Antifragile by Design: How Megatrends Turn Crises Into Innovation Fuel

The first months of 2020 felt like watching a slow-motion car crash in fast-forward. One by one, countries shut down. Supply chains snapped. In Germany alone, one in ten employees was on short-time work by the end of spring. And yet — factories pivoted to build ventilators, fashion labels started producing face masks, digital businesses reported their best quarters ever. The fault line between those who adapted and those who hadn't had been forming for years. COVID-19 just made it impossible to ignore.

The COVID-19 pandemic and the responses to it have plunged the global economy into what is likely to be the biggest recession since the Second World War. But not all companies are equally affected. We are by no means as powerless as it often seems.
The degree of digitalisation and innovation capacity is probably the one indicator that shows how well companies are weathering the crisis – and digitalisation has been a megatrend for some time now. The currently intensifying megatrends of relocalisation and neo-ecology have also been occupying the economy for some time.
So would a more sustainable corporate strategy have been better suited to the crisis? And what specific lessons can we learn from this today? Our strategist Tim spoke about this at the IHK's digital 'Sustainability Day'.

In the first half of 2020, the Covid-19 pandemic seemed like a force of nature that we were powerless to resist. Over seven million people worldwide had already been infected with the coronavirus (as of June 2020) – on a single day in April, 9,800 people died from it. And the pandemic was far from reaching its peak, especially in the Global South.
But the health crisis was also being followed by an economic one. The global economy was sliding into one of the biggest recessions we had ever experienced. According to current figures, 40 million people had lost their jobs in the United States alone. In Germany, one in ten employees was on short-time work.

Covid-19, an unstoppable force of nature? Not necessarily.

At the same time, the economic crisis did not seem to be affecting all entrepreneurs and companies equally. Even in the hardest-hit industries, there were always individuals who managed to adapt to the crisis. Just think of Fynn Kliemann, who quickly transformed his fashion label into Europe's largest producer of face masks. Or industrial companies, from heating to car manufacturers, who converted their factories to produce ventilators – and thus preserved jobs.

These examples were encouraging. They showed how companies were creatively addressing their (economic) challenges. The ability to innovate seemed to be an important key to transforming companies from losers into winners of the crisis.

Digitalisation

Another trend was that companies that had focused on digitalisation came through the crisis better.

While restaurants had to close, online delivery services boomed. While brick-and-mortar retail was virtually paralysed, Amazon posted record sales. Companies that had already invested in a digital sub-sector were able to adapt more quickly and expand these areas. On the other hand, companies that first had to reinvent themselves digitally had and continue to have a harder time.
Even companies that had used digital channels solely for customer relationship management did not lose this important connection during the crisis. Not to mention those companies that base their business models entirely on digital products or services: they were significantly less dependent on global supply chains – and thus significantly less directly affected by the crisis.

Among the participants in our session at the IHK Sustainability Day 2020, digitalisation topics, innovation and agility were also among the most frequently mentioned factors that helped during the crisis. When asked what had helped the participants' companies through the crisis, no answer came up as often as 'digitalisation' and various types of 'innovation'. Only personal factors, such as a strong network or a thick financial cushion, were mentioned with similar frequency.

The crisis as an amplifier of megatrends

The fact that digitalisation is an issue that companies need to address is by no means new. In fact, digitalisation has probably topped the trend reports of the last ten years.
Futurologists such as Matthias Horx also note that digitalisation is not the only megatrend that has gained importance as a result of the crisis:

Re-localisation
The crisis has hit companies that are heavily dependent on global just-in-time supply chains particularly hard. Trust and personal contacts with suppliers and customers, on the other hand, have helped to cushion the blow in some places. Will companies remember this after the crisis? Will economic processes become more transparent and local again? The appropriate trend is called re-localisation, and it is not exactly new.

Neo-ecology and security
The global crisis has also shaken many people's sense of security. While our high-tech society often seemed invulnerable, people and companies have now been painfully reminded of their vulnerability. Will this awareness also influence how we deal with other crises such as climate change? In any case, this changed perspective supports a megatrend that has been around for some time: neo-ecology.

