An antifragile business is a business that not only survives, but thrives in uncertainty. Learn how to build such a business in our new post.
A pandemic, an economic crisis, and a complete overhaul in the way we work…
As an agency, you bore the brunt of it all. Throughout it all, you believe that if you were resilient, you could survive.
But what if being resilient wasn’t enough? What if you could build an agency that doesn’t just survive, but thrives in uncertainty?
This is the ‘Antifragile Agency’ – a business that’s built for our ever-changing world.
In this post, I’ll explore the core ideas at the heart of the antifragile agency, and how you can incorporate them into your business.
Understanding Antifragility
Nicholas Nissim Taleb, explaining the idea of antifragility in a letter published in Nature magazine, wrote: “Simply, antifragility is defined as a convex response to a stressor or source of harm (for some range of variation), leading to a positive sensitivity to increase in volatility”
Sounds like a mouthful, right? If you break it down, however, it essentially means being willing to change when confronted with volatility.
Antifragility is different from resilience in that it focuses on adapting to volatility, rather than merely surviving it. A resilient organization withstands challenges and comes out unscathed; a resilient one comes out changed.
An antifragile business makes multiple bets, learning from the results, and changing its course quickly. If the external situation changes, the business is able to shift attention to winning bets.
An example would be a store that sells sports equipment. If this store only sells outdoor gear, it risks losing customers in bad weather. But if it adds indoor gaming equipment to its catalog as well, it can ensure a steady stream of customers regardless of the weather.
Antifragility is never accidental – especially in the context of creative agencies. It is a trait acquired through deliberate design.
In the next section, I’ll walk you through some of these foundational elements that can help you build a more antifragile agency.
Three Ideas for Antifragile Agencies
To understand what makes a business antifragile, you have to first understand the opposite: fragility.
Fragility is defined by two things:
- Rigidity, i.e., limited flexibility in response to volatile events
- Limited points of failure
The fashion industry is filled with examples of structurally fragile businesses. So many fashion brands ride trends and collapse catastrophically when the trend goes out of vogue. The collapse is often accelerated by their refusal (or inability) to adapt to new trends.
An antifragile business, by definition, would do the opposite. It would have widely distributed points of failure. And it would be constantly evolving to keep pace with changing trends.
Essentially, antifragile businesses share three core fundamentals:
Relentless Diversification
Diversification is the process of distributing points of failure. If you rely on a single supplier, a couple of high value clients, or a star worker to keep you afloat, your points of failure are highly concentrated. A single event – a client or worker leaving – can start a rapid collapse.
You, of course, know this already. A diverse order book, as we’ve emphasized in the past, makes your agency more robust. What’s important, however, is how you diversify.
Diversification often fails because it tends to overlook sectoral risks. If your “diversified” assets/teams/clients fall within the same cohort, you still have limited points of failure.
We saw this at the start of the pandemic when companies had, on paper, diversified their supply chains by establishing multiple factories. But since all these factories were in the same country, lockdowns ruptured their supply chains all the same.
The right approach, thus, is to diversify and counter-diversify. For example, your agency might have diversified by focusing on two tangential sectors – salons and tech startups. If there is a sudden downturn in the salon business (as it happened during the pandemic), your business would still be secure thanks to your tech startup clients.
However, this is not enough to completely eliminate risk. If all your tech clients are small businesses, any risk event that affects this cohort would affect your agency negatively as well.
Thus, your diversification exercise should always spread outside a dominant cohort.
Diversify not just across one segment but all the segment constituents as well
Spread risk across sectors. And within those sectors, spread risk across client size, project duration, area of focus, etc.
Your goal should be to minimize singular points of failure. The more you can do this, the more you’ll thrive in uncertainty.
https://www.workamajig.com/blog/antifragile-agency-how-to-build-a-business-that-lasts
Courtesy Workamajig blog and Author Sylvia Moses 7/3/2021