How prepared is your organisation for an existential threat?

Goodbyes are hard

There are three types of existential threats:

• Goodbye organisation

• Adios humanity

• Au revoir the planet.

Few of us truly contemplate a universe in which Earth no longer exists. Some of us are acutely aware that humanity is playing with fire. Yet my sense is that many leaders are giving too little attention — not only to the fate of humanity, but even to the survival of their own organisations.

Black swans flock

To assess risk when we talk about threats, we usually weigh two factors - impact and likelihood. Existential threats, by definition, sit at the extreme end of impact. This raises two questions:

• What are these threats?

• What is their likelihood?

Wargames

We can take a simple example. Imagine there is a war happening somewhere (not difficult). It may well challenge your supply chain at some point if it escalates or spreads. At the same time, your organisation is the target of a state-sponsored cyberattack.

• To what extent has your crisis management planning anticipated such a scenario?

• Do you have a self-healing supply chain in place?

• Will your crisis management plan work with no access to digital communications?

• Is there enough trust and loyalty woven into your culture to ensure your key people will do what it takes to keep your organisation above water?

• How long could your organisation hold its breath if this disruption left you unable to serve your market, or if that market ceased to exist altogether?

Having substantial reserves might help you ride out this challenging period. But what if this is not so much an extended seismic event and more a chaotic variant of business as usual, the ‘new abnormal’?

This is a simplistic scenario, the conflation of two macroenvironmental forces, geopolitics and technology.

There’s more to it

Now consider every combination of all the variants of the following macroenvironmental forces:

• Political

• Economic

• Social

• Technological

• Legal

• Environmental.

You can see that there are approximately an infinite number of scenarios. So developing a crisis management plan for each is infeasible.

Even though each of these infinite cases represents an existential risk, you might be tempted to choose the 5, 10 or 100 that you feel are most likely. The reality is that no one can reliably gauge likelihood in an environment that is, at best, complex, and increasingly chaotic.

So do you keep your fingers crossed, adopt an ostrich posture or hope that this becomes a headache for your successor? These are tempting options given most leaders are judged on the next quarter.

Everything-proof

But imagine if you could future-proof your organisation not only to be braced for a handful of existential organisational scenarios but for all those that may lead to the end of humanity or the evisceration of the planet. Such governance would certainly impress investors and analysts. In fact where this is the case, governance itself is less a set of processes and more an organisational asset that amplifies the value of all the other organisational assets.

Another day at the office

So how do you get to this level of risk management maturity?

The living systems in play today have a successful track record in not succumbing to existential threats. Their success, in all cases, go back millions of years. The fact that our ancestors looked quite different to us, eg. they could live underwater or moved around on all fours, attests to our adaptiveness as a species.

This is why I believe organisations need to become more akin to living systems, particularly in respect to environmental responsiveness (today) and adaptiveness (tomorrow).

Being a living organism does not guarantee complete protection from disasters, but it significantly increases our organisation’s chances of survival. Intelligence, both natural and artificial, is key.

Rethink leadership

Leaders are an emerging single point of failure. Having a more distributed approach to sensing, deciding and acting reduces this risk.

Portfolio management

Organisations can improve their chances of survival by evolving from a single business model to a portfolio of diverse models, so reducing the risk of a single point of failure.

In short, organisations can regenerate and so live forever if they take an innovative approach to cultivating a diverse set of planetary and human-friendly income streams.

This article also appeared in the Intelligent Organisation newsletter on LinkedIn.