06.09.2015 Professor Tony Bendell TOCICO Conference Keynote Slides

2015 TOCICO International Conference
©
2015
TOCICO.
All
Rights
Reserved.

How To Transform Your Organization
To Be Anti-Fragile: Why Managing
Constraints is Not Enough
Tony
Bendell,
Services
Limited
and

The
An>-‐Fragility
Academy

http://www.theanti-fragilityacademy.com/
http://servicesltd.co.uk/
tony@servicesltd.co.uk
tony@theanti-fragilityacademy.co.uk

©
2015
TOCICO.
All
Rights
Reserved.

•  Organisa>onal
failures
are
now
commonplace,
including
those
of
iconic

ﬁrms

•  Conven>onal
management
and
management
systems
have
proved

inadequate
to
protect
both
private
and
public
sector
organisa>ons
from

catastrophic
incidents,
adverse
publicity
and
failure

•  Fragility
associated
with:

Ø  Vola>le
Environment

Ø  Weaknesses
in
Systems
&
Processes

Ø  Weaknesses
in
Behaviours
&
Management

Ø  Rush
to
Eﬃciency

Organisational Failures – The Failure of
Management & Management Systems

©
2015
TOCICO.
All
Rights
Reserved.


©
2015
TOCICO.
All
Rights
Reserved.

The Problem of Risk Management
•  Numerous
repeated
and
well
publicised
failures
of
Risk
Analysis
and

Management

–  Inherent
Flaw
in
the
Approach:

Much
of
Risk
Analysis
and
Management
as
we

know
it
today
is
part
of
the
problem,
not
of
the
solu;on

•  Reac.ve
Approach
–
Uncertainty
&
Risks
will
occur;
we
need
to
predict
&

reduce/contain
it.

–  We
have
to
be
able
to
conceive
the
risk.

•  Ignores
aspects
of
the
internal
and
external
condi>ons
in
the
system,
including

its
complexity
and
loading,
&
assumes
stability.

•  Assumes
full
.mely
informa.on,
cri.cal

awareness
&
senior
management

a?en.on

•  Assumes
no
“Black
Swans”


©
2015
TOCICO.
All
Rights
Reserved.

Enterprise Risk Management
–  A
New
Business
School
Discipline

–  Great
Poten>al,
But…

–  In
its
infancy

–  Not
Being
Used,
Not
Being
Used
Well

–  Educa>on
&
Governance
Issues

–  Risk
silos


©
2015
TOCICO.
All
Rights
Reserved.

The Desire for Robust Systems
Ø  Whilst
they
exist
to
protect
people,
organisa>ons
and
communi>es,

human
systems
are
naturally
fragile.

Ø They
fail
individual
people
&
stakeholders,
and
some>mes
they
fail

systema>cally
&
some>mes
drama>cally.

Ø Weaknesses
are
caused
by
people,
by
processes
and
by
environment

excess.

Ø We
try
to
make
such
systems
robust,
but
how
can
we
establish
that

they
are
robust
enough
since
a
robust
system
just
waits
for
something

more
powerful
than
it
to
overcome
it?
Like
the
Thames
Barrier
the

robust
is
always
wai>ng
for
a
wave
that
is
bigger
than
it,
that
will

destroy
it.

Ø Robustness
may
imply
Rigidity


©
2015
TOCICO.
All
Rights
Reserved.

The Problems with Robustness

©
2015
TOCICO.
All
Rights
Reserved.


©
2015
TOCICO.
All
Rights
Reserved.

There
is
no
prac.cal
level
of

robustness
that
is

`Strong
enough`


©
2015
TOCICO.
All
Rights
Reserved.

Robust
systems

don’t
themselves

get
be?er

There
is
no
prac.cal
level
of

robustness
that
is

`Strong
enough`


©
2015
TOCICO.
All
Rights
Reserved.

Forensic Accounting, Fraud &
Mismanagement
•  Forensic
Accoun>ng
is
a
Safeguard,
But..

•  Can
be
a
bit
late..

•  The
Whole
Governance
Issue

–  Shortcomings
of
Current
Prac>ce

–  Arguable;
Diﬀerent
Perspec>ves
on
Risk
&
‘Skin
in
the
Game’

–  Board
Responsibility,
Understanding,
Educa>on,
Knowledge
&

Access
to
Informa>on

•  The
Tip
of
the
Iceberg?


©
2015
TOCICO.
All
Rights
Reserved.

Where Fragility Exists
•  At
all
Levels/Layers…

–  Strategy
&
Governance

–  Opera>ons,
Processes
&
Supply
Chain

–  People
&
Culture

–  Informa>on
&
Technology

–  Markets,
Products
&
Services

•  Global
&
Local
Fragility/Macro
&
Micro


©
2015
TOCICO.
All
Rights
Reserved.

Anti-Fragility (Nassim Taleb)
•  Fragile
refers
to
systems
and
organisa>ons
that
can
be

easily
damaged
by
changes
or
shocks
in
the
external
or

internal
environment.

