Profiting from rising uncertainties

We value security and order, especially when it comes to managing companies, departments, and teams. It’s no coincidence that one of the most important degrees in business administration is called the «Master of Business Administration,» or «business administration.» And that’s how strategies have been developed up to now: the market is analyzed, our strengths and weaknesses are evaluated, past experiences are drawn upon, opportunities and risks are identified, and then the whole thing is translated into one or more plans.

When the future we planned doesn't come to pass …

Budgets are drawn up, and a secure future is assured. Now all that’s left is for this future to unfold as planned—at least roughly. And that’s exactly what’s becoming increasingly unlikely, both today and in the future. We don’t even need to bring up major, unexpected global upheavals like the pandemic or the war in Ukraine. Uncertainties will increase at every level and in every area of life. The future can be derived less and less from the past. That’s the Christmas goose problem: The goose is fed and well cared for all year round. If it concludes from this that things will always continue that way, it’ll be brutally disabused of that notion in early December. So, for example, it’s less and less your current strengths from the SWOT analysis that matter, but rather your willingness to build future strengths—even if they’re your weaknesses today.

The Three Options Available to a Manager

In principle, as a leader, you have three options for dealing with the new situation:

1. They carry on as usual, hoping that things won't turn out that badly for them. I still come across this attitude surprisingly often.
2. You’ll prepare for future crises and make your company or department more resilient to external influences.
3. You create a setup that allows you to profit from a volatile world. In other words, the more uncertain the environment becomes, the more successful you’ll be.

The philosopher and bestselling author Nassim Taleb refers to this last point as “antifragility.” The opposite of fragile is not unbreakable, but rather “anti-breakable” (or antifragile). Antifragile structures benefit from uncertainties and setbacks, rather than simply enduring them, as robust or unbreakable structures do. A vivid example of this is the Hydra from Greek mythology: If you cut off one of its heads, two new ones grow back. Thus, it does not become weaker from setbacks, but stronger. There are numerous examples of this in real life, such as the evolution of life, the global economy, or companies that have achieved outstanding long-term success.

Five Areas of Action

So how do you transform your company or department into an antifragile one that benefits from future uncertainties rather than merely enduring them? Here are five key areas of action:

1. Strengthening a Shared Identity: The first area of action is well known: To achieve sustainable success in uncertain times, you need a clear identity based on a clear mission and vision. This means your company is united by a shared understanding and commitment to why it exists (mission), what ambitious goals it aims to achieve (vision), and the self-image that guides the thinking and behavior of every member of the organization (identity). Only on this foundation can all participants truly act in unison.
2. Training Leaders’ Ways of Thinking and Behaving: The most important element of antifragility is the way leaders think and behave. For many, this means a massive shift away from the established rules of the game. Here are a few examples of how leaders need to change:
   • Change is good. The question is no longer «What do we need to change?» but «What can we change?» We need ongoing change in our organization and processes to increase our flexibility and strength. It’s just like building muscle at the gym. With better physical fitness, you’ll be better equipped to handle future challenges—even if you don’t know what they are yet.
   • There are always options, no matter how difficult the situation may be. Even experienced leaders can develop tunnel vision when things get tough: it seems as though there’s only one way forward. But that’s never the case. There are always options. It takes practice to think that way.
   • Stretch goals are positive. For most people, goals must
   «Be »realistic.« That’s a fragile way of thinking. Because it leaves no room for the unexpected.» For training and antifragility, on the other hand, it’s important to frequently set goals that are almost impossible to achieve. This “stretching” builds the necessary mindset and action muscles to achieve significantly more—even when it’s essential for survival.
3. Develop Scenarios Instead of Plans: As explained above, in this new world, the plans you develop are usually rendered obsolete by reality if they extend more than a year into the future (sometimes even after just a few weeks). So spend less time on detailed planning (which lulls people into a false sense of security and thereby makes them vulnerable), and instead focus on developing scenarios for different changes in the assumptions underlying your plans. This not only ensures you’re actually better prepared, but—more importantly—it trains you to think in terms of options. For example, you could ask: «How can we get closer to our vision through other means if, as an assumption, option x or y is no longer available in the future? What would we need to do then?»
4. Establishing Empowerment: The more freedom your people have to think, act, and make decisions independently, the more antifragile your organization will become. A key prerequisite for full empowerment is a strong shared identity (see point 1). You also need a strong sense of responsibility among all members of the company.
5. Fostering Personal Growth: Another important area of focus is the «drive» of everyone in the company to continuously develop themselves. Yesterday’s knowledge won’t be enough tomorrow. This type of training is especially helpful when unpleasant surprises arise from outside the company. That’s because your people will then be accustomed to rising to the challenge.

Conclusion

If you work systematically on these topics, you will increasingly benefit from uncertainty in the future, while others will crumble under it (fragile companies) or struggle to survive (robust companies). As an antifragile company or team, however, you can continue to build on your success even in difficult times.

Author

Volkmar Völzke is a success maximizer, book author, consultant, coach, speaker.
> www.volkmarvoelzke.ch