How Your Organization Can Survive—and Thrive—in the Era of Black Swans

03.13.15

by Greg Heist, Chief Innovation Officer, Gongos, Inc.

ltz-quote“History does not crawl. It jumps.”  –  Nassim Nicholas Taleb

About eight years ago, I had a profound professional awakening.  In a moment of clarity, I realized that the world was changing far more rapidly than I had ever imagined. I recognized that the traditionally staid world of market research would be turned upside down by a series of cultural and technological currents that would permanently change the landscape and future of an industry.  In short, I realized that if the industry—and my organization—was going to survive, we needed to embrace disruptive currents and become far more comfortable with innovation and change.

The ideas of Nassim Taleb (who wrote the books Antifragile and The Black Swan: The Impact of the Highly Improbable) provide a rigorous and eloquent way of understanding the nature of profound, sudden change.  In his work, he argues that our increasingly frenetic and interconnected world creates a fertile ground for highly improbable “black swans” to occur with greater frequency and devastating impact.

More recently, I had the privilege of engaging with the Quinlan School of Business at Loyola University on the subject of building company resilience through innovation. Based on the pioneering work of its Center for Risk Management, their Executive Dialogue Series explores the idea of building company resilience in the face of disruption.  Discussing this subject with other senior executives and academics re-energized my passion for the importance of leveraging innovation to build organizations that can survive—and thrive—in the Era of Black Swans.

To that end, I’d like to share some thoughts on how to apply the cutting-edge thinking coming out of the Quinlan School to our industry and the challenges we face.

1. Strengthen your capacity to adapt

Both humans and organizations tend to enjoy comfortable stability. Stability allows us to feel a sense of predictability about what our work is and how it needs to be done. It creates fabulous opportunities to create greater efficiency.  However, the more organizations become enraptured with the lure of the familiar, the more they move down the dark path of rigidity.  In the world of market insights, we see this manifest itself callout_quotewith our preoccupation with perfecting our manufacturing-oriented workflow and investing heavily in ways of making it ever more efficient.

Unfortunately, our fixation on delivering in the here and now embeds a resistance to change and adapting to the needs of the emerging future.  There’s really only one way beyond Christensen’s “Innovator’s Dilemma”: to take the plunge and actively champion change and innovation within your organization. Play the role of the contrarian Tenth Man on your leadership team. Try starting from the premise that something is wrong rather than “everything is great!”  Actively call out group think when you see it. If you do this, you’ll help stretch your organization’s vision and help it be ready to adopt when the going gets tough.

2. Embrace agility as a core competency

If the capacity to adapt is about fine-tuning our antennae to the world around us, agility relates to our ability to nimbly respond to what those antennae are sensing.

Not surprisingly, organizations that have become tone deaf to the outer world also tend to be shackled with an inability to nimbly respond to it. From this perspective, we can learn a lot from the world of tech startups and their agile development mindset. The clockspeed and complexity of modern business makes inculcating an agile mindset into the way traditional organizations think about new products and services an imperative. Such an undertaking is a challenge, which is why we tend to see larger players trying to buy innovative ideas rather than undertaking the fundamental internal transformation required for them to organically innovate from within.

Building the competency of agility creates an organization that isn’t obsessed with putting out one, huge, ground-breaking “perfect product”. Instead, it becomes obsessed with creating a small, viable offering that becomes a low-risk “trial balloon” that can be rapidly iterated based on feedback from customers.  They focus on being great listeners who can pivot at a moment’s notice.  They do this over and over, putting out a large number of small experiments, quickly killing the losers and rapidly commercializing the few with significant promise.  Finally, they maintain a long-term vision but are open to allowing short-term experience to shape how that vision ultimately comes to life.

While this isn’t a competency that can be built overnight, it’s only the organizations with the will to begin the journey that ultimately will have the ability to embed that resiliency within their organizations.

3. Foster trust…internally and externally

One of my favorite business axioms is, “There are two types of companies: those with problems and those that will have problems.”  It’s a fact of life that organizations will experience periods of turbulence. Projects will go badly. Contracts will be terminated. Client budgets will experience Draconian cuts. Competitors will pilfer business. Now, more than ever, there is no certainty.

When these crises hit, the degree of trust we’ve built with our clients and within our organization will strongly influence the severity of disruption.

Case in point: when celebrity iCloud accounts were hacked and compromising photos surfaced, Apple CEO Tim Cook’s statement about Apple’s commitment to personal privacy was a pivotal moment. Cook changed the public conversation from finger pointing to demonstrating why customers’ trust in Apple is justified. He went to great lengths to outline that Apple’s commitment to privacy spans its hardware, software and online services. His words “At Apple, your trust means everything to us” would have had a hollow ring to them had Apple not already built considerable goodwill among its users.

Here are two questions worth asking if faced with a similar crisis:
          – Have you built up enough trust among your clients to survive?
          – Would your employees rally behind your company or would they begin circulating their resumes?

4. Articulate a coherent and relevant future vision

JFK_quote

In 1961, President John F. Kennedy set before Americans a compelling vision: that by the end of the 1960’s, America would be the first country to land on the Moon. So inspiring was his assertion that it both engaged the imagination of the American public and brought crystal-clear focus to the scientific efforts of a nation. Without question, it became an historic moment that shaped the course of human history.

This is a powerful example of the importance of articulating a compelling and relevant vision for people to embrace and embody as they go about their work. Vision has the capacity to be a North Star in the eye of a storm.  Capturing the hearts of your organization inspires them to freely use their talents to make that vision a vivid reality. It becomes the way of quickly course-correcting when tactical challenges force tough choices.

And, it’s not easy. But for resilient organizations it’s a critical element of their success. It’s pretty obvious an organization that lacks a compelling long-term vision is also going to struggle with remaining resilient and viable in the face of the complexity, uncertainty and ambiguity of modern business.

Take a look at your organization’s vision: Is it compelling enough to create a unique identity in the minds of clients? Does it capture the minds and hearts of your organization?  As Taleb states in his book, “Ideas come and go. Stories stay.”  Lead your organization to embrace the innovation and change necessary for your company’s story to become an enduring and heroic legacy.

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