Master of Business Resilience

Following our previous post in which we introduced the Cycle of Transformation and the Cycle of Disruption, we like to propose the antifragile counterpart of the Master of Business Administration (MBA): the Master of Business Resilience (MBR).

To explain why we are proposing a transformational-counterpart to the MBA-graduates, let’s recall the Cycle of Transformation™:

ROUNDMAP_Cycle_Transformation_Copyright_Protected_2019

Now let’s focus on two sections, Productiveness (fragile/favorable) versus Resilience (antifragile/unfavorable) and consider the following statement by John P. Kotter, Emeritus at Harvard Business School:

Any company that has made it past the start-up stage is optimized for efficiency rather than for strategic agility—the ability to capitalize on opportunities and dodge threats with speed and assurance.

And add this statement to the words spoken by Margaret Heffernan, a former CEO of five businesses, author of five books in which she explores business and effective leadership, and a part-time lecturer at the University of Bath School of Management in England:

In an environment that defies so much forecasting, efficiency won’t just not help us, it specifically undermines and erodes our capacity to adapt and respond.

Now let’s have a look at the realm of excellence of an MBA-graduate:

The role of ‘business administration‘ refers to ‘the bureaucratic or operational performance of routine office tasks, usually internally oriented and reactive rather than proactive. Administrators, broadly speaking, engage in a common set of functions to meet an organization’s goals.

It isn’t difficult to see that the MBA-graduate is likely to be a fish-in-the-water in the Productive state. Nor is it hard to see when the MBA-graduate starts to lose his/her edge: during the Responsive and Resilient states ─ despite their futile efforts to regain control by reinforcing business procedures.

How is this relevant today?

Ok, now let’s recall the Cycle of Disruption™:

ROUNDMAP_Cycle_of_Disruption_Copyright_Protected_2019

The Cycle of Innovation and Disruption reads like this: technological innovation leads to technological disruption (Schumpeter ─ creative destruction;  Christensen ─ disruptive innovation) which leads to social disruption (f.i. strikes, unemployment, the rise of countercultures) which demands social innovation (f.i. new regulation and re-education).

Ever since the introduction of Intel 4004, generally regarded as the first commercially available microprocessor, we’ve witnessed an acceleration of technological progress, peaked in value on March 10, 2000, ending in the .com bubble. Schumpeter, who introduced the concept of business cycles, was convinced that creative destruction (or disruptive innovation) was the sole driver of economic growth.

Despite the economic crisis in 2007/2008 (to be attributed to a dramatic re-introduction of mark-to-market accounting from the 1930s), the number of businesses that disrupted the marketplace has grown exponentially:

  • Google ─ disrupting Yellow Pages
  • Netflix ─ disrupting Blockbuster
  • Apple iPod ─ disrupting SONY’s Digital Walkman
  • Apple iPhone ─ disrupting many industries, amongst with Kodak
  • Uber ─ disrupting the taxi-industry
  • Airbnb ─ disrupting the hotel industry
  • Amazon ─ disrupting the book-industry, and market and distribution orchestration in general
  • Facebook – disrupting the ad-industry

The list is endless.

Disruption has become the norm, no longer the exception.

Therefore, most businesses find themselves either being disrupted or disrupting others, in such a complex market that, according to Margaret Heffernan, ‘experts and forecasters are reluctant to predict anything more than 400 days out’. And, therefore, Heffernan concludes:

If efficiency is no longer our guiding principle, how should we address the future? What kind of thinking is going to help us? What sort of talents must we be sure to defend? In the past, we have been thinking about just-in-time management, now we have to start thinking about just-in-case ─ preparing for events that are generally certain but specifically remain ambiguous. This means we have to plan for events that might not occur, which isn’t efficient but it is robust.

This made me think: if MBA-graduates excel under fragile circumstances, in which standardization and planning prevail over experiments and improvisation, what graduate is going to help us rebound when our products and services are no longer relevant and we need to rethink our value creation processes?

I couldn’t think of any, despite Kotter’s efforts to scheme change into the MBA-practice. So I decided to introduce an antifragile-counterpart of the MBA, an antifragile hero: the Master of Business Resilience (MBR).

Resilience means: the power or ability to return to the original form, position, etc., after being bent, compressed, or stretched; elasticity; the physical property of a material that can return to its original shape or position after deformation that does not exceed its elastic limit; an occurrence of rebounding or springing back; a movement back from an impact.

I believe resilience is the essence of antifragility (agility is a part of antifragility). Contrary to the ‘natural’ response of an MBA to disruption ─ to try to regain control by reinforcing business procedures and thus limit the capabilities to break away from digression ─ the MBR needs to raise responsiveness with which the business can respond quickly and effectively to threats and opportunities by introducing multiple scenarios that will not only increase its survival-rate but also determine which products, services, and capabilities will help the business to rebound and thrive in the future.

Antifragility is a property of systems that increase in capability to thrive as a result of stressors, shocks, volatility, noise, mistakes, faults, attacks, or failures. It is a concept developed by Professor Nassim Nicholas Taleb in his book, Antifragile.

However ─ keeping my study as a non-executive board member in mind ─ most business executives today are risk aversive while shareholders hunger for dividends. Consequently, the narrow-focused and ignorant outlook executed by MBA-graduates will impede the resilience a business needs to have to rebound from waves of disruption.

So, what does the future MBR-graduate need to master?

I believe the ROUNDMAP framework is a good starting point. Our program aims to increase commercial outcomes by focusing on the level of truth that is most closely connected to the market: the customer lifecycle. Customer Intelligence is most likely to tell the business where to go. All we need to do is select the new areas in which we can offer the most value and are most likely, based on our current capabilities, to compete sustainably in the future.

In the image below, in the ValueHub™ Formula, the way we see it: the MBA-graduate excels in the Business-to-Customer Dynamics (left of the middle), while the MBR excels in the Customer-to-Market Dynamics (right of the middle):

ROUNDMAP_Formula_Copyright_Protected

Any suggestions? I love to read them!

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