Business Antifragility: The New abNormal
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My closing keynote at SAFe Days conference, 5-Aug-20
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Business Antifragility: The New abNormal
- 1. Business Antifragility: The New abNormal Tathagat Varma Technology Strategy & Business Operations, Walmart Labs Doctoral Candidate (EFPM), Indian School of Business
- 2. Disclaimer These are my personal views!
- 3. Business Agility From https://www.agilebusiness.org/page/WhatisBusinessAgility QUICKLY ADAPT TO MARKET CHANGES RESPOND FLEXIBLY TO CUSTOMERS MAINTAIN COST- EFFECTIVE QUALITY SUSTAIN COMPETITIVE ADVANTAGE
- 5. Predictive Indicators The most exciting result was the discovery of three key predictors of business agility in both the 2018 and 2019 studies: • Funding Models • Value Streams • Relentless Improvement From https://businessagility.institute/learn/2019-business-agility-report-raising-the-bar/
- 6. Business Agility: Scorecard From https://businessagility.institute/learn/2019-business-agility-report-raising-the-bar/
- 7. Covid-19 Pandemic continues unabated… https://covid19.who.int/
- 8. Well-Established Brands… • Cirque du Soleil • Exide Technologies • Gold’s Gym • Hertz • Intelsat • JC Penney • Technicolor • Virgin Australia • Wirecard • … https://www.forbes.com/sites/hanktucker/2020/05/03/coronavirus-bankruptcy-tracker-these-major-companies-are-failing-amid-the-shutdown/#3bae00f33425
- 9. New-Age Companies… https://www.ft.com/content/7938752a-52a7-11ea-90ad-25e377c0ee1f SoftBank CEO Masayoshi Son at a press conference in November 2019, announcing a Y704bn loss for the July- September period. Son had to write down his company’s investment in WeWork by $4.6bn © Getty
- 12. But, some bright spots as well…! DoorDash, GrubHub, UberEats, Walmart, Target, Amazon, Netflix, WhiteHat Jr, Vedantu, 1mg, Hula Global, Shree Shakti Enterprises, Bioline India, Regeneron Pharmaceuticals, Citrix Systems, NortonLifeLock, Gilead Sciences, Nvidia, DocuSign, Dominos Pizza, Etsy, Everbridge, Microsoft, Newmont, PayPal, ServiceNow, Shopify, Slack, Virtu, Wayfair, Wingstop, Zoom,
- 13. A full recovery might be many years… https://www.mckinsey.com/featured-insights/coronavirus-leading-through-the-crisis/charting-the-path-to-the-next- normal/restaurants-with-contactless-service-could-be-better-prepared-to-get-sales-back-to-precrisis-levels
- 14. Critical questions… IS BEING AGILE ENOUGH? IS BUSINESS AGILITY ENOUGH? IS IT MAKING BUSINESSES FRAGILE?
- 15. Welcome to The New abNormal! • Hardly “new” – Dotcom, 9/11, SARS, Hurricane Katrina, 2008, Hurricane Sandy, Greek Debt Crisis, GST, Demonetization, etc… • Old Normal = Business As Usual (BAU) • New abNormal = Turbulence As Usual (TAU) • Agility is table stakes! • We need Antifragility…
- 17. Black Swan Event • An Outlier, Prospectively Unpredictable • High Consequences / Impact • Retrospectively Predictable / Explainable
- 20. Antifragility • “Some things benefit from shocks; they thrive and grow when exposed to volatility, randomness, disorder, and stressors and love adventure, risk, and uncertainty. Yet, in spite of the ubiquity of the phenomenon, there is no word for the exact opposite of fragile. Let us call it antifragile. • Antifragility is beyond resilience or robustness. The resilient resists shocks and stays the same; the antifragile gets better. • Antifragility determines the boundary between what is living and organic (or complex), say, the human body, and what is inert, say, a physical object like the stapler on your desk.” From: Antifragile: Things That Gain from Disorder – Nassim Nicholas Taleb,
- 25. Exploit a crisis! “We have never shuttered the industry on this scale before,” said Alexandre de Juniac, director general and CEO of the International Air Transport Association (IATA), during an April briefing. “Consequently, we have no experience in starting it up.” There’s no single past event that provides a roadmap for recovery from this pandemic. But a combined understanding of lessons learned after 9/11, SARS and other shock events will help chart a way forward. Pic: https://apex.aero/2020/06/10/aftershocks-coronavirus-impact
