Anti-Fragility and Asymmetry: Leadership's Best-Kept Secret
Nassim Nicholas Taleb's trifecta of fragility, robustness, and anti-fragility • Using asymmetries to be a better leader
Deep beneath the surface of Leadership Land, you’ll find the Secret Grottos. We’re paying a visit today to dig for Cerebrium (crystallized secrets).
The Cerebrium in this article comes from Nassim Nicholas Taleb, best-selling author of books such as Fooled by Randomness and The Black Swan: The Impact of the Highly Improbable. Several of our articles, including this one, are distillations of Nassim Taleb’s books.
We’re going to apply Nassim Taleb’s fragile—robust—anti-fragile framework from Antifragile: Things That Gain From Disorder to leadership, risk management, and avoiding career failure. We’ll explore the two secret asymmetries (fragility, anti-fragility) that can make or break leaders, along with the consequences of symmetry (robustness).
This post is a spiritual successor to:
Optional reading, but without them you might not understand all the references in this article.
Let’s start mining Cerebrium from Nassim Taleb’s books.
Fragility: More to Lose than to Gain
If something is easier to break than to build, then it’s fragile. Since fragile things have more to lose than to gain, you benefit more from avoiding failure than striving for success. This is the first secret asymmetry of leadership. It’s such a simple concept; why is it so easy to miss?
You instinctively understand fragility when you slow down to avoid dropping your teacup on your laptop, which would shatter the delicate porcelain of the former and fry the tightly packed circuitry of the latter. This is a simple example, where the consequences are immediate and obvious. Almost everyone (except young children) can detect the asymmetry and move cautiously to avoid failure.
In contrast, leadership is complex. After you make a decision, the consequences can take years to manifest. Cause and effect are located far apart and the Fog of Uncertainty obscures the connections between them. Our instincts are poorly suited to detect fragility in complex environments, leading most people to equate “avoiding failure” with “achieving success.” That is, they erroneously believe that avoiding failure and achieving success are symmetrical.
The classical example of fragility is Damocles, from whom we get the metaphorical Sword of Damocles:
Some examples of fragility:
Wipe-out risks and the anti-lottery (multiply × 0)
Any number multiplied by zero is zero. Reputations, marriages, fortunes, and careers can take decades to build by addition, and seconds to destroy by multiplying × 0.
Instead of using the abstract term “wipe-out risks” or “low-probability, high-impact risks,” think of them as playing the lottery. If you win the real lottery, you go on TV where some guy in a suit presents you with a giant novelty while you’re showered with confetti. If you “win” the wipe-out risk lottery, your reputation implodes. Your marriage collapses. Your assets are frozen in bankruptcy. Instead of taking a rocket ship to top of Executive Mountain, you’re drop-kicked unceremoniously into the Career Swamp.
Let’s call wipe-out (low-probability, high-impact) risks the “anti-lottery.” Because the prize for “winning” the anti-lottery is multiplying × 0. And instead of an oversized novelty check, your prize is humiliation and defeat. Or your credit card being denied while buying toilet paper at the grocery store. Or being told to clean out your desk, then taking the walk of shame past your former coworkers while being escorted by security guards.
Hypothetically, you could win both the lottery and anti-lottery with a single ticket. You’d have to be extraordinarily (un)lucky to win with a single ticket, so most people improve their odds by buying lots of tickets. If you want to avoid winning the anti-lottery, purchase as few tickets as possible over the course of your career.
Don’t play Russian Roulette, even if the risk of wipe-out is low each time you pull the trigger. If you play enough times, you’re mathematically guaranteed to “win” eventually.
Don’t unnecessarily antagonize people. Some of them will return decades later to serve cold revenge on you at the worst possible time.
Don’t juice short-term results at the expense of long-term viability. That’s the equivalent of hiding big red cartoon barrels of TNT in the basement. Inevitably, a spark will ignite the barrels and you (or the poor fool who succeeds you) will multiply ×0.
But who are we kidding? If you’re a leader, your duties may require you to buy daily tickets to the anti-lottery. You might have a legal obligation to do so because your shareholders, constituents, or clients demand it. In that case…we wish you the worst of luck in “winning” the anti-lottery.