•  Robust
refers
to
systems
and
organisa>ons
that
are
able
to

withstand
such
adverse
condi>ons.

•  An0-‐Fragile
refers
to
systems
and
organisa>ons
that,
like

biological
systems,
are
more
than
just
robust
and
within
limits

actually
improve
their
resilience
through
being
stressed.


©
2015
TOCICO.
All
Rights
Reserved.

Nature Got There First

•  Natural
systems
are
An>-‐Fragile

•  Un>l
now,
we
have
only
focused

on

making
human
systems
Robust.

•  But
now
we
know
be?er!


©
2015
TOCICO.
All
Rights
Reserved.

Some Sources of Anti-Fragility
•  Learning

•  Awareness
of
environment
&
internal
condi>ons

•  Informa>on
systems

•  The
ability
to
take
decisions
&
act

•  Flexibility
&
Agility

•  Good
decision
making

•  Shared
&
spread
risk

•  An>-‐Fragility
(or
not)
is
deﬁned
by
the
Organisa.onal
Strategy,

Structure
and
Systems,
its
People,
Rela.onships
and
its
Culture.

We
can
then
Build
An>-‐Fragility
(or
not)
into
our
products
&

services,
use
of
informa>on
and
technology
base.


©
2015
TOCICO.
All
Rights
Reserved.

•  Safeguarding
Systems

–  All
organisa>onal
and
system
informa>on
gathering
and
feedback
loops,

that
poten>ally
use
current
performance
as
the
basis
for
control
and/or

change,
represent
An.-‐Fragility
Features.

•  Strategy
Review;
Risk
Management;
Budgetary
Control;
Internal
&
External

Audit;
Quality
Control;
Quality
Assurance;
Developmental
and
Evalua>ve

Performance
Appraisals;
HSE
Assurance;
Con>nuous
Improvement,
Kaizan,
Six

Sigma,
Lean
Improvement,
Agile
Deployment,
&
Organisa>onal
Assessment

against
the
EFQM
or
Baldrige
Excellence
Models.

An.-‐Fragility
Features
of
Organisa.ons
and

Systems


©
2015
TOCICO.
All
Rights
Reserved.

•  A
key
part
of
the
An>-‐Fragile
mechanism
in
all
these
cases
is
the
human

role.

•  Risk
Management
is
an
An.-‐Fragility
Feature
of
our
organisa>ons
and

systems.
But,
this
An>-‐Fragility
Feature,
is
itself
oKen
implemented
in
a

Fragile
way.
(Second
Level
Fragility)

•  Lack
of
a
holis;c
approach
to
Fragility
Minimisa0on
and
Management
in

current
prac;ce
in
organisa;onal
or
system
design
and
opera;on.

Anti-Fragility Features of
Organisations and Systems

©
2015
TOCICO.
All
Rights
Reserved.

But the limitations are in how these
Safeguarding Systems are implemented
–  Oken
designed
for
Robustness,
not
An>-‐Fragility

–  Incomplete
informa>on
ﬂow

–  Assume
some
stability
&
no
“Black
Swans”

–  OKen
delegated
to
middle
management,
formalised
and
standardised,
so
in
danger
of

becoming

compliance-‐driven
rituals,
with
incomplete
informa>on;
with
most
importance
being

given
to
the
integrity
of
the
paper
trail
for
audi>ng
purposes,
&
inadequate
senior

management
amen>on.


©
2015
TOCICO.
All
Rights
Reserved.

A Basic Fragility Test for Your Organisation
(Score out of 100; (0-10 :10=maximum optimisation)
•  How
good
is
our
current
Approach?
(0-‐10)

•  Do
we
include
deliberate
Diversity
of
Approach
and
Deployment?
(0-‐10)

•  How
Aware
are
we
of
our
Environment?
(0-‐10)

•  Do
we
Learn?
(0-‐10)

•  Do
we
Implement
what
we
Learn?
(0-‐10)

•  Do
we
Learn
fast?
(0-‐10)

•  Do
we
have
the
Infrastructure
to
Learn?
(0-‐10)

•  Do
we
Evolve?
(0-‐10)

•  Do
we
have
the
Infrastructure
to
Evolve?
(0-‐10)

•  How
Op>mised
are
Our
Processes?
(0=highly
op>mised)


©
2015
TOCICO.
All
Rights
Reserved.

Ten Ways An Organisation Can Become More
Anti-Fragile
1.  Don’t
think
you
are
there;
Realise
that
Never
Completely
get
there/never
completely
not

there.

2.  Be
aware,
scan
the
external
&
internal
environment,
risks,
scenarios
&
possible
black
swans.

3.  Be
joined
up
&
nimble,
keep
learning,
apply.

4.  Avoid
rigidity,
ultra
eﬃciency
&
relying
on
robustness.

5.  Don’t
automate,
engage.

6.  Reduce
the
fragility
of
an>-‐fragile
systems.

7.  Use
diversity.

8.  Apply
precau>onary
principles.

9.  Fail
oken
&
small.

10.  Stress
test.


©
2015
TOCICO.
All
Rights
Reserved.

