Disruption

Today, resilience appears to be the answer to anything challenging. What’s not to like about bouncing back stronger after experiencing adversity, trauma or significant stress. Nassim Nicholas Taleb described unexpected, high impact events as black swans. Such events can have a seismic effect on societies, industries, companies and individuals.

The problem today is that disruption isn’t simply a significant isolated event, it’s a new planetary operating model. Black swans are known for their exceptional gregariousness. It appears to be similarly true of their metaphorical twin. So imagine herd after heard of black swans waddling into your corporate HQ. They will cause quite a mess whether they arrive in physical form or just conceptual.

Resilience will get you through one black swan event. Like an intrepid Antarctic explorer, you grit your teeth and keeping moving through the storm. This has an energetic cost, but you know that the storm will end at some point.

But today there is no storm ending in sight. If anything disruptive forces are compounding and conflating in a manner that makes the world we live in not just a complex environment, but increasingly a chaotic one. A butterfly flaps its wings in the Philippines, and my beach holiday is ruined, as the theory goes. Or make that a fruit bat in central Africa.

Now imagine we replace wings with:

• Global tariff wars

• AI overexuberance

• Extreme weather

• Increasing social disparity

• Wars, and pre-wars, for natural resources

• Middle class disillusionment

• Plummeting birthrates.

And there are plenty more. Imagine disruption is collectively represented by the blades of a planet Earth-shaped smoothie maker. It should become apparent that resilience is not a long-term survival mechanism because the whirring never ends. I am hoping that this will gain traction as the 21^st century version of the boiled frog parable!

In any case, increasing disruption turns what was once a finite game (clear rules, visible scoring mechanism, fixed boundary) into the so-called infinite game (no rules, no scoring mechanism, unbounded). Staying in the game is perhaps the only measure of playing well.

For business and society alike, what was once occasional acute stress punctuated by periods of calm has become a state of continuous acute stress. Organisations now face a reality that evolves faster than plans, structures, and assumptions can keep pace with.

In such conditions, organisations have little choice but to operate more like living systems, sensing, deciding, and adapting in real time. This is why adaptiveness trumps both agility and transformation. Agility is often little more than variations on an existing theme, doing the same things faster or more flexibly. Transformation assumes there is a definable ‘better future state’, yet that future is typically shaped by the conditions that existed when the programme began. In a world of constant disruption, by the time transformation arrives, reality may already have moved on.

Taleb introduce the meme-resistant term ‘antifragility’ to describe organisations that don’t just survive shocks but become stronger as a consequence. We strain ourselves in the gym to make our bodies stronger. The butterfly fights its way out of the chrysalis and in doing so activates the muscles that enable it to fly. Antifragility is a great concept with a poor marketing team. One could rename it super-resilience.

So how do you convert a finite game organisation into an infinite game player? In essence you cannot. There is a prevailing belief that AI will save the day. This would be like strapping a brain onto a sausage machine and hoping that it will now sense, decide and act in line with its environment.

Leaders of old school businesses really have three options:

1. Focus on getting to the end of the quarter and if results are poor then it will be your successor’s problem

2. Acknowledge the problem but take the view that your business is sufficiently ‘moated’ to withstand all forces. Risky. It may well last another century, but it may equally get taken out next week by a free app, a government policy decision or a change in customer sentiment.

3. Start building adaptive organisations to run in parallel to your current sausage machine. Ie. reduce your existential risk by not being totally reliant on one source of revenue.

So how do you build an adaptive organisation? Well that’s why this blog exists.

Let me know if your leadership team would value support in building a more viable, vital, and valuable organisation.