations where there is no clear best practice, many answers to your challenges will emerge as you move forward. Whether it’s a change management process or a launch of a new product, you will not know the answer at the beginning of the process. Be prepared to learn as you go and change your mind as the evidence presents itself.

2: Listen to people with skin in the game

The people who do the work will always have a good understanding of what will work or not. While leadership is not a democracy, inviting and considering the views of those who are closely involved in the “doing” will give you a better sense of the possibilities and limitations of an initiative. Include the views of those who are usually critical or averse to your views — this will increase the robustness of your thinking and proposed approach.

3: Plan for the future by considering key uncertainties

All too often, uncertainties in your environment are considered risks to the strategy. These often find their way into a “risk register” or are simply ignored. Either way, they are not usually included as an important element of the strategy moving forward. Instead, take a more proactive stance and identify the really high impact issues for which there is the greatest uncertainty. These “high-impact, high-uncertain” issues represent the alternative futures in which your business might need to perform. Consider the capabilities needed win in these future scenarios, and include these as part of your future strategy.

4: Separate your planning and strategy processes

A plan is not a strategy. Strategy is a learning process that uses divergent thinking to generate new insights and breakthroughs. Planning, on the other hand, is an action-oriented process that uses linear and convergent thinking to set targets and KPIs. Both are important, but completely different. Because “action is often the enemy of thought” combining the two will limit the strategy process and the possibility of new thinking. Strategy and planning, therefore, are best separated into different forums.

5: Innovation is enhanced by psychological safety

Encouraging questioning, experimentation and diverse views are some of the enablers of innovation in organisations. We see that many of the “breakthroughs” in organisations are developed by people doing the work rather than in more formal R+D functions. The curiosity, experimentation and willingness to challenge the status quo will only occur if people feel comfortable in questioning decisions and making small errors as they try new things. Psychological safety allows this challenging behaviour to occur.

6: Don't over-leverage key processes?

Conventional practice suggests that we make our assets “sweat” by increasing their utilisation, thereby improving ROI and reducing cost per unit. The need to improve efficiency often results in the centralisation of these processes and assets. However, this efficiency is usually accompanied by two unintended consequences. Firstly, the increased streamlining of the process will limit its ability to respond to a sudden change in requirements because of the “tight coupling” of the different elements in the process. Secondly, the organisation’s fragility is increased, since the failure of the highly leveraged process can often cause widespread damage to the rest of the organisation.

7: Encourage redundancy in selected areas of the organisation

Related to the over-leveraging principle, is the practice of identifying a few critical processes or areas that might be deemed “mission critical”. These are things in which failure would threaten the whole organisation. An example often used is the dual braking systems in cars. In these instances, a process of deliberate redundancy will greatly improve the resilience of the organisation. While this is likely to increase costs in the organisation, these may be seen as “business continuity insurance”.

Antifragile practices improve resilience

While some of these antifragile practices might seem to challenge what we understand as modern management practice, I have repeatedly seen many of them used to improve the resilience of organisations in different sectors of the economy. It may take some “out of the box” thinking by leaders to put them into place, but is this not the source of all competitive advantage?

My follow up article will address the behaviours and characteristics of the leaders who enable these practices and improve the resilience of their organisations.?

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