Where Can We Start?
•  How
ideal
is
your
world?

•  The
Board.

•  Execu>ve
management.

•  Opera>ons
management.

•  Supply
chain.

•  Front
line.

•  Risk

•  The
Quality
Department-‐
organisa>onal
quality/TQM/excellence


©
2015
TOCICO.
All
Rights
Reserved.

Anti-Fragility as an Holistic Theory
of the Firm
•  No
single
current
Business
School
Discipline
unifies
our

view
of
the
Organisa.on

•  Also
tells
us
that
a
naive
focus
on
Op.mising
Efficiency,
or

even
Effec.veness,
is
Wrong

•  Unifies
and
provides
both
structure
around,
and

safeguards
in
applying,
change,
improvement
&
quality

approaches
such
as
Lean,
Six
Sigma,
EFQM
Excellence

Model,
Benchmarking,
QA
etc.


©
2015
TOCICO.
All
Rights
Reserved.

©
The
An>-‐Fragility
Academy
24

Efficiency
Fragility
Robustness
An.-‐Fragility

Process
Throughput
rate,

OEE

No.
Of
breakdowns,

lost
>me

Up>me
Rate
of
decline
in
no.
of

breakdowns
&
lost
>me

People
U>lisa>on,
output

per
head

Absenteeism,
turnover
Amendance,

reten>on

Rate
of
decline
in

absenteeism,
turnover

Technology
U>lisa>on,

Output

Failure
rate,
non

availability

Availability
Rate
of
decline
in
Failure
rate

&
non
availability

Informa>on
Timely,
reliable,

accurate.

Delay,
inaccuracy.
Timely,
reliable,

accurate.

Rate
of
decline
in
Delay,
&

inaccuracy.

Supply
Chain
Throughput
rate,

OEE.

No.
of
breakdowns
in

supply,
unsa>sfied

demand.

Con>nua>on
of

supply.

Rate
of
decline
in
number
of

breakdowns
in
supply,
&

unsa>sfied
demand.


©
2015
TOCICO.
All
Rights
Reserved.

Stress or Time in Denominator of Rate
of Decline?
•  Using
>me
enables
us
to
establish
easy
to
measure
metrics,

which
can
be
used
to
monitor
the
an>-‐fragility
of
the

organisa>on

•  Like
“nega>ve
velocity”

•  Stress
may
also
be
useful
in
speciﬁc
“red
ﬂag”
condi>ons.


©
2015
TOCICO.
All
Rights
Reserved.

Anti-Fragility & the Theory Of Constraints
•  TOC
op>mises
system
throughput

•  Op>mised
throughput…

…

stresses
the
system

&
may
cause
fragility

•  Opportunity
to
extend
the

TOC
Model
to
incorporate
An>-‐Fragility

©
2015
TOCICO.
All
Rights
Reserved.

Tony
Bendell,
Services
Limited
and
The
An>-‐Fragility
Academy
England

Èvery
day
organisa>ons
fail,
unnecessarily,
with
massive
financial
and
human
cost.
We
need
to
change.

An>-‐Fragility
is
the
most
important
poten>al
breakthrough
in
business
thinking
in
my
career.
It

provides
a
language
and
unifica>on
for
all
of
the

improvement
and
produc>vity
methodologies

I
have
been
assis>ng
companies
with
for
over
20
years.
It
makes
us
realise
that
our
current
op>misa>on

criteria
are
wrong
and
efficiency,
and
even
effec>veness,
are
not
such
a
good
idea.
It
unifies
our
business

model,
giving
a
new
coherence
to
the
disjoint
func>onal
specialisms
in
our
business
schools.

Go
out
and
tell
people,
they
need
to
know
what
you
know
..
and
soon.`


©
2015
TOCICO.
All
Rights
Reserved.

Tony
Bendell,
Services
Limited
and
The

An>-‐Fragility
Academy
England

Book
may
be
ordered
at:

www.gowerpublishing.com/isbn/9781472413888

35%
discount
code
G13iCO35

Or
for
signed
or
dedicated
copies
go
to:

hmp://www.thean>-‐fragilityacademy.com/#!book/c1enr


06.09.2015 Professor Tony Bendell TOCICO Conference Keynote Slides

Recommended

Recommended

More Related Content

Viewers also liked

Viewers also liked (17)

Similar to 06.09.2015 Professor Tony Bendell TOCICO Conference Keynote Slides

Similar to 06.09.2015 Professor Tony Bendell TOCICO Conference Keynote Slides (20)

Recently uploaded

Recently uploaded (20)

06.09.2015 Professor Tony Bendell TOCICO Conference Keynote Slides