Building antifragile competitive advantage

The lessons of Inner Leadership are an essential step to delivering sustainable leadership. They bring stability, focus, alignment, and competitive advantage.

This is the second in a series of eight articles explaining why and how.


We start our search for sustainable leadership with a quote from Buckminster Fuller. He said, “You never change things by fighting the existing reality. To change something, build a new model that makes the existing model obsolete.”

This rule has applied to all successful innovations, from the bronze age that replaced the stone age, to the industrial revolution, electricity, and smartphones. The reasons all these innovations succeeded is because they made what existed before obsolete.

This means the first goal of sustainable leadership must be to “make existing models of leadership obsolete.” The way we do that is by introducing a style of leadership that creates significant competitive advantage.

This article describes the central core of sustainable leadership: a way to bring your organisation a form of competitive advantage that grows stronger with every challenge you face.

 

From ‘Coping with Change’ to ‘Thriving Because of Change’

We are living through a time of radical change. The management jargon calls it a VUCA world: volatile, uncertain, complex, and ambiguous. I call it simply The Churning.

No matter what you call it, the fact is that in this churning world any organisation that cannot cope with change will fail. And organisations that cope better with change will have competitive advantage: over time they will become more successful, and more sustainable.

This means the first task of sustainable leadership is to teach us not only how to survive change but to use change to become stronger.

To see how we can accomplish this, let’s look at the way change happens in organisations. Then let’s look at how to make it happen better.

 

How Change Happens in Organisations

Change in most organisations follows a sequence three steps. These begin when someone notices a potential issue (or opportunity) and raises this to the organisation.

If the organisation agrees the issue is important it then makes plans to address the matter. This is Step 2.

Step 3 is execution: the organisation implements its change plan.

These three steps define most organisational change programs:

But there is also a fourth step. What happens next is that each person affected by the change goes through a psychological and emotional transition. Some of these will be large, others small but, for better or worse, these experiences then reshape the world views of each affected person. Either they confirm more deeply what the person already knew or they teach that person something different. This is Step 4.

And the next time these people find themselves in a situation where change might be needed (back to Step 1 again) they will use these new world views, and their learning from what happened last time, to decide how they will respond: whether or not they will speak up and how they will do so (Arrow 5).

Charting this process, from planning to execution, from individual to organisation, and back again, gives us a picture I call the ‘Cycle of Leadership’. This is how change happens in organisations:

 

Making Change Happen Better

If we want to improve our organisation’s ability to handle change there are just two ways to do so: either we can improve the way we carry out each step or (better) we can close the loop.

To understand this, imagine an organisation that says one thing but does another. Perhaps it says it encourages risk-taking but actually only rewards people who meet their financial targets. Such an organisation might move successfully through the first three stages of change but it will fail at the fourth and fifth to close the loop. Instead, people will learn from experience not to believe what they are told. This will make them less willing and able to address new issues (Steps 1 and 2) and more resistant to future changes (Steps 3 and 4). Over time the organisation’s ability to respond to change will degrade.

But imagine instead an organisation that shows consistency in what it says and does: an organisation that defines a set of (say) purpose and values, then actively applies them in its day-to-day operations and decision-making. Such an organisation closes the loop. What happens next is a kind of magic.

An organisation that lives in line with its stated purpose and values teaches its people by example. When new issues arise, this deeper understanding helps people know more clearly which issues matter and which do not (Step 1). Their added clarity and confidence then helps people to create new plans (Step 2), implement them (Step 3), and handle their transitions (Step 4). In other words, by defining a set of purpose and values and putting them at the heart of its operations and decision-making, the organisation increases its ability to change. This brings competitive advantage.

And there is more. At the end of each cycle, the organisation gets to review and update its purpose and values so that when the next challenge arises the organisation becomes even more able to identify the issue and address it.

In this way, by switching from linear to circular management, both the organisation and its people become able not only to survive crises and change but to actually become stronger because of crises and change. They become what Nicholas Nassim Taleb calls ‘antifragile’.

Things that break under pressure we call ‘fragile’. Things that do not break under pressure we call ‘strong’, ‘robust’, or ‘resilient’. And things, people, and systems that actually become stronger when placed under pressure, Taleb calls ‘antifragile’.

This ability to use stress to become stronger is the foundation of ‘sustainability’ for any organisation. It is the first step towards creating Buckminster Fuller’s “new model that makes the existing model obsolete.”

This is why purpose and values matter: not because of any moral high ground but because in times of change they bring stability and direction. By defining and then acting in line with their purpose and values, leaders and their organisations become more able to handle change. This brings competitive advantage that becomes stronger with each challenge they face. And it is the first building block of sustainable leadership.

We will return to purpose and values in the sixth article of this series. But for now our next step is to understand more clearly how to make Arrow 5 happen. For that we need to look more closely at Step 4, managing transitions. This is the focus of the next article.


Originally published by Sustainable Brands.


Photo By Internet Archive Book Images via StockPholio.net

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