- 27. Digital Business Models B2C Digital Business Model: 4C-Net B2B Digital Business Models: 4S-Net From: Digital Business Models – Bernd W. Wirtz, 2019 Digital business models refer to leveraging digital technologies to either transform or create new businesses, go-to-market approaches, and/or product and service combinations. This often results in a redefinition or reordering of the value chain and/or approach to the customer, thus altering or offering a new customer value proposition or new monetization path. - Glassmeyer/McNamee Center for Digital Strategies Tuck School of Business at Dartmouth College
- 28. Embrace Uncertainty WORK ON “NEW” AREAS ACCEPT “RISKY” PROJECTS PROACTIVELY SEEK “PROBLEMS”
- 29. Build Redundancies MAKE TIME PURSUE SIDE PROJECTS EXPAND YOUR NETWORK
- 30. Develop Options ACQUIRE NEW CAPABILITIES PRACTICE VIA NEGATIVA PURSUE “BARBELL” STRATEGY
- 31. Practice Via Negativa Eliminate Noise Kick out the Ladder Constantly Improvise
- 32. Barbell Strategy • Play safe in some areas (robust to negative Black Swans) • Take a lot of risks in others (Open to Positive Black Swans)
- 33. Red Teaming • Red teams are established by an enterprise to challenge aspects of that very enterprise’s plans, programs, assumptions, etc. It is this aspect of deliberate challenge that distinguishes red teaming from other management tools. – US Department of Defense. • Red Teaming is the art of applying independent structured critical thinking and culturally sensitised alternative thinking from a variety of perspectives, to challenge assumptions and fully explore alternative outcomes, in order to reduce risks and increase opportunities.
- 36. “Safe to Fail” approach Safe-fail Probes are small- scale experiments that approach issues from different angles, in small and safe-to-fail ways, the intent of which is to approach issues in small, contained ways to allow emergent possibilities to become more visible. The emphasis, then, is not on ensuring success or avoiding failure, but in allowing ideas that are not useful to fail in small, contained and tolerable ways. https://www.cognitive-edge.com/methods/safe-to-fail-probes/
- 37. Ship often! Repeated successes could lead to failure, but repeated failures could improve the odds of success!
- 38. Introduce “Shocks” • “This was our philosophy when we built Chaos Monkey, a tool that randomly disables our production instances to make sure we can survive this common type of failure without any customer impact. The name comes from the idea of unleashing a wild monkey with a weapon in your data center (or cloud region) to randomly shoot down instances and chew through cables — all the while we continue serving our customers without interruption.” • Latency Monkey, Comformity Monkey, Doctor Monkey, Janitor Monkey, Security Monkey, 10-18 Monkey, Chaos Guerilla, … https://netflixtechblog.com/the-netflix-simian-army-16e57fbab116
- 40. Model of an Antifragile GCOE https://www.linkedin.com/feed/update/urn:li:activity:6696300821157572608/
- 41. Embrace The Complexity Mindset! From: It’s Not Complicated: The Art and Science of Complexity in Business – Rick Nason A complexity mindset accepts that complexity exists and needs to be dealt with differently. A complexity mindset is a creative mindset. It focuses on what can be, rather than what is. A complexity mindset embraces that complexity is not going to go away. A complexity mindset recognizes that complexity creates both challenges and opportunities.
- 43. References • Make Your Organization Anti-Fragile – Brad Power, Jun 24, 2013, https://hbr.org/2013/06/make- your-organization-anti-fr.html • The Disney Recipe – Todd Zenger, May 28, 2013, https://hbr.org/2013/05/what-makes-a-good- corporate-st • How Businesses Have Successfully Pivoted During the Pandemic – Mauro F. Guillén, HBR, Jul 07, 2020, https://hbr.org/2020/07/how-businesses-have-successfully-pivoted-during-the-pandemic • Beyond covid-19 lies a new normal—and new opportunities – EY, Jun 30, 2020, https://www.technologyreview.com/2020/06/30/1004575/beyond-covid-19-lies-a-new-normal-and- new-opportunities/ • The “New Normal” Is a Myth. The Future Won’t Be Normal at All – Hernan Saenz, Nate Anderson, Dianne Ledingham and Michelle Supko, Jun 05, 2020, https://www.bain.com/insights/the-new- normal-is-a-myth-the-future-wont-be-normal-at-all/ • HOW TO BUILD AN ANTIFRAGILE BUSINESS THAT GAINS FROM DISORDER - https://tommorkes.com/how-to-build-an-antifragile-business-that-gains-from-disorder-uncertainty- and-failure/