Connectivity and new work
The fact that so many people have been able to gain experience with working from home and digital meetings over the past few weeks – both good and bad – will also have consequences in the future. Now that we have seen what is possible remotely, some may wonder whether it is really worth flying from Berlin to Munich for a meeting – or whether a video conference would suffice.

Home office solutions and flexible working hours are suddenly no longer a luxury reserved for the digital avant-garde. Rather, they are becoming the new standard and have the potential to fundamentally revolutionise our work culture. However, the trends in this area have also been around since at least 2010. They are called connectivity and new work.

So perhaps we couldn't necessarily have prepared for the crisis – we would have had to foresee it. However, the measures that helped companies during the crisis were by no means new.
Rather, the crisis shows us that looking beyond our own horizons – looking at current social and economic developments – can help us to cope better in and after such an extreme situation.

So what can we learn from this?

The natural impulse after such a crisis is to protect ourselves against future crises. To become robust or even resilient. However, in our view, this no longer seems to be a viable option. After all, it was not the companies that were particularly stable and therefore sluggish that came through the crisis better, but those that were agile and therefore accustomed to rapid change.

Financial mathematician and philosophical essayist Nassim Nicholas Taleb coined the term antifragility — the property of systems that don't just survive shocks but actually grow stronger because of them. An antifragile system is one that benefits from disorder: stressors, volatility, and unexpected change make it better, not worse. This is fundamentally different from resilience (which merely resists damage) and robustness (which doesn't break easily). A good metaphor is the Hydra from Greek mythology: cut off one of its heads in battle, and two grow back in its place. The Hydra doesn't rely on good armour. It relies on the ability to become better through threats.

Companies can also become antifragile. In other words, they can not only be protected against crises, but even benefit from them.

Antifragility for companies

The current crisis, but also past crises, show time and again that innovation is key to antifragility in companies. As shown above, companies that are used to constantly questioning and reinventing themselves have an advantage when familiar business models and processes suddenly no longer work. Companies must find a way to respond flexibly to external change. Such a learned and reoriented strategy helps with upcoming crises as well as everyday challenges.

It is no coincidence that, in addition to companies that were able to adapt quickly, digital companies in particular have come through the crisis comparatively well. Rather, it was often young, agile – i.e. adaptable – companies that had already recognised and implemented the megatrend of digitalisation beforehand.

Companies that strengthen their innovative capabilities are better able to respond to trends early on. This is an important resilience factor in both large and small crises – but also a factor for antifragility outside of crises.
Constantly questioning one's own services, business model or product helps to stay ahead of competitors and thus be better prepared for competition. Antifragile companies continuously try to make themselves redundant through innovation with some of their resources before others do.

In this way, antifragile companies gain a head start over competitors and rivals in quiet times and secure alternative options in crises that can determine their continued existence or demise.

It all comes down to the right mindset.

An innovation-oriented mindset does not necessarily threaten or fundamentally challenge existing processes within a company. Rather, innovation can radiate throughout the rest of a company as a complement and inspiration.

Innovative ability is therefore by no means something that companies either have or do not have. Creativity in relation to business processes, products and entire companies can be learned and pursued in addition to day-to-day business. It is methodology, knowledge, practice and experience.
It is no coincidence that design thinking has been gaining ground in more and more industries for years and that agile (i.e. rapidly evolving) processes have become the new gold standard for many companies. The best results come from teams with genuinely diverse perspectives and the discipline to think beyond their own domain.

The impact of such a methodology can be seen, for example, in my coaching project for a publishing house. Here, a team of publishing employees not only became co-creators of the media group's future digital strategy with our support. Rather, concrete methods and tools for agile working were immediately carried over into the departments, where they laid the foundation for future innovations.

Read next:

• Why I'll never get tired of facilitating innovation — what cross-functional teams can ship in 48 hours
• New chapter, same passion — how antifragile thinking shaped my move into leadership
• A European approach to design vs. enshittification — building resilience into a company culture