Antifragility for Innovative Corporations
¨While individual organisms are relatively fragile, the gene pool takes advantage of shocks to enhance its fitness¨
Nassim Nicholas Taleb, author of Antifragile
Likewise, for a corporation not to be threatened by the inevitable volatility, fragility among its parts is necessary. The risk taking of its parts will benefit the whole.
Many times we have read that technology is advancing at a faster pace every day. Think about the technological milestones we have overcome since the industrial revolution, and the acceleration of technology and its impact in the 21st century. Websites like worldometer or graphs like the one bellow are living proof of how our world is accelerating.
The consequences of this acceleration are the following:
- Change is happening faster: therefore it’s in the personal interest of managers to be prepared as consequences will happen during their careers.
- Uncertainty is increasing: As more things are happening at bigger scales, the possible outcomes and their impact are multiplying. Therefore, it is more important than ever to be antifragile, which is something that doesn’t only withstand shock and variability, but improves because of it.
How can organizations become more antifragile? #
As mentioned in our paper on increasing returns, it’s innovate or die. Innovation will increase the chances of survival of the corporation but this isn’t enough to make it antifragile. If a company invests a large part of its resources on an innovative product it is not preparing for uncertainty but rather the opposite, by betting on future market predictions. However, if risks are taken on many fronts, by distributing the budget on many diverse innovation products, the corporation is multiplying its chances of being adapted and ready for the future environment.
As Taleb explains: ¨Some parts on the inside of a system may be required to be fragile in order to make the system antifragile as a result.¨ Hence, some projects and products must be fragile and will sacrifice themselves in order to make the corporation antifragile as a whole. Taken a step further, in some cases companies will benefit from self-inflicting themselves stress to get stronger, following the concept of autophagy. This has been seen when companies create a crisis to launch a major change.
Many well-known companies like Google seem to be following the logic of seeking antifragility, by looking into very diverse projects and applying the 20% initiative where employees have one day a week to work on their side projects. Others have applied it by launching several teams in parallel to compete while developing the same product, using different starting points.
Innovation is about pushing boundaries into unknown terrain, hence uncertainty is a given. Antifragility might be the right credo for these companies to follow, however this raises a few questions:
- What kind of management and culture is necessary for antifragility?
- Is your corporation ready to take the costly risks and house fragile projects or departments out of which some will fail?
- How does this fit with the traditional idea of focusing on core that Harvard Business Review papers insist on?
- And finally, isn’t it best for the whole that companies, not departments, are fragile in order to have an antifragile economy?
Author: C. Criado-Perez #
References #
- N. N. Taleb, Antifragility
- E.Dib, Increasing Returns: Innovate to Remain Relevant
- C. Wickham Skinner, HBR: Focused Factory