The covid crisis could help us create shock-proof companiesJaspreet Bindra
As the COVID epidemic rages across the world, finding a vaccine for it has become the Holy Grail. Vaccines are curious things; they actually do not directly cure a disease. A virus in a weakened state or proteins or toxins from it are introduced to our body, and it learns to create antibodies to destroy it, so that next time even if it strikes back in full strength, we can identify it and generate those same antibodies to destroy it. Thus, a vaccine trains the body to destroy the virus, rather than destroying it itself.
COVID has been a classical Black Swan event, both unpredictable and causing devastating impact. Besides the thousands of lives lost and societies dislocated, it has disrupted companies and the people that work there. Many companies have reacted admirably and rapidly, ensuring business continuity by making employees work from home, securing supply chains the best they can and somehow keeping manufacturing running through skeleton crews. In spite of this, experts anticipate job losses, value destruction and severe economic hardship as the economy slides into a global recession.
The fact is that COVID is not the first and last of such disruptive Black Swan events, there have been six of them in the last 70 years, and there will be more. Such disruptions can be technological (the Internet), geopolitical (a US-China war?), Biological (the virus) or Ecological (Global Warming). In fact, the catastrophic events caused by global warming, I believe, will be a bigger disruption to life and business than COVID. I also believe we have a choice: to go back to life and business as usual after the current crisis is over, or to learn from it and prepare ourselves and our companies for the Next Big One. We will be well-served if we consider the COVID event as akin to a vaccine - to build the antibodies and immunize our self against the much bigger calamities that perhaps await us.
Nassim Taleb, the celebrated writer of ‘Black Swan: The Impact of the Highly Improbable’, talks of something similar – how to make your company Antifragile. Antifragile companies, as opposed to fragile which break and robust which resist, actually grow stronger in the face of random, disruptive events. Antifragile systems are usually distributed, ecosystem-like, decentralised and bottoms-up, tolerate small frequent mistakes, and build in redundancies and inefficiencies in the system.
Consider what companies are doing in the face of the crisis. We are rapidly distributing work as millions of employees work from home and are decentralizing decision-making to make this work. We are using technology like Zoom, Slack, Microsoft Teams, etc. extensively, to make collaboration happen, and therefore creating a distributed ecosystem, rather than centralized office work and decision making. We are tolerating small mistakes and large inefficiencies as long as they allow for business continuity and the larger goal to happen. The gig-economy, after overcoming its initial hurdles, is gearing up to keep our life and companies running. The gig-economy is distributed, bottoms up and not necessarily the most efficient, but it is more antifragile.
If we can learn some of these lessons as this crisis gets over, we have a great chance to inoculate our businesses against future shocks. As an example, we can move to perhaps three days of work-from-office and two days WFH; we will have our entire work force trained on WFH, save costs of office space, and keep the roads clearer and the air cleaner. Keeping decision-making decentralised and building a distributed ecosystem of experts and knowledge-providers, rather than every piece of knowledge being centralized within our company will be another vaccine. Investing in automation and collaboration technologies in good times, will make us antifragile in the bad ones. This will not make our companies totally resistant to shocks, but make them less impacted, and able to recover much quicker from the blow, and get going
Author and thinker Peter Hinssen tells us that it is not going to be Normal, or even the New Normal, we are entering the age of the Never Normal. The age of the Unicorn is perhaps passé’, he says, we now need Phoenixes – the creatures who can rise from the dead. We need to be prepared, not just lucky. As Roald Amundsen said, “Victory awaits him who has everything in order — luck, people call it. Defeat is certain for him who has neglected to take the necessary precautions in time; this is called bad luck.”
To make our own luck, we need to look at this crisis therefore as a vaccine, and build the Immune Company.
(This column was published in Tech Whispers in Mint on April 3, 2020)