Antifragility in 2022 Britain...
...and news on Off to Lunch's podcast
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Antifragility is a concept introduced by Nassim Nicholas Taleb, author of Fooled by Randomness and The Black Swan, in his 2012 book Antifragile. It means, in short, becoming stronger when exposed to stress or chaos, the opposite of being fragile.
Taleb introduced antifragility as a concept that everyone, including businesses, should aspire for. The concept also helps us understand what makes us fragile. Taleb gives examples of entities that are antifragile. These include Hydra, the mythological Greek creature which grows back two heads when one is cut off, and the human body, whose muscles grow back stronger after being damaged during exercise. This is an extract from the book:
It [antifragility] is behind anything that has changed with time: evolution, culture, ideas, revolutions, political systems, technological innovation cultural and economic success, corporate survival, good food recipes (say, chicken soup or steak tartare with a drop of cognac), the rise of cities, cultures, legal systems, equatorial forests, bacterial resistance... Even our own existence as a species on this planet. And antifragility determines the boundary between what is living and organic (or complex), say the human body, and what is inert, say a physical object like the stapler on your desk.
When I was studying the front pages of the newspapers this morning the importance of being antifragile in Britain in 2022 was clear. The front page of the Financial Times reads: “Shielding families from fuel-bill shock reckoned to cost £100bn”. The front of the Times business section was: “Energy crisis will destroy viable firms”.
I am pretty sure that Taleb would suggest that any business that cannot withstand unexpected shocks or events is by definition not viable. When talking about businesses one of the strategical trends he criticises is the obsession with optimisation because it leaves no room for unexpected events or changes in circumstances. He also says businesses and households should avoid debt.
William Hague wrote in his Times column yesterday that once-in-a-lifetime concepts should be considered the new normal. You can read that here. Much of the thinking in this piece aligns with the ideas espoused by Taleb. The solutions that Hague suggests to counter this are about being if not antifragile, less fragile:
The person who retired early on certain premises might want to think about going back to work. The firm that imports all its supplies from one country, or through one port or down one river, needs to diversify. The future government, of Truss, Sunak, Starmer or whoever, needs to help those who will struggle while helping others to adapt to the end of normal.
Sadly, as I wrote back in July with a nod to The Simpsons, Liz Truss and Rishi Sunak are not offering policies that address this.
One of the best things I read over the last two weeks while Off to Lunch took a two-week break was an essay by Dominic Sandbrook, co-host of The Rest is History podcast (which Off to Lunch has recommended before). He wrote in the Daily Mail about the startling similarities between now and the 1970s. You can read the piece here.
The similarities include rampant inflation being driven by rising oil prices and a foreign war but also a stagnant economy, strikes and a heatwave. The piece is a reminder of how many failed attempts there were to tackle inflation in the 1970s and how, in the words of Sandbrook, it is “appallingly difficult to stop” according to the lessons from history. He added:
What should really alarm our incoming prime minister is that inflation is not merely an economic issue. It’s a moral issue, eroding thrift and breaking the unwritten contract between savers and the state. And as the 1970s proved, it’s politically poisonous, driving a wedge between savers and borrowers, old and young, those represented by trade unions and those dependent on fixed incomes.
As so often with a deep-seated disease, the cure was almost as painful as the symptoms. For although Thatcher wrung it out of the system eventually, she only did it by applying the most stringent medicine, with interest rates peaking at an excruciating 17 per cent at the end of 1979. A repeat performance today wouldn’t just blow the housing market to pieces. It would lead to a tidal wave of repossessions and see thousands of families driven into destitution.
As Sandbrook writes, while Truss and Sunak talk about being Thatcherite they do not accept the need for the “painful changes” that she pushed through as prime minister. In other words, things are likely to have to get worse to get better. If that is the outlook, then being antifragile will matter more than ever.
Podcast coming soon…
I am delighted to say that Off to Lunch’s podcast, called Business Studies, will launch at the end of next month. I have spent the last few weeks doing interviews and preparation for the launch. There are big names from the business world appearing on the podcast and I will share those names with you very soon. The podcast is taking a second look at big business stories from the past. It asks those involved whether the stories happened the way we think they did and what we can learn from them today. The episodes will drop every week on Substack but also on Apple, Spotify or wherever you get your podcast. It will be free for everyone with added content in Off to Lunch for subscribers. In advance of the launch, I can reveal the logo for Business Studies below….
Other stories that matter…
Manchester is considering banning smoking in outdoor public spaces such as Piccadilly Gardens in the city centre. New York and Melbourne have already introduced similar bans (BBC)
Liz Truss has joined calls to keep Doncaster Sheffield Airport open. A consultation on its future was due to close this week (Yorkshire Post)
It’s not just the UK asking itself serious questions about how to improve productivity, so is the US. The Faster, Please! newsletter (Rishi Sunak is a big fan) looks at the challenges facing the US and how to accelerate innovation (Faster, Please!)
Businesses should follow the example of baseball and review the early performance of new hires to establish what skills and experiences could have predicted their success (or lack of it) (Harvard Business Review)
Being around water - oceans, lakes, rivers and more - provides a range of mental health benefits and can reduce anxiety, neuroscientists say (WSJ)
How we buy, sell and rent homes is ripe for technological disruption and Adam Neumann’s new venture may only be the start according to this interesting column from Katie Prescott in The Times (The Times)
A look at the tension at Apple and Silicon Valley more generally about attempts to get staff back to the office. Companies are taking remarkably different approaches in California. Apple is facing growing opposition to its demand that staff are in the office at least three days a week from September (FT)
And finally…
Whether you like football or not, I recommend Amazon’s All or Nothing: Arsenal as a fascinating insight into a high-profile organisation and people trying to do their best in testing circumstances.
Some of the narratives are a bit forced (like Pierre-Emerick Aubameyang being portrayed as a villain almost right from the start) but this is offset by Amazon getting incredible behind-the-scenes access and the chance to hear Mikel Arteta’s sometimes bizarre team-talks and attempts to explain his vision to the players. I know plenty of people with no interest in sport whatsoever who have enjoyed the eight-episode series. The show works even better in light of Arsenal’s strong start to the new season, which suggests that the hard work of last season (this is what the show focuses on) has worked. All or Nothing also appears to have helped repair the strained relationship between the club and its fans.
If you enjoy the show I highly recommend checking out the NFL versions of All or Nothing, which is where the concept originates. The 2017 edition that follows the Los Angeles Rams includes footage of the coach telling all the players he has been fired…
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Best
Graham