Innovation: Counters Asymmetric Threats, Fuels Resilient Growth

By Nicos G. Sykas*

The dynamics of Covid-19 pandemic share striking similarities with the twin environmental crises of global heating and species extinction. For example, each new Covid-19 case can spawn others and so lead to escalating infection rates, just as hotter climates alter ecosystems, increasing emissions of the greenhouse gases that cause warming. Both are dangerous feedback loops. Measures for containing Covid-19 –the need for early intervention to reduce death and economic damage; the curbing of some aspects of people’s lifestyles for the good of all of us– should also be at the heart of averting environmental catastrophe.

We can also draw comparisons in terms of lagged impacts. For coronavirus, the delay –or lag– before symptoms materialize means infected people spread the disease long before they feel effects and change behavior. This is analogous to our destruction of habitat and eventual species extinction, as well as lags between emissions we pump out and the full effects of global heating, such as sea-level rise. As with viral infection, behavior change may come too late.

The similarities between the Covid-19 pandemic and environmental disaster lie not just in their nature –lagged impacts, feedback loops and complex dynamics– but also in their mitigation – there is no substitute for early action. Delayed action resulting in more Covid-19 deaths will also cost nations more in economic growth, just as hotter and more disruptive climates will curtail economic prosperity.

Matt Ridley in his book ‘How Innovation Works’ states that: “Vaccine development had languished in the twenty-first century as an orphan technology, insufficiently encouraged by governments and the World Health Organization. Ignored, too, by the private sector because new vaccines are not profitable thing to make […] By far the biggest failure of the 2020 pandemic is the failure to have done enough innovation in the field of vaccines”. Ridley notes that we are experiencing an innovation famine: “The Western World, especially since 2009, seems to have forgotten how to expand its economy at any reasonable speed […] With some exceptions, mostly in the digital world, the innovation engine is sputtering and society is not seeing as many new products and services of value as it needs”.

Those who say that indefinite growth is impossible, or at least unsustainable, in a world of finite resources are wrong, for a simple reason: growth can take place through doing more with less: more food from less land and less water; more miles for less fuel; more communication for less electricity; more buildings for less steel; more transistors for less silicon; more correspondence for less paper. It will always be possible to raise living standards further by lowering the amount of resource that is used to produce a given output through economies and efficiencies created by innovation. Growth is therefore indefinitely sustainable.         

We live in a world of non-linear change, black swans and perfect storms, and still, it seems that we think in a linear mode. Nonlinearities cannot be tackled with linear models and static tools. We need asymmetric innovation strategies, dynamic tools and a multidimensional, multidisciplinary, multiscale approach to cope with grand challenges and stop the ‘sixth mass extinction.’

According to Miller, building capabilities out of asymmetries involves that the organization is capable of doing three things well:

a) Discover the asymmetries and discern the potential between them; identify the asymmetric resources embedded within the institutional, technological, and market contexts.

b) Turn asymmetries into capabilities by strategically embedding them within an organizational design configuration that exploits them and sustains their development.

c) Match asymmetry-derived capabilities to market opportunities by developing asymmetric innovation strategies.

In his book ‘Antifragile, Things That Gain From Disorder’ Nassim Taleb states that: “In every domain or area of application, we propose rules for moving from the fragile toward the antifragile, through reduction of fragility or harnessing antifragility […] I initially used the image of the barbell to describe a dual attitude of playing it safe in some areas (robust to negative Black Swans) and taking a lot of small risks in others (open to positive Black Swans), hence achieving antifragility […] But the barbell also results, because of its construction, in the reduction of downside risk – the elimination of the risk of ruin […] For antifragility is the combination of aggressiveness plus paranoia – clip your downside, protect yourself from extreme harm, and let the upside, the positive Black Swans, take care of itself”.

According to Taleb, antifragility is beyond resilience or robustness. The resilient resists shock and stays the same; the antifragile gets better. This property is behind everything that has changed with time: evolution, culture, ideas, revolutions, political systems, technological innovation, cultural and economic success, corporate survival, the rise of cities, cultures, legal systems, equatorial forests, bacterial resistance… even our own existence as a species on this planet.

In his book ‘The Black Swan – The Impact of the Highly Improbable’ Taleb indicates that: “Indeed, the notion of asymmetric outcomes is the central idea of this book: I will never get to know the unknown since, by definition, it is unknown. However, I can always guess how it might affect me, and I should base my decision around that […] This idea that in order to make a decision you need to focus on the consequences (which you can know) rather than the probability (which you can’t know) is the central idea of uncertainty […] As it happens, many rare events yield their structure to us: it is not easy to compute their probability, but it is easy to get a general idea about the possibility of their occurrence. We can turn these Black Swans into Grey Swans, so to speak, reducing their surprise effect.”

Taleb describes optionality as a way to achieve antifragility: “An option is what makes you antifragile and allows you to benefit from the positive side of uncertainty, without a corresponding serious harm from the negative side […] Let us call trial and error tinkering when it presents small errors and large gains […] The antifragile needs to select what’s best – the best option […] Trial and error… is not really random, rather, thanks to optionality, it requires some rationality. One needs to be intelligent in recognizing the favorable outcome and knowing what to disregard […] We can, from the trial that fails to deliver, figure out progressively where to go […] Innovation is precisely something that gains from uncertainty: and some people sit around waiting for uncertainty and using it as raw material, just like our ancestral hunters”. As Taleb notes, the first step is the detection and removal of any fragilities (vulnerabilities) and the elimination of the risk of ruin. Positive Black Swans (opportunities) also have a necessary first step: you need to be exposed to them.

After many years of research, I developed a new, dynamic Innovation Model which can help Organizations discover and exploit valuable asymmetries to produce exponential multiplicative results and benefits. This pioneering method is presented analytically in a 225-page practical Guide which, among other, describes more than 60 asymmetric innovation strategies, cross-cutting tools and creativity techniques which can help Organizations modify their exposure accordingly. The aim is twofold: exploit favorable asymmetries (open to opportunities) and avoid unfavorable asymmetries (defensive against threats). The new Innovation Paradigm can: a) Help Organizations innovate under conditions of extreme uncertainty, b) maximize the impact scientific, social, economic– of innovation, c) accelerate recovery from the Covid-19 induced recession and d) strengthen all the pillars of National Power.

*Nicos G. Sykas is Strategy, Communication and Innovation Consultant.

X