The Mechanism

fusion of three great ideas

Optionality: The Central Idea

Nassim Nicholas Taleb’s theory of antifragility establishes optionality as the fundamental economic strategy for reducing exposure and creating opportunity. In short, as the number and dispersion of options increases, the more pathways there are to your goals reducing your exposure to impediments. As the number of options increases further, the market unexpectedly swerves into them, creating unforeseen opportunities.

It’s not enough to simply “keep your options open.” In the context of The Antifragile Enterprise, “optionality” is the asymmetric payoff that results from efficiently creating, culling, and exercising options. You need a systematic discipline entrenched in your company culture to become antifragile. Individuals and organizations need mechanisms to transform good intentions into disciplined action. Option Kata borrows from Martin Fowler’s Refactoring to determine what needs to change, and Mike Rother’s Improvement Kata to problem-solve the implementation of those changes.

 

Refactoring: Emergent Design

In 1999, Martin Fowler introduced Refactoring as a systematic method of improving the design of code through a series of small transformations each of which preserve the behavior of the code being modified. Programmers learn to notice specific symptoms which Fowler called “code smells”. Each code smell has one or more countermeasures called “refactorings” that one can reference in a “Refactoring Catalog”. A refactoring defined specific changes that could be made to the code to eliminate the smell but left the behavior of the code unchanged.

The Antifragile Enterprise borrows the idea of smells and prescriptive “refactorings” to identify barriers to optionality and general solutions between consumer-supplier pairs within organizations. Where we differ from Fowler’s definition is that the refactorings we describe do change the behavior of the system being refactored, indeed that is the point—to incrementally improve behavior.

 

Improvement/Coaching Kata: Problem Solving and Coaching

In 2009, Mike Rother introduced Toyota Kata as the underlying culturally-entrenched mechanism used by everyone at Toyota to solve problems. This mechanism, applied over decades, gave rise to the “Lean” practices commonly associated with Toyota.

Toyota Kata describes two distinct practices—”Improvement Kata” used by everyone to perform single-variable experiments, and “Coaching Kata” used by each person’s mentor to teach and facilitate the Improvement Kata. Improvement Kata and Coaching Kata are valuable behaviors to subsume into any organization.

The Antifragile Enterprise narrows the scope and specializes both Improvement Kata and Coaching Kata to focus on improving optionality at consumer-supplier boundaries inside and outside of the organization. Implementing the details of organizational refactoring is not a routine procedure like code refactoring. Rather, each refactoring will pose unique challenges that Improvement Kata can help overcome.

 

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