More resilient businesses
When the pandemic hit in early 2020, it seemed like an era-defining shock — a Black Swan event.
Some even likened its impact to that of a world war. Three years on, our world has been exposed to an entire cascade of shocks. From the continued ripples of COVID-19, the war in Ukraine and the energy crisis to rampant inflation, we are surrounded by a whole bevy of Black Swans.
And as much as we would all like to return to less turbulent waters, it’s clear that volatility, uncertainty, complexity, and ambiguity (VUCA) are set to stay with us for some time yet.
For business leaders, this requires a change in mindset. In response to the pandemic, the focus shifted decisively away from running operations (cost-) efficiently to making them resilient and robust. Organisations now need to take their evolution one step further.
Not only do they need to be resilient in their response to Black Swan events, but they must also be able to pivot at an unprecedented rate to keep pace with technological, social, political and industry changes.
This is as much a threat as it is an opportunity. But to grasp the latter, we have to become what the author Nassim Nicholas Taleb has called ‘antifragile’ in his seminal book The Black Swan. Antifragility goes beyond the concepts of resilience and robustness: it’s not just recovering from disruption but becoming better because of it.
What does this mean for businesses?
Since the pandemic, organisations have not stopped re-evaluating, reorienting and transforming themselves to prepare for whatever might come next.
While there are many unknowns, one thing is certain: the need to respond to challenges and opportunities at lightning speed.
Now, more than ever before, this requires taking a holistic view of a business, rather than focusing on organisational silos. Supply chains, product development, talent management and technology do not stand alone, they are increasingly defined by their interconnectivity. Making changes in one area will inevitably affect the others. They must all align and work in unison so the organisation can flex as the macro and micro environments demand.
Technology is a case in point, not least because it lays the foundations for all the other areas.
Antifragility goes beyond the concepts of resilience and robustness: it’s not just recovering from disruption but becoming better because of it.
Technology and agility are key
It would be an understatement to say that the pandemic accelerated technology adoption and digitalisation that would have normally taken years if not decades to break through.
The technologies we’re talking about were not new by any stretch of the imagination. Cloud, automation, artificial intelligence (AI), machine learning (ML) and agile approaches had been around for some time. But for many businesses, there had been no pressure to roll them out rapidly. That pressure came when COVID-19 drove many workers to their home offices, bedrooms and kitchens— and operations could only be held up by enabling remote working.
While this transition was forced, the success of enabling technologies to keep businesses afloat set the future direction. Few would now question their benefits when it comes to meeting their business goals, even in the face of disruption.
What is more, with the pace of change and the high levels of uncertainty we face, there is a premium on adaptability — day to day, not just when we’re surrounded by Black Swans. An organisation’s ability to continue operating and, critically, innovating will depend on it. Only by harnessing current and future frontier technologies can we maintain the business resilience required to do so, not least because the market environment is becoming increasingly complex.
We may breathe a sigh of relief at having got on top of Cloud, AI and ML, but the next wave of frontier technologies is waiting in the wings.