Recession Prep 101: Planning is Everything

Whether it’s official or not, the signs of a looming recession surround us. But that doesn’t necessarily mean doom and gloom. During the Great Recession of 2008, for example, while GM needed a huge government bailout to survive, Ford made it through without a Federal dime. Both are large automakers, both based in Detroit, so what made the difference? Planning! Ford started preparing for a downturn nearly two years before. Greg Moran – Ford’s Chief Strategy Officer at the time – shares that history and what we can learn from it to ride our organizations through the current economic shifts.

 

Innovative Leadership: Moving Beyond Resilience To Antifragility

Greg Moran, a C-level digital, strategy, and change leadership executive with extensive global operations experience, shares his experience in this podcast, Recession Prep 101:  Planning Is Everything.

This article is written by Christoper Washington, a learning ecosystem designer who serves as Executive Vice President and Provost of Franklin University

Over the past two years, the destabilizing effects of the pandemic and other socio-economic, geopolitical and technological headwinds have made it difficult to harmonize plans, infrastructure, resources and programs with the changing needs of stakeholders. Changing stakeholder needs and differences in leaders' responses to disruptive forces in higher education resulted in an uneven recovery from the pandemic, with some colleges struggling or even shutting their doors, others resiliently bouncing back to pre-pandemic operating levels, and some even growing stronger in achieving their mission. With regard to the destabilizing effects of change, it was the 20th-century pugilist Mike Tyson who said, “Everyone has a plan till they get punched in the mouth.” For many nonprofit and educational leaders, the pandemic was a sucker punch.

According to the World Economic Forum’s (WEF) 2022 Global Risks Report, the pandemic is much more than a temporary and single bump in the road. Researchers at the WEF suggest that organizations will increasingly encounter, and be challenged by a “volatile, fractured, and increasingly catastrophic” outlook that includes social cohesion erosion, geo-economic confrontations, cybersecurity failures, misinformation and digital inequality, among other factors.

I think it’s time for leaders to move beyond their initial reaction to the pandemic's sucker punch and begin to plan for the next rounds of disruption to come. In a recent article, Maureen Metcalf, my fellow Forbes Councils member and a colleague I work with on podcasts, articulates an innovative leadership framework that explains how leaders can develop more complex perspectives as a way to manage complex challenges. One such lens that enables leaders to conduct situational analysis and realign elements of the system to achieve growth during periods of disruption is put forth by Nassim Nicholas Taleb in his book Antifragile: Things That Gain from Disorder. This lens accounts for the impact of stress on organizations over time and articulates an action logic that can result in strengthened systems. In relation to stressors, Taleb classifies organizational systems in one of three ways:

Fragile: Systems that break under pressure, where the results of the organization decrease in value due to the negative asymmetry with the operating environment.

Robust: Systems that stay the same under pressure, or are resilient and have the ability to return to a state of symmetry and balance with the operating environment.

Antifragile: Systems that get stronger under pressure (up to a point), where the results of the system increase in value due to positive asymmetry with the operating environment.

Taleb suggests that these three states are relative to a given situation, and not an absolute property of a system. For example, a glass may be robust enough to hold hot water, but fragile enough to break if it is dropped. One can also determine if an object or system feature is more fragile than another and predict which one will last longer in a given situation. For Taleb, antifragile systems are strengthened by introducing them to a modicum of harm, challenge or stress. Think weightlifting for muscle strength or vaccinations for disease immunity.

The action logic and related decisions leaders make in response to disruption can either make organizations more fragile, resilient or antifragile. Taleb calls professionals who cause systems to be more fragile over time the “fragilista.” I think this type of thinking is reflected in responses to change for many non-profit and educational organizations that have experienced a loss in value during the pandemic. These fragilista organizations:

• Are unwilling to consider competitive forces and to respond accordingly.
• Define all disorder as "bad" or as roadblocks to goals.
• Refuse to look objectively at low-performing programs and to take appropriate action.
• Maintain and defend the “status quo” rather than experiment with alternative approaches that may be more effective
• Choose not to keep pace with emerging risks such as digital security and cyber-threats
• Have inadequate cash reserves or resources to invest in more promising options.
• Restrict the use of staff and resources rather than engage all resources and the collective intelligence of people in resolving problems and pursuing new opportunities.

Developing A Fresh Mindset

Alternatively, more innovative leaders can think beyond resilient approaches to antifragile approaches that respond to disruption in ways that increase the performance value of their organization. Presented below are eight ideas for leaders who are interested in developing a more antifragile mindset.

1. Heighten awareness of changing situations by regularly reading reports such as the WEF’s Global Risks Report mentioned earlier.
2. Set financial growth goals, develop plans to achieve them and work to assure that the value of intended accomplishments exceeds the cost of pursuing them.
3. Seek to detect fragilities in organizational systems and minimize them, rather than avoid addressing the necessary cuts that can potentially drain critical resources away from more valued initiatives.
4. Encourage creativity and risk-taking that supports growth strategies. This can include entrepreneurship activity, running pilot projects and conducting program experiments.
5. Collaborate with partners who are willing to grow with you and to put “skin in the game,” as suggested by Taleb. In this way, partners are invested in the outcomes, more likely to think long-term and less likely to be affected by disruption.
6. Consider what Gervase Bushe and Jacob Storch call “generative images” when communicating about changes to your team. Metaphors of organizational transformation can offer fresh insights and change one’s ideas about what is possible and desirable to achieve.
7. Pursue interdisciplinary learning by tackling problems that don’t fit neatly into a disciplinary area, connecting ideas across disciplines, learning from experts in different fields and taking field trips to learn about other complex organizational systems.
8. Participate in innovative leadership development programs. Across industries, there are plenty of such programs designed for leaders.

Leaders can expect to face multiple sources of disruption in the foreseeable future. It is reasonable to think that disharmony and disruption on the horizon will penalize more rigid and inflexible leaders and their organizations. Alternatively, those leaders willing to develop an antifragile mindset can be well positioned to adapt their plans and approaches to emerging realities and grow through the stress and disorder.

 

ABOUT THE AUTHOR

Christopher L. Washington, Ph.D. serves as Provost and Executive Vice President of Academic Affairs at Franklin University. He is a Fellow of the Innovative Leadership Institute, and serves on the America250 International Advisory Council.