More Related Content Similar to Separating Rhinos from Swans - resilience might be the key (20) More from The BrainLink Group (20) Separating Rhinos from Swans - resilience might be the key1. Can we separate Grey Rhinos
from Black Swans?
(Resilience might be the key)
STRATEGY DEALS WITH THE FUTURE
Strategy seeks to prepare the organisation for the future — how to improve, how to win and how
to position the organisation in the future. But — particularly in the uncertain conditions we
currently experience — we cannot see the future as clearly as we would like.
The fundamental laws of physics are symmetrical in time. This holds true in both Newtonian
physics and the theory of General Relativity. So, in principle, we should be able to calculate both
the past and the future from the laws of physics.
Unfortunately, we also know that the “arrow of time” conforms to the thermodynamic concept of
entropy — ie: in a system that comprises many components, it is highly probable that the order
and structure in the system will break down as we move along the arrow.
In essence, this means that the nature of the future will change as we move closer to it. This
uncertainty is what “spoils” our attempts to predict and plan for the future. So, if we are unable to
predict the future while seeking to prepare the organisation for this future — what is the future of
strategy?
THE NATURE OF RESILIENCE
In conditions of uncertainty and continuous change, I argue that the role of strategy is to prepare
the organisation for the different conditions that might emerge in the future. A useful definition of
“resilience” is this ability to prepare an organisation to operate successfully across a range of
different conditions in the future.
© Norman Chorn 2020 • norman.chorn@brainlinkgroup.com • (61) 416 239 824 • Page 1
Dr Norman Chorn
Ref: NY Times
2. This definition differs somewhat from other popular versions which emphasise the ability to get up
once you are knocked over. While this may be desirable, a “knocked over” organisation is
generally accompanied by a significant loss of livelihoods, assets and intellectual property. This
traditional view of “creative destruction” is perhaps too costly both for communities and societies.
Taking this further, the role (and perhaps future) of strategy is to enhance the resilience of
organisations — to prepare them to thrive across a range of different future conditions.
THE STRATEGY OF RESILIENCE
Reflecting the approach from Wiesen and Chimal who seek to describe the process of governance
to best deal with COVID-19, I propose three elements to the role of strategy in the future:
❶ Explore alternative futures:
❷ Encourage elastic mindsets:
Key focus Initiatives
Alert and prepare
the organisation
for alternative
futures in an
uncertain
environment
• Develop scenarios of the future to understand the challenges posed by future
conditions
• Use the scenarios to better interpret ‘weak signals’ as a means of anticipating the
emerging future
• Conduct regular pre-mortems on major initiatives to limit unanticipated problems
• Understand that exponential change moves slowly in the beginning and then
speeds up dramatically
• Remember Amara’s law that suggests we overestimate the impact of technology in
the short term, and underestimate it in the long term.
Key focus Initiatives
Build a fluid
mindset that shifts
positions as new
evidence is
produced
Avoid fixation on a
particular way of
doing things or
recognised ‘best
practice’
• Be prepared to learn from mistakes and avoid blame
• Encourage a ‘learn as you go’ mentality — experiment to fail fast and learn
• Retain focus on the organisation’s purpose — rather than its traditional way of
doing things
• Leverage the ‘liminality’ — the gap between one mental model and the next. Once
the prevailing view has been discarded on the basis of new evidence, avoid the
rush to adopt a new model. Use the ‘gap’ between the mental models to explore
creative alternatives before settling on another approach
• Encourage cross-functional problem solving.
© Norman Chorn 2020 • norman.chorn@brainlinkgroup.com • (61) 416 239 824 • Page 2
Explore alternative futures Encourage elastic mindsets Use anti-fragile design
3. ❸ Use anti-fragile design:
SEPARATING GREY RHINOS FROM BLACK SWANS
‘Black Swan’ events are things we have not thought about as yet, and so cannot understand or
predict. These are the completely unpredictable events that cause havoc in our world.
‘Grey Rhinos’, on the other hand, are those events that are obvious and coming towards us, but
we are unable or unwilling to do anything about them. They will eventually trample us and cause
significant chaos if we continue to ignore them. Some examples are cyber security, mounting debt
levels and climate change.
Clearly, it is extremely difficult to prepare for a ‘Black Swan’ event — by definition, these are
unknowable. But ‘Grey Rhinos’ are all too obvious and we do know about them. We just seem to
lack the willingness to address them. [As Wucker suggests, a crash of rhinos (yes, a ‘crash’ is the
collective term for rhinos) often precedes a ‘Black Swan, and so it makes sense to jump on them
and address them directly].
The key message here is that the strategic focus on building resilience could help us to recognise
and deal with issues such as ‘Grey Rhinos’ — and enhance the way in which we prepare our
organisations for the future. The future role of strategy?
______________________________________________________________________________
Dr Norman Chorn is a strategist and organisation development practitioner with the
BrainLink Group. He uses principles of neuroscience to address the challenges of
developing strategy in a complex and uncertain environment. His particular areas of
focus are strategy in conditions of uncertainty; organisational and cultural alignment;
and strategic leadership.
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Key focus Initiatives
Design an
organisation to not
only withstand
unanticipated
shocks from the
environment — but
to actually benefit
from these through
increased
innovation and
adaptation
• Avoid excessive financial leverage through the use of debt — this will allow you to
take advantage of opportunities that present themselves in times of crisis
• Decentralise the structure of the organisation. This will not only allow people at the
coal face to learn and make appropriate decisions quickly — it will also create the
needed redundancies to deal with discontinuous shocks and unpredictable events
• Create multiple dependencies and causal opacity within the organisation — avoid
becoming overdependent on a single resource or asset
• Avoid incentive systems that can encourage people to do the wrong thing — ie
incentives that can benefit an individual, but harm the organisation as whole
• Ensure decision-makers have skin in the game — for both upside and downside
risks.
© Norman Chorn 2020 • norman.chorn@brainlinkgroup.com • (61) 416 239 824 • Page 3