Not all hope is lost. Keep reading until you reach the section on robustness. Better yet, try to maneuver your way into applying some of the principles from the section on anti-fragility.
Setbacks (subtract – x)
When something is fragile, setbacks are much bigger than progress. You add +inches to your success, but setbacks subtract –yards, sometimes –miles. However, setbacks won’t reset you to zero (those would be wipe-out risks). Examples:
Your company’s new product flopped with the target audience. Subtract –$4 million from R&D budget, –$7 million from the advertising and marketing budget, –8 months from the head start you had over the nearest competitor.
You had a bad day and yelled at a subordinate. Subtract –35 trust, –20 reputation.
An injury derails your marathon training. Subtract –4 weeks from available training time, –20% from your V̇O2 max.
You were eating healthier until your discipline slipped, and you ate a whole pizza (topped with a second pizza). Subtract –1 habit formation, –15 beach-bod progress, –50 motivation.
Because fragile things have more to lose than to gain, striving for success means you eke out diminishing returns. Meanwhile, focusing on avoiding failure helps minimize or eliminate large setbacks. The result: you tend to keep more of your incremental progress, leading to better results than the typical strategy of adding tiny gains in between subtracting big losses.
Team rupture (divide ÷ x, but it’s complicated)
The math is simple here:
Divorce = assets divided ÷ 2
Company dissolution = equity divided ÷ (number of shareholders)
Inheritance = net value of estate divided ÷ (family members in the will)
But fragile human egos tend to complicate things.
When “team mate” degenerates into “team hate,” the infighting causes lots of setbacks (subtract – x). When everyone agrees that the differences are irreconcilable and it’s best to part ways, it only takes a single person hiring a predatory attorney to compel everyone to hire their own (very expensive) attorneys. If a single person develops a “if I can’t have it, neither will you” mindset, they’ll make negotiations miserable for everyone with scorched-earth tactics.
Then come the accusations of unequal contribution to the marriage/company. And then a stranger makes a claim on the estate because – surprise! – grandpa had a secret mistress and illegitimate offspring. By the time the courtroom drama subsides and the attorneys go home with fat paychecks, everyone walks away with a lot less than what they should’ve gotten through simple division.
Did we mention that negotiations in the Straits of Conflicting Interest are fragile? Avoiding failure > achieving success when you’re negotiating, too!
Robustness: Resilience Against Loss
When something is robust, its potential for loss and gain are roughly balanced. When you’re dealing with a robust situation, striving for success and avoiding failure are equally important.
The classical example of robustness is the phoenix, a legendary bird that bursts into flames at the end of its life. Soon afterward, it is reborn from the ashes.
Insurance (addition + x after loss)
Every time you drive, you buy a ticket to the anti-lottery of car accidents. Every time you use a candle, space heater, or stove, you’re buying into the anti-lottery of house fires. Every time you get out of bed in the morning, you’re buying tickets to some kind of anti-lottery. Human bodies and material possessions are fragile. That’s why we have insurance.
When you experience a setback (subtract – x) or wipe-out (multiply × 0), insurance kicks in to mitigate the pain (addition + x). Depending on your insurance coverage and the severity of your loss, you might recoup a portion of your loss or all of it! Minus the insurance premiums you’ve been paying, plus some quality-of-life for distress, inconvenience, paperwork purgatory, etc.
Siloing (risk ÷ x)
There’s an old saying that neatly captures fragility and robustness in one cliché:
Don’t put all your eggs into one basket.
Sequestering your risks into different “silos” ensures that if one silo burns down (multiply × 0), the other silos are unaffected. Related methods for building robustness include:
Redundancies – people call you wasteful and inefficient when you have redundancies but don’t need them. After a calamity breaks a lot of fragile stuff, those same people call you reckless and myopic for not having redundancies when you needed them. If you’re going to be yelled at no matter what, then it’s better to have and not need than to need and not have!
