What Gartner Gets Wrong About Antifragility

What Gartner Gets Wrong About Antifragility

You know a topic has gone mainstream when Gartner starts covering it.

For many years, the concept of antifragility was the underdog in the business world. When I first read the book in 2016, there was a lot of buzz about it, but I rarely saw it implemented in a business context (outside of finance).

And neither did I. To be honest, it took me at least three years to wrap my head around it, as well as to apply it in a business context.

Well, maybe I'm not the quickest learner, but once it clicked, it stuck.

My long and intellectually painful journey had one main reason:

I started from the wrong end.

I tried to understand and implement antifragility without first understanding fragility.

Let's quickly return to Gartner.

I have mixed feelings when I see them tackling antifragility.

Mixed, in the sense that this concept can be easily butchered. Made wishy-washy. Turned into something purely theoretical and not actionable. A lot of the concept's reputation depends on the capability of the Gartner analyst.

If they get it right, all is well. But if not, it risks being dismissed as a useless concept.

And from reading the first publications of their research and listening to their podcasts, it seems they are getting some things wrong.

What are they getting wrong, you ask?

To elaborate on their mistakes, I need to continue with my story.

I started at the wrong end. I couldn't grasp antifragility without first understanding fragility.

When you start with fragility, you quickly realize that it can't be the case that systems are:

Fragile - Robust - Antifragile (as the Gartner colleague suggests).

Nassim states in his books that systems or things are only robust up to a point. They are only antifragile up to a point. There can always be too much of something.

But let's scrutinize the concept that things are first fragile, then robust, and finally antifragile.

I'll ask you, if an event can be too big for a robust system (hence it breaks), how can it become antifragile afterward? Right, that's not possible.

If a system or thing starts in the fragile space, how would it ever become robust? It's a fundamental property of a fragile system that it will break sooner or later.

That means, logically concluding, systems or things have a different order.

They must be robust first (up to a certain point), then they may become antifragile (systems can't be antifragile against every event). Lastly, every system will reach its fragility threshold and break (the question is how quickly). Hence, fragility must come last.

Here's an illustration:

If a system were fragile first (before being robust), it would break too early and would not be able to develop robust or antifragile structures.

This was an extremely important realization in my journey of applying antifragility in a business context.

Because this meant, without removing fragility in the system (or pushing the fragile threshold further out), we would never become antifragile.

Now everything became much easier. I didn't need to focus on antifragility, which is hard to implement in the real world. Instead, I just had to focus on fragility. That's easier. I could now look for bottlenecks (no math needed, though it helps) and identify fragility.

(Please remember that there are different ways to define fragility; a bottleneck is only one very important example).

Interestingly, once you find fragility in our interconnected world for your company (especially in supply chains), you have most likely uncovered a more global bottleneck—a fragility that affects more companies or entire supply chains.

And if you've found that, we can start talking about antifragility as well.

Antifragility is the positive, non-linear response to an event. You should be able to compute some kind of payoff to determine if it truly is antifragility.

The payoff is best calculated in monetary terms.

Imagine you've found a global bottleneck, a fragility in a system not only your company relies on but also an entire industry or global supply chains.

Now we're talking. If you can solve this issue, you will most likely benefit financially from an event that would be negative for many companies but positive for you—perhaps even highly profitable.

If and how this concept links to Resilience and System thinking, I will elaborate in next Newsletters. Make sure to subscribe!

Friends, thanks for reading!

Marco

P.S.: If you want to stand out of the Resilience / Risk crowd, DM me “Antifragile”.