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Hello everyone. Welcome to the 5 Minutes podcast! Today I like to continue the podcast about antifragility or antifragile. If we go back to last week's podcast I worked hard to prove to you that the opposite of fragile is not strong or it's not robust. It's not someone that resists the shock that is the opposite of being destroyed by shock. Antifragile is something that becomes better with shock. Remember when I said about our muscles? When we stress our muscles, they improve and we become stronger. When we move the dandelion through the wind, seeds fly and more than one dandelion will be born. If we think about the hydra of Hercules, the mythological figure, if you cut one head, two heads will grow. And this is the concept of antifragile. But of course, we finished the podcast with one question How do I become antifragile? And How do I create a system that is antifragile? And then I want to share with you five steps to do that. The first one, you need to reduce dramatically your fragility. And by saying that, I'm not saying the opposite of what I said in episode one, but I'm saying that you need to think like what Nassim Taleb calls the barbell bar. Remember, when you are doing weight lifting, there is a bar and you put weights on one side and the other side and the concept of reducing fragility means that you will put 90%, 85% of the effort of your money into extremely low risk, extremely robust options, and 10%, 15% on the other side in absolutely aggressive, really risky initiatives.
And in the middle, you don't put anything. Let me give you an example in finance, let's suppose you have $100 of savings. What I'm telling you is that you should put $90 in US Treasuries and $10 in Bitcoin. Why it's such so dramatic because on the 90% you are protecting the core, on 10%, you are accepting the fragility to get to the antifragility. And then you don't put and you don't jeopardize your full risks. And this is the concept of the barbell bar. I'm not saying that everybody agrees with that. For example, when we talk about the economy, some economists, some financial advisors, agree with that approach. Others, don't agree. What Nassim Taleb says is it's pointless for you to put in something that is, I would say, average risk and average return, he said. It doesn't work. You need to protect the real core 90% and the other 10% you will bet and you will bet to get antifragility. This is the first step. The second step is to generate options. And this makes me remember the episode of What Matters, the series about careers. I released that last year and episode two is about options. And I said in the video, in YouTube video, I said that you need to have options because if you don't have options, your risks will jeopardize. So you need to generate options. And how do you generate options? Being creative curious, thinking differently, and generating options by unlearning. Not by learning, but by unlearning, you unlearn things that you learn before because these is what will allow you to think differently.
When you have an antifragile system and something disrupt the system, what do you do? You don't try to go back to the previous state, but you try to learn from what happened to create a new future state that is different from the previous one and far more antifragile than the previous one. Another example I want to give during my time at Brightline we did research with The Economist and this research had a case study, and the case study is a Volkswagen case study where they call their transformation process a two-speed engine, where they put the biggest chunk of their investment in innovation, talking about continuous innovation, and I would say not completely disruptive innovation. It's how I can get better cars in the future, which kind of improvements will produce a better car, and then they create a second engine that is completely disruptive to rethink the concept of transportation. But why they did do that? Because you need to protect the core. And this goes back to the first item, reducing fragility. The third one is to create models or modularise. And what is that? It's like the Jenga game. Remember the Jenga, the tower with the wooden bricks and then you remove the bricks trying to keep the tower without collapsing. This is exactly the aim of creating models because if something gets fragile, you don't lose everything. You may lose a little bit, but you contain the damage. So you try always to create. For example, when you develop software, you create models because if one collapse or one gives trouble, you have the other ones that will continue to operate.
And this is the concept that will improve your antifragility. The fourth one is to risk your own skin. It means to have your skin on the game. And it's so true because most of the time when people have their skin on the game, they become far more antifragile. And I want to share with you, probably this is not real, but it's a good story about the architects in ancient Rome. The story tells that when the bridge, for example, the old bridge is ready, they put the architect to leave under the bridge for half a year. And why they do that is because this will make the architect or the engineer more aware of the danger of the bridge. So if something happens to the bridge, he or she will be the first one to collapse with the bridge. And they said that if you do that, the architect will be far more cautious about doing his calculations. And this is why the Rome construction is still sturdy after 2000 years. And also they said if something goes wrong, the good aspect is that we'll have one less bad architect. So we'll build resilience through failure. Of course, colleagues, I'm not saying that you should do that, but this is just I would say a story that will help us to understand what is the skin in the game. For example, many investment banks, many brokers, give, for example, bonuses in terms of stocks, they give bonuses in terms of their shares because this will help them to see their skin in the game.
If the company does not go well, it will be very bad for them. And last but not least, reflect and learn from failure. When you face a failure, you must learn and learn quick. I'm not saying that antifragile organization, do not fail, but they learn extremely fast. They adapt extremely fast and they move extremely fast. And this is what makes these companies unique. Just to recap, in step one, you need to reduce the fragility. Remember the barbell bar, the waiting list. Second, generate options. The third one creates models, create containers where you contain the situation. If something collapsed, skin on the game means if people do not have their skin on the game, it would be very hard for them to move from a fragile because they will not see themselves as fragile. They will see the company, but for them, they think they are still robust because they will not be impacted by the problem. And last but not least, reflect and learn from failure and learn fast. So these are the five steps for you to become antifragile. I'm sorry for the length of this podcast is almost twice the normal size, but I think this is a topic that is very worth learning and discussing because in the current times this is a key competence that all of us, including our organizations, must have.
I hope you enjoyed this podcast. See you next week with another 5 minutes podcast.