Security through obscurity – if no one knows about your fragility, no one can attack it. For example, secrets are fragile (asymmetric) because they’re much easier to divulge than to keep. If a quantum AI manages to bypass our encryption protocols (thus fragilizing a technology that’s currently robust), then we would restore symmetry and robustness by resorting to steganography.
Diversification and optionality – your eggs will be fragile whether you put them in one basket or distribute them, so why limit yourself to eggs? Why not get another basket of pineapples? Why not get a third basket for pineapple-shaped hand grenades? There is incredible utility in having more choices…up to a point. It’s expensive to hide redundant basketfuls of eggs and explosive pineapples in secret bank vaults throughout the world. Stockpile too many options, and “diversification” degenerates into “diworsification.”
Win by not losing (addition + x in zero-sum games)
In the land of the blind, the one-eyed man is king.
Conventional wisdom says that if leaders become really good at their jobs, they’ll eventually be promoted. What if they’re promoted for not sucking at their jobs?
In Don’t be a Good Boss. Avoid Being a Bad One, we introduced the “Don’t Suck” principle and argued that focusing on avoiding harm will make you a better boss (on average) than someone who exclusively focuses on achieving success. Since leadership is built on human relationships (fragile), setbacks hurt more than advancements. The pain of a pay cut is much worse than the joy of an equivalent pay raise. Trust is especially fragile; in The Deadly Mistake of Confusing "Trust" and "Trustworthiness", we characterized trust as a glass jar that can be irreparably broken (multiply ×0) for heinous acts.
If you’re playing a zero-sum game, someone’s loss (–x) is your gain (+x). What if a leadership slot opens up, and you’re the last (wo)man standing after your competitors have subtracted and divided their way out of the candidate pool? You could be promoted not because you’re the right person for the job, but because you’re left. Similarly, you could succeed without lifting a finger by:
Increasing your market share while your competitors engage in a price war
Finding the love of your life by just being yourself while everyone else pretends to be better and less vulnerable than reality
Getting rich on autopilot (by paying yourself first) while everyone else loses money by chasing get-rich-quick schemes.
To win by not losing is essentially a form of attrition warfare. You just have to be more robust than your fragile competitors, and time will do the dirty work for you.
Anti-fragility: More to Gain than to Lose
At your next dinner party, ask the other guests for the antonym of “fragile.1” Most likely, they’ll respond with “resilient,” “robust,” or “tough.” But if fragility means more to lose than to gain, robustness (potential loss ≈ potential gain) isn’t the opposite. The true opposite would be something with more to gain than to lose.
In Antifragile: Things That Gain From Disorder, Nassim Taleb searched 21 languages (both ancient and modern) to find a word that encapsulates the opposite of fragility. Finding none, he coined the term “anti-fragility” to describe things that have more to gain than to lose. Antifragility is the second secret asymmetry of leadership. Antifragile people, organizations, and systems improve because of disasters, not in spite of them.
The fragile are crushed by chaos.
The robust withstand volatility.
The anti-fragile are reforged by the fires of adversity.
The classical example of anti-fragility was the Lernaean Hydra. This multi-headed serpent had insane regenerative powers, being able to regrow two heads for each head cut off.
Some examples of antifragility:
Betting against fragility
Most insurance policies shield you from fragility, making you robust. They can’t prevent disasters, but they’ll keep you from going bust. Can an insurance policy make you anti-fragile and actually enrich you during a crisis?
That’s exactly what Universa Investments and other “tail risk hedging” strategies do. Universa bleeds a steady trickle of money during calm years, then it collects massive gushers of cash during brief periods of market turmoil. In March 2020, when COVID-19 crashed markets around the world, Universa didn’t just protect their clients from losses; Universa made them richer.
To achieve this spectacular level of antifragility, Universa Investments uses mathematical sorcery2 that boils down to placing bets against fragile people, then waiting patiently for all hell to break loose. Fragile people do the opposite of Universa: they earn a steady trickle of money during calm years, then hemorrhage massive gushers of cash during brief periods of market turmoil.
From fragile turkey to anti-fragile vulture
Universa Investments becomes anti-fragile by betting against fragility. Similarly, you can become anti-fragile by seizing the advantage after fragility claims a nearby victim.
Remember the “Team rupture (divide ÷ x)” section from earlier? The attorneys subtracted heavily from the settlement pie before slicing it up and distributing the pieces. The attorneys are anti-fragile, gaining from turbulence and profiting from the fragility of marriages, organizations, and multi-generational estates. No wonder attorneys have such a bad reputation.
It’s not only attorneys who benefit from chaos and breakage. Other examples of vulture-like scavenging include:
Divide and conquer in politics and war
Shopping foreclosed real estate
Bottom-fishing during market crashes
Bidding at bankruptcy auctions and tax sales
Buying out competitors after they’ve been weakened by recession
You may find ambulance chasers, undertakers, and weapon manufacturers to be distasteful, but most people tolerate them in the same way you’d give a wide berth to a vulture feasting on carrion. Most societies only become intolerant when a scavenger becomes a predator – when it actively exploits its victim’s fragility to prosper from its downfall.
Your antifragility will always benefit you. However, it isn’t always ethical to be anti-fragile, especially if it fragilizes others. Nassim Taleb’s book Skin in the Game: Hidden Asymmetries in Daily Life makes the case that human societies cannot function properly when people are allowed to privatize their gains and hoard lottery tickets while socializing their losses and foisting their anti-lottery tickets on everyone else. The same principle applies to the organization you lead.
You can be anti-fragile, but should you be?
Our anti-fragile hearts and minds
When subjected to the zero-g weightlessness of space, astronauts lose bone density. To keep their bodies from becoming fragile, they must endure moderate stress by exercising regularly.
The absence of adversity makes us fragile, but the right amount of stress will improve us (anti-fragile):
A couch potato softens with too much screen-time and hardens with regular exercise.
You can sneak up on domestic animals, but wild animals are always alert. Regular people freeze when disaster strikes, but first responders spring into action.
Physical therapy accelerates recovery, causing us to heal faster from injuries or surgery than just sitting around and waiting.
Learning from failure
I have not failed; I’ve discovered 10,000 ways that don't work.
Adventures in Leadership Land focuses on avoiding career failure…but that doesn’t mean we want you to be failure-free. We want you to fail for the right reasons. Failure is feedback. Failure is data. You can’t navigate the hazards of Leadership Land unless you have good data.
Of course, how you obtain data is important. If you already know it’s a bad idea to sleep with your boss’s spouse and gloat about it on social media, you shouldn’t “collect more data.” If you didn’t already know that it’s a bad idea, you could collect the data by watching someone else do it and suffer the consequences (re-assignment to an abandoned shack in the middle of the Career Swamp surrounded by fire-breathing alligators).
But there are some areas of Leadership Land where foresight and Other People’s Mistakes can’t guide you. “Failing for the right reasons” means trailblazing in the frontier, taking risks where the potential upsides outweigh the potential downsides, and minimizing the damage when a high-quality decision produces a low-quality outcome.
As long as you 1) take steps to make yourself robust against fragility and 2) treat failure as data, you are antifragile. Failure is an excellent teacher, and you have chosen to be an excellent student. You are improving because of failure, not despite it.
Proto-geniuses playing the lottery
We began this article with wipe-out risks, anti-lotteries, and fragility. Let’s end the article with anti-risks, lotteries, and anti-fragility.
You’ll sometimes hear that the lottery is a tax on poor people who are bad at math3. Is it really as simple as math illiteracy + greed + stupidity = terribad financial decision-making?
To answer that, let’s go back to wipe-out risks. Anti-fragility is the opposite of fragility. Anti-lotteries are the opposite of lotteries. What’s the opposite of a wipe-out risk where you multiply × 0?
It’s a “risk” where you multiply × infinity. In our finite world, events that multiply × ∞ are mathematically impossible…but hitting the jackpot and earning more money than you could possibly grind out in several lifetimes certainly feels like you’re multiplying × ∞. In that regard, lottery players aren’t just buying excitement or wishful thinking. They are buying anti-fragility. With lottery ticket in hand, they have more to gain than to lose. The only problem is that they overpaid for the ticket.
Playing the lottery doesn’t seem so illogical when you reframe it in the context of anti-fragility, right? Who wouldn’t want the privilege of having greater upsides than downsides? Is there any way to acquire that kind of anti-fragility without overpaying for it?
Maybe. Here are some examples of lottery-like antifragility:
Scientists probing the secrets of the universe have more to gain than to lose. If they fail, they take home a comfortable paycheck and try something else later. If they succeed, they enjoy the thrill of discovery. If they succeed big, they win a Nobel prize, MacArthur Fellowship (“Genius Grant”), and celebrity status. Sounds like hitting the jackpot, doesn’t it?
Tech startups that grow faster than their cash bleed have two lottery tickets: 1) go public, or 2) be swallowed whole by a tech giant. Both pay handsomely.
Tinkerers and hackers working in their garages are anti-fragile. Success often leads to a patent – a literal monopoly on the fruits of their labor.
CEOs who hire management consultants have more to gain than to lose when trying something risky. Heads: they can claim all the credit plus a multimillion-dollar performance bonus. Tails: they can blame the consultant.
Writers, musicians, and actors you’ve never heard of are all waiting for their “big break,” whereupon they become best-selling authors, rockstars, and celebrities. Before their big break, everyone just calls them baristas.
These types of anti-fragilistas live in what Nassim Taleb called “the antechamber of hope.” They’re essentially playing a lottery where there’s a shadow of a sliver of a 0.001% chance they’ll multiply × ∞. They’re invisible nobodies until the day they hit the jackpot, after which they’ll be hailed as visionary geniuses.
We like to think of anti-fragilistas as “proto-geniuses.” Until they multiply × ∞ and fame strips away the obscurity that encrusts them, the proto-genius’ brilliance lies dormant and underappreciated4.
Never Let a Good Crisis Go to Waste
We quoted Andy Grove last week (“only the paranoid survive”). Here’s another great quote from him:
Bad companies are destroyed by crisis.
Good companies survive them.
Great companies are improved by them.
Andy Grove captured the essence of fragility—robustness—antifragility in three compact sentences. The same wisdom applies to reputations, marriages, fortunes, and careers. All these things are fragile by default, but you can structure them to be robust, possibly even anti-fragile. As a leader, it’s your responsibility to figure out how.
Start by looking for opportunities that others have missed. Remember that fragility and anti-fragility are asymmetric, and most people are blind to both asymmetries. In fragility, you have more to lose than to gain (avoiding failure > achieving success). In anti-fragility, you have more to gain than to lose (chasing failure causes success).
Upcoming articles in the series will build upon this one. Next week, we’ll continue exploring the Secret Grottos for Cerebrium by getting into epistemology, knowledge, and anti-knowledge. Mark your calendar for the January 3, 2025 release of Why Epistemology is Important in Leadership (And How to Apply It)! Once we have a better grasp of what we know vs. what we don’t know, we’ll apply epistemology to one article on artificial intelligence (AI), then move on to risk management and uncertainty.
This is post #2 in the Leadership Land Consistency Experiment, Phase I. We’re building better writing habits by publishing weekly between 12/20/24 – 2/28/25, instead of once every someday. Are we compromising quality for increased quantity? Was this post any better or worse than usual? Please share your comments below or reply directly if you’re reading the newsletter!
We do stuff like this, which is why we rarely get invited to dinner parties.
Universa’s founder, Mark Spitznagel, is a long-time friend and colleague of Nassim Nicholas Taleb. In Spitznagel’s book Safe Haven: Investing for Financial Storms, he reveals some of Universa’s secrets. Here’s one example of the counterintuitive magic math that they use.
There’s some truth in that, and we think most people who habitually play the lottery would be better off putting their money into prize-linked savings accounts instead. The regular “lottery drawings” (i.e. variable “interest payments”) offer the excitement of a true lottery, and you get free tickets just by saving money!
As baristas aspiring writers who often feel underappreciated, the whole spiel about “proto-geniuses” is totally not our fragile egos talking. Bias? There’s no bias here, what’re you talking about?