strategy+business is published by PwC Strategy& LLC.
or, sign in with:
strategy and business
 / Winter 2013 / Issue 73(originally published by Booz & Company)

Business Literature: Best Business Books 2013

Best Business Books 2013: Strategy

The final two injunctions, determining what capabilities you’re going to need to execute your strategy and what management systems are needed to support your choices, can look a lot like building a corporate capacity for continuing innovation. It’s telling that in his credits to outside advisors, Lafley mentions that he used Innosight, a consulting firm specializing in systematizing innovation, at the same time that he used Monitor and Martin for counsel on strategy.

Useful Paranoia

In my career, I’ve had the opportunity to help organizations with hiring. One lesson, acquired at some personal cost, is this: When references report that the candidate “doesn’t suffer fools gladly,” pedal backward furiously. The phrase is typically code for: “However talented, he or she is an ass—narcissistic, oblivious to the sensibilities of others, and, in the end, likely to explode any equanimity your team might possess.”

Upon a superficial reading of his newest book, Antifragile: Things That Gain from Disorder, one might conclude that Nassim Nicholas Taleb doesn’t suffer fools gladly. In fact, he’d probably be the first to tell you so—and he does, repeatedly. Taleb has no use for consultants, almost all economists, academics, large corporations, large banks, the typical central government, the “Soviet–Harvard” establishment (whose members believe, he says, that their lectures on how to fly enable birds to do so), Nobel Prizes and prize winners, and most forms of routinized planning.

Why then include Taleb’s book among the year’s best works on strategy? For at least three reasons. First, it’s a slap-upside-the-head antidote to any potential hubris on the part of a strategic planner or, for that matter, anyone else who thinks he or she can confidently predict what’s going to happen. (Those smug, silver-haired priests?) As in his prior works Fooled by Randomness: The Hidden Role of Chance in the Markets and in Life (Texere, 2001) and The Black Swan: The Impact of the Highly Improbable (Random House, 2007), Taleb brings home just how vulnerable we are to the unexpected.

Second, from Taleb’s wild, seemingly otherworldly perspective comes a lot of support for the relentlessly experimental, small-scale-at-first, buy-options-when-you-can strategy building that McGrath advocates. Taleb classifies phenomena according to their place in a “triad” of vulnerability: from the fragile (a porcelain teacup; the incredibly intertangled global banking system), through the robust (things that can take a few hits, such as owner-operated businesses), to the antifragile, which actually benefit from a few knocks (the human body, if the blows aren’t too heavy; a writer’s work as it’s exposed to criticism).

For a strategist looking to develop an antifragile business, the point would be not to sit there with industry analyses and economic forecasts—almost inevitably incorrect or irrelevant, according to Taleb. Instead, a strategist should go looking for the opportunities hidden in the knocks and bumps presented by the on-the-ground realities of ever-changing markets. He tells the secondhand but hilarious tale of an acute student of market movements who did very well for years trading in “green lumber,” all the while thinking he was dealing in boards painted green rather than in freshly harvested timber.

For more than a decade, scholars have been advocating and explaining the use of real options in strategy—valuable work, but pretty tough going for the average strategist. Given Taleb’s sense of ever-looming uncertainty, his discussion of options and the necessity of acquiring them can be downright thrilling. His analysis traces their use back to the pre-Socratic philosopher Thales, and he buttresses his advocacy with arguments from classic Stoic philosophers, particularly Seneca.

Anyone who sends us back to read Seneca can’t be all bad. (What other book have you encountered recently that left you wondering, “Gee, I wonder what the author would have had to say about Diogenes?”) And therein lies the third reason for recommending Antifragile. Although maddeningly opinionated, at least a third too long, and freighted with 70 pages of relatively unreadable appendices and bibliography, the book is full of refreshing, in-your-face challenges to what we think we know, put-downs of the otherwise celebrated (Glenn Hubbard, Joseph Stiglitz, and Tom Friedman, to name just a few), and practical insights useful even in daily life. Taleb notes, for example, that most of the foods he enjoys—wine, cheese, some fruits, vegetables, meat, and fish—have been around a long time, and that nowadays all the most delicious varieties seem to come from small producers, not large industrial enterprises. Perhaps not a shockingly original observation, but useful to ask your waiter about the next time you’re contemplating a menu.

Follow Us 
Facebook Twitter LinkedIn Google Plus YouTube RSS strategy+business Digital and Mobile products App Store


Sign up to receive s+b newsletters and get a FREE Strategy eBook

You will initially receive up to two newsletters/week. You can unsubscribe from any newsletter by using the link found in each newsletter.