Black Swans, Anti-Fragility and Organizations
Blog Post › Breakthrough Results
Is your organization anti-fragile or is it readying for a black swan visit?
Black Swan, you’ve heard it, a term made famous by the author Nassim Nicholas Taleb in his book of the same name. He explains a Black Swan event as…” an event with the following three attributes:
First, it is an outlier, as it lies outside the realm of regular expectations, because nothing in the past can convincingly point to its possibility. Second, it carries an extreme impact…. Third, in spite of its outlier status, human nature makes us concoct explanations for its occurrence after the fact, making it explainable and predictable.”
Volatility is inevitable. The world of business and work is dynamic, therefore inherently risky. This poses problems. We know that we are wired for survival hence, uncomfortable with volatility and risk, therefore we do whatever we can to decrease even small amounts of it.
One way people tend to avoid these small bouts of volatility is to step over areas of under performance. Avoiding small stressors may also look like stepping over behaviors that create an environment of unworkability in order to “keep the peace” and avoid potentially upsetting people. Eventually these unworkable practices become part of the culture.
All is well until one day something major happens an “outlier with an extreme impact”, a black swan event, and the clean-up is much more difficult. This breakdown can be with people or with results – depending on whatever was consistently stepped over.
Becoming robust, anti-fragile
A “fragile” organization is one in which the culture is ripe for a black swan event to severely impact it. What can you do to counter that? You can make it robust. Or, even better, anti-fragile, one that benefits from shocks.
Small frequent bouts of volatility are not bad or something to avoid – in fact the more frequent the better. They are to be embraced, used as examples and learned from in order to enhance performance and culture.
If you notice and deal with the frequent and inevitable bouts of volatility or unworkability head on with authentic conversations this serves to make an environment robust to fragility. Done successfully it may even become anti-fragile where it actually benefits from volatility. An example of anti-fragility could be when an economic downturn is felt and while all other companies suffer, your organization benefits. Due to its outstanding culture and practices it outshines all others in performance and/or in spirit making it more attractive than alternatives.
Creating a truly rock-solid learning organization will have you withstand the unpleasant vicissitudes of business and unexpected events powerfully when they arise.