Building Anti-Fragile Organisations

Organisations globally are facing an existential crisis. A little understood virus that originated in China is spreading like wildfire and fatalities are mounting globally. The scientists are confused about its behaviour, governments are exhausted in trying to contain the spread, businesses are unable to forecast the future and the people are frozen with the fear of death.

Stock markets have crashed, countries have locked down while the death toll keeps mounting. There is no visible end in sight. This is the first pandemic of the digitally interconnected age, there is unlimited information flowing across the world, but little collaboration and a lot of confusion and mistrust. While the virus spreads, time is running out. Everyone is looking for credible leadership at all levels to guide them through this crisis - from global to local. Here are some methods on how to build an anti-fragile organisation, which not just survives crises but comes out stronger.

Leadership alignment

When organisations are hit with a disruptive event, elaborate plans go out of the window. Rather than get paralysed, it is time to be nimble and quickly adapt to changing scenarios. Constitute a small task force to take quick decisions. This team forecasts the scenarios and assesses the business impact. The meetings are short, all viewpoints are considered and quick clear decisions are taken.

These decisions are relayed to team leads across the organisation. Team leads are given autonomy to take micro-decisions in line with the larger strategy. Team-wise huddles happen on a daily basis until the external situation stabilises. The culture of quick feedback and action loops makes the organisation nimble in volatile situations.

Workforce readiness

Confidence building and technology training during peacetime ensure a ready workforce during wartime. Employees should be proactively trained to use technology and work in flexible work hours outside the office space. In a crisis, when the office space has to shut down due to external reasons, the employees can seamlessly shift to the online mode. Long remote working hours might still result in boredom and a drop in productivity.

It is important to ensure the team bonding sustains through regular virtual all-hands meetings. Times of crisis are disruptive not just for the organisation but for the personal lives of the workforce as well. The top leadership needs to focus on spiritual wellness and trust-building in the work culture. A mentally secure and inspired team member is an asset during these times of stress. He helps calm others’ nerves and keeps the team morale high.

Stakeholder alignment

Any external shock could overwhelm the leadership and it is natural to lose sight of the external stakeholders. However, it is important to have external alignment with the decisions being taken within. Every organisation has many stakeholders who have vested their trust in it. These include investors, customers, contractors, partners, etc. It is important to relay all decisions proactively and transparently to the impacted stakeholders.

Building trust in these times helps in having their unflinching support later. The external situation would have impacted their organisations as well and they need to often choose whom to engage with going forward. An organisation which has shown pro-active transparency and adaptability would most likely continue to have the support of its stakeholders.

Financial security

Usually, organisations optimise their cash flows and do not have liquidity when they need it. A single shock can ruin the business. Forecasted funding and cash flows may not materialise. Ensuring the financial security of the organisation is of paramount importance. A financially stable organisation ensures the continuity of the business and job security of the employees.

When hit with an unforeseen crisis, it is important to quickly map out scenarios and their financial impact. It is time to adapt, change strategy and quickly put it into action. While learning from this crisis, it is important to ensure a 6-month cash buffer in the bank for managing future crises.

Shobhit Mathur, Dean, Rashtram School of Public Leadership

Think bold

So far the advice has been to prepare for and manage the crisis. However, the crisis could also open up opportunities that otherwise were not available. Organisations should keep an eye for the changing trends. For example, the ongoing coronavirus pandemic has opened up the world of online education. Parents who had so far hesitated to try e-learning solutions have now begun to get comfortable with it.

Businesses that are ready to scale up their offerings at this time might build a crucial edge over others. Overall, the crisis is also an opportunity for every organisation to diversify and scale up in new domains. Anti-fragile organisations will manage future disruptions better than others.

We are now in a VUCA (volatile, uncertain, complex, and uncertain) world. Going forward, with technology rapidly evolving and ecological imbalance in place, we are going to see severe disruptions more often. Each organisation should develop anti-fragility in its business model and mentally in its leadership. The ones that have an inbuilt anti-fragility will be ones that get stronger with each crisis and lead the rest. Anti-fragility is part of organisational culture and starts with its leadership. The present crisis is a wake-up call, the time is now.