Editor’s Note: The following article has been written for Compass, the quarterly magazine for the Association of Professional Futurists. When it is published later this Spring, it will be behind a paywall. As the author, I have been given permission to share it with my readers and followers. It is entitled, “The Spare Lung: Why Resilience Demands Strategic Inefficiency.”
The piece is one of the more important I have written as a futurist. I encourage you to give it a read. I sincerely believe it can help your company and organization survive in the long-term.
The Spare Lung: Why Resilience Demands Strategic Inefficiency
By Jack Uldrich
You have two kidneys and two lungs.
By the logic that governs most modern organizations – lean operations, optimized supply chains, quarterly performance metrics, etc. – this is an extraordinary waste of resources.
And yet here we are – the product of 3.8 billion years of merciless selection pressure –walking around with backup systems that most of us will never consciously use.
I’ve spent the better part of my career as a futurist helping organizations prepare for what’s coming, but I’ve come to believe something that may sound like heresy from someone in my profession: the most valuable thing I can offer is not a prediction. It’s a framework for thriving when the prediction turns out to be wrong.
This framework begins with a lesson nature learned long, long ago: the systems that endure across long time horizons look wasteful on short ones.
What follows is an argument for what I call strategic inefficiency – and why the future belongs not to those who can see what’s coming, but to those who’ve built the capacity to respond to what they never saw coming.
- The Prediction Trap
I’ll confess something. There is a gravitational pull in my profession toward forecasting. Clients desperately want to know what’s coming next and conference audiences tend to reward those speakers who offer the boldest predictions.
But the deepest insight of black swan thinking is not about any particular prediction. It is that the most consequential events are the ones nobody predicted. And this pattern is remarkably consistent.
In 1998, the global economy nearly collapsed because of a little-understood algorithm at Long-Term Capital Management. In 2001, an unforeseen terrorist attack reshaped world politics and economics overnight. The financial crisis of 2008 and ensuing global recession? It escaped the collective attention of virtually every known economist. And COVID-19 accelerated trends that were already quietly reshaping the world, but in a timeframe few anticipated.
Most of these scenarios were not on anyone’s five-year strategic plan. Each was, in its own way, a black swan – an event that lived outside the distribution of what experts considered possible.
This creates a paradox I think my fellow futurists need to sit with: if the events that matter most are the ones we cannot foresee, then the highest-value work we do may not be offering the scenario that turns out to be correct but, rather, helping organizations build the capacity that makes the specific scenario irrelevant.
Here’