Rethinking Risk, Resilience, and Adaptation in a Changing World

Crossing the River: Building Resilient Systems in an Uncertain World

If you’re building a company, allocating capital, designing systems, or simply trying to navigate the modern world, Brian Arthur’s message lands hard. Efficiency can be dangerous. Resilience has to be built. Redundancy is strength. Prediction has limits.

I keep returning to Arthur’s work because it captures something I’ve lived: that the same habits that make you efficient in calm seas can sink you when the tide turns. The map may no longer apply, but a compass — a clear set of values, structures, and adaptive tools — can still guide the way.

The Age of Uncertainty

Every so often, a thinker catches the undercurrent of an era. Brian Arthur — one of the founding voices of complexity economics — has done that. In a 2023 talk on The Illusion of Control, he argues that we’ve crossed from a world of manageable risk into one of fundamental uncertainty.

“We no longer know what arrangements we can fully trust without something going wrong,” he says. “We’ve lost the feeling of standing on solid ground.”

That line lingered with me. It describes not just the fragility of systems, but a psychological shift. The ground itself feels different.

Traditional economics was built to measure risk — probabilities, confidence intervals, optimisations. But it falters when the game board itself changes: pandemics, AI shocks, tariff wars, energy transitions. These aren’t “black swans.” They’re features of a new landscape.

What once looked like smart efficiency — just-in-time logistics, offshoring, cost compression — now looks like fragility. Boeing’s 737 Max crisis remains the perfect case study: optimisation made sense in theory, until it hollowed out safety margins in practice.

I’ve seen the same dynamic in business and investing. What starts as streamlining ends as brittleness. The same spreadsheets that made us feel in control can quietly remove our margin for error.

Resilience and Adaptation as Strategy

Arthur’s alternative isn’t to abandon strategy. It’s to design for resilience — to treat slack, optionality, and redundancy not as waste, but as the price of survival. The systems that endure are those that can bend without breaking.

He argues that adaptation never happens by default. It demands a repertoire of responses — the organisational equivalent of genetic diversity. Modular design. Diverse internal capabilities. Backup suppliers. Cross-functional teams. Long-term R&D.

In biology, the speed of evolution depends on the variety of traits available. The same is true in business. Companies that cultivate internal variety adapt faster. Those that over-optimise for one success pattern eventually get caught by their own design.

I’ve come to believe that this is the central art of modern leadership — not predicting what comes next, but preparing to respond well when you’re wrong.

Antifragility and Mixed Strategies

Arthur’s argument connects naturally with two others.

First, Taleb’s antifragility — the idea that some systems actually gain from disorder.

Second, Nate Silver’s mixed strategies — the insight that, under uncertainty, it’s rational to play several games at once.

For an investor, that might mean running a barbell portfolio: holding cash as the ultimate hedge, mixing deep value with asymmetric growth, owning both the tortoises and the hares. It might also mean using both momentum and fundamental lenses rather than committing to a single ideology.

For an operator, mixed strategies might mean spawning internal competitors, experimenting with new technologies that could disrupt your own core, or expanding into markets that look volatile today but vital tomorrow. It’s not contradiction — it’s design.

You’re not trying to be right all the time. You’re trying to stay alive long enough to adapt.

Conglomerates and Prepared Minds

This philosophy also explains the quiet resilience of conglomerates — Berkshire Hathaway, or the Japanese trading houses Buffett has bet on. They institutionalise variety. Each business is a gene in a larger organism: free to evolve, merge, or die without threatening the whole.

It’s the same logic that made mRNA vaccines possible. The “overnight” breakthroughs of 2020 were built on a decade of groundwork. Preparation looked expensive until the day it saved millions.

Countries are rediscovering this logic too. The U.S. is rebuilding semiconductor capacity. Germany is redesigning its energy backbone. China is balancing domestic and export engines. These aren’t nationalist moves; they’re adaptive ones. In a brittle world, reliability and control trump efficiency.

Tiny Experiments, Big Evolution

Arthur ends on a principle that should be carved into every boardroom wall: In uncertainty, central planning breaks down. The answer is many small experiments.

He points to China’s policy model — testing reforms in provinces before scaling nationally. It’s evolutionary logic in action: variation, feedback, and iteration. The same principle applies to investing, startups, or governance — run small bets, learn fast, scale what works.

The age of prediction is fading. The age of positioning is here. What matters now is not being right, but being ready.

Feeling the Stones

Arthur quotes a Chinese proverb: “Cross the river by feeling the stones.” That line captures the whole spirit of this shift.

It’s not about fear. It’s about responsiveness — sensing your way forward step by step, without pretending the path is fixed.

We’re not in permanent crisis. We’re in evolution. The old playbooks don’t fit, but new ones are forming in real time.

I’ve come to believe this: in a world of shifting ground, the advantage belongs to those who stay light, who run small experiments, and who treat resilience as an investment rather than a cost.

We don’t need certainty. We need readiness.

Notes

Based on W. Brian Arthur’s The Illusion of Control (2023) and The Nature of Technology (2009).

Influenced by Nassim Taleb’s Antifragile and Nate Silver’s The Signal and the Noise.