Thinking “fat” as a form of hormesis

I think, at a child’s birth, if a mother could ask a fairy godmother to endow it with the most useful gift, that gift should be curiosity. – Anna Eleanor Roosevelt

A fitting quote for a person whose life was so full and exemplary she was bestowed with 35 honorary degrees. 4 more than FDR according to the internet. But slow down with the curiosity Elle, we also know that curiosity killed the cat.

Just talk shop with an ER nurse or doctor and you know curiosity is often the active ingredient in achieving Darwin Award infamy. And if curiosity spares its quixotic owner’s life, it usually leaves a shame implant as a future reprimand. Like in American Pie. The movie, not the song. Jason Biggs won’t be thinking outside of any more boxes when it comes to baked goods.

So there can be too much of a good thing. Inverting, there can be too little of a bad thing. Or more directly, a bad thing in a low dose can be good. Just as prescribed burns can lower the risk of catastrophic forest fires and lifting weights can make you stronger by initially catabolizing muscle, complex systems like forest habitats and human bodies benefit from measured doses of stress. This is known as hormesis and follows a J-curve.

Credit: Rogue
Get 15 minutes of sunshine, you’re in the pleasant hot tub part of the curve. Fall asleep naked near the equator, you’re shedding skin like a cobra. Examples abound. Vaccines and flu shots. Adventure playgrounds instead of the sterile tort-resistant kids’ parks we have culturally settled on (h/t Avi for this great example).

What doesn’t kill you makes you stronger. Big deal, you’ve heard that your whole life and giving it a fancy name doesn’t make it any more revelatory. The concept is most familiar when the cause and effect are visibly linked. Hard but manageable sets of curls and you got a beach-ready gun show. Too much crossfit and rhabdo pays you a visit.

This gets more interesting when a complex outcome which cannot be tied back to a single cause is a candidate for hormetic remedy. A common example — by allowing companies to go bankrupt the whole economy is healthier as resources are directed towards promising projects as opposed to sustaining outmoded sectors. The complex and desired outcome is a healthy economy. The hormetic stressor is Chapter 11. Too much bankruptcy and you have a systemic collapse, just enough and the economy is sipping mojitos in the hot tub.

Injecting Hormesis into Your Company Strategy

Why bother?

This 1996 article (and edited by Cormac McCarthy!) made the case that traditional Alfred Marshall economics were not applicable to certain industries such as high tech knowledge businesses which were enjoying increasing returns (network effects are drivers that have drawn study only more recently).

Desired Outcome: Profitably navigating a rapidly changing landscape governed by rules of a new game.

A game that is riskier and less straightforward than selling widgets, but whose rewards are larger markets and outsize margins. “The ability to profit under increasing returns is only as good as the ability to see what’s coming in the next cycle and to position oneself for it“,

Hormetic Prescription: The company must favor flatter hierarchies and “commando units in small teams that report directly to the CEO…[they] need free rein. The company’s future survival depends on them”

Shouldn’t we do this in every business?

Not quite.

In an optimized, competitive industry with low relative complexity, this script would be inefficient just as you cannot afford a single wrong move when you play tic-tac-toe. To be clear, it remains that flat, less specialized organizations are likely inefficient in the high tech paradigm as well. The difference is the inefficiency is intentional and serves a function that is more highly prized in the “move fast and break things” industries. That function is learning.

The commando units on the ground can improvise but cost a premium. The company backers acknowledge that these costs, which look redundant or wasteful to an outsider, are part of the special sauce. Nature did not screw up when it gave you the second kidney even though its maintenance is not free.

Show me the onramp to agility

This is what Venkat Rao refers to as “fat thinking” and stands in direct contrast to top-down Six Sigma optimization principles. Fat thinking is a stew of hormesis, anti-fragility, redundancy, adaptability, and optionality. In this outstanding essay, you’ll learn:

  • Why leak-before-failure design is “intentionally and selectively underengineered to promote learning. The learning doesn’t show up in a spreadsheet though so the lack of optimization looks wasteful.”
  • Why it is positive-sum at a macro level and possibly suboptimal at the micro level depending on competitive dynamics.
    • Why a company needs to grow fast and wide to reap the value of this design
    • Why the “value of bolted on attempts don’t accrue to the owner”

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