Thank you for joining the discussion with our second article on the book “Antifragility” by Nassim Nicholas Taleb.
You may recall that the last time we got together, I mentioned that I found the book exceptionally interesting but difficult in places. I also stated that any mistakes in interpretation were entirely mine and that I was happy to own them as part of the learning process.
I stand by these statements.
I had intended to write this article on the topic of iatrogenics, but plans have changed. The reason for this is that I have discovered a flaw in my previous article, and I think it is worthy of exploration.
In my previous post, I referred to the coronavirus pandemic as a black swan, an unpredictable event with a severe negative impact. I have since seen video footage where Taleb himself asserts that Covid-19 is not a black swan event. Indeed he is thoroughly ticked off that people are mistakenly describing it as so. This reasoning would appear to be a potentially rewarding point to start today’s article. Why does Nassim Nicholas Taleb state that the current pandemic is not a black swan event?
Taleb’s main argument is that there have been seventy-two deadly plagues and pandemics throughout history. He also argues that many novels, films, and television shows have featured dangerous contagions sweeping through great swathes of the population. In this sense, says Taleb, one cannot argue that the coronavirus pandemic could not have been seen ahead of time; it’s just that so few people saw it.
And it is this definition that causes me a great deal of difficulty. Well, not the description, but the inference. With risk management and risk detection, what should we be scanning the horizon for, and how will we know when we have seen it?
It seems that the best an organisation can hope to achieve is to be robust to many things, antifragile to a few, and have removed the downside to almost everything. That is to say, my company is unkillable, but I am aware that some circumstances will harm it, but only temporarily.
I will go one stage further here. I think this is what lean has attempted to achieve. Another metaphor employed by Taleb is that of a forest. To remain strong, the forest must have small, natural fires to remove scrub and old material. If we attempt to prevent these necessary flare-ups, we increase the risk, and the size of the downside, of the large scale forest fire.
This is an easy concept to extrapolate to business. For commerce to remain strong, some businesses need to fail. As these businesses scale up in size, their impact on the whole increases exponentially. Global financial crises become attributable to the failure of the whale-sized few.
In our previous article, we have already discussed how this thinking can be scaled down to cover an individual, lean and learning organisation. In the early stages, those individuals who do not believe in the mission may well leave, creating growth opportunities.
But let’s go a stage lower, to the individual department or cell. In the manufacturing world, defects seldom come without warning. Part of our problem-solving methods will inevitably lead us to ask the question, “what has changed?” As thinking people, we seem to prefer problems that are mired in the complexity of common-cause variation. But the truth is that a fair proportion of opportunities fall within much more transparent special-cause parameters. The predictability of these special-cause inputs can lie in what we choose to measure.
Many of us are familiar with the ideas around lead and lag metrics, but it is surprising how often we are reliant on the latter to paint a picture of how we are doing.
A lag metric measures history – even if that history was just a few seconds ago. Quality is a lag metric. I can use a parts-per-million measure to predict, reasonably, how I will perform tomorrow, but I can never be sure – I am always in the hands of probability.
Taleb terms this as “the turkey problem.” Each passing day, a turkey on a farm gathers a growing data set that tells the turkey that she is well-loved by the farmer. The bird is fed royally, given a lovely field to peck around during the day, and is kept warm and safe from predators at night. Every day that passes reinforces, in the mind of the turkey, that life is good – that is until the black swan of Christmas arrives.
History is no guarantee of tomorrow.
However, what happens if we measure 5S adherence and improvement?
Now we have a lead metric. 5S is a lead metric of so many things. Because 5S promotes standard work, an improving 5S environment will often be correlated with a quality improvement. Because 5S seeks to reduce waste, you may find that your on-time delivery improves. And, most importantly, because 5S is a learning journey centred around respect for people, you will find that the morale and engagement of your team improve remarkably.
Such is the power of a lead metric. We can apply it at any time to increase our organisational learning and agility. We do not have to wait for a historical measure to tell us trouble is on the horizon. Nor do we have to wait for a few more days of the historical metric “just to be sure” that we’re in a bit of a mess!
Granted, such an approach would not have protected us from the Covid-19 pandemic, but it would help us create an organisation that is as quick as a cat to find the silver lining in every cloud. This organisation is populated with engaged, dynamic people who are primarily problem-solvers and thinkers before they are operators and workers.
The predictability at play here is the knowledge that our business is like plasticine – ready to be moulded into whatever the landscape requires and to be able to do that quickly while constantly learning. For to me, organisational learning through adversity makes us all antifragile.