1 Jul Antifragility and Resilience – Key Lessons From The Airline Industry
Posted at 9:05 in Resilience by Henrik Pedersen
Whether organisational, psychological, operational or on a asset-specific level, a fundamental part of what separates resilience from regular risk mitigation is the ability to evolve following disruptive events.
It makes perfect sense.
We’re living in a world where political instability has significant impacts on entire economies, where new start-ups can threaten established players, and where data breaches can tarnish reputations overnight.
There’s also the increasing severity of natural disasters to consider. Last year, two of the five largest insured losses in the entire EU were due to unexpected floods in the UK, costing the insurers a collective £1.34bn ($1.9bn) in total.
In such a volatile environment, it is clear that only businesses committed to learning and growing stronger from disruption and disorder are destined to survive.
This ability to become stronger when subject to disruption is what is at the heart of what risk analyst and former trader Nassim Nicholas Taleb calls ‘Antifragility’ – and there are many lessons we can learn from his unique take on risk and volatility.
Becoming An Antifragile Business
To avoid the mistakes of fragile, vulnerable businesses, you will need to arm yourself with a new approach to risk. In his work, Taleb often criticised how we as humans collectively seek stability and certainty in a world that is inherently unpredictable. The key, Taleb believes, is to accept, plan for and embrace this unpredictability, using it as the basis for becoming a stronger and better prepared every single time.
After all, if one thing is certain, it’s that disruptions will happen: substations will be flooded. servers will fail, and spillages will occur.
And when they do, you should be able to implement corrective measures that reduce both the likelihood of similar disruptions ever happening again, and extent of any collateral damage.The best way to do this, is to mimic airlines and adopt an approach that fosters continuous improvement. This fundamental process is outlined in the diagram below.
In our asset resilience work with clients, we use this process to help organisations build resilience into their assets, substations and entire infrastructures. Specifically, through on-going scenario planning and maintenance, we help businesses both account and prepare for every possible vulnerability across each asset (both pre and post-event). The insights discovered through this preemptive planning can then be used as the basis for continuous improvement: lowering operating and maintenance costs and reducing the time taken to restore assets to a resilient state following disaster.
This approach is one that the airline industry implements to perfection.
Learning From Airlines
Commended by Taleb for their ability to “[convert] disorder, error, mistakes, variability into fuel for improvement”, airlines are Anti-Fragile and resilient by design. With every single crash, airlines become safer, more reliable and more secure. This is the result of a comprehensive auditing and analysis process where every process, security measure, airplane component and risk factor is scrutinised to build a detailed view of all and any vulnerabilities that allowed the crash to occur.
This level of analysis not only allows airlines to identify the cause(s) of the crash, but to highlight any other vulnerabilities that had previously not been accounted for in other areas of the business. The result of this process is an entire industry that is Antifragile and, on a local level, aeroplanes and processes that are built to be resilient.
In order for your business to become just as resilient and antifragile as the airline industry, you need to apply the same principles.
To find out more about our Asset Resilience solutions and how we can help you become a resilient business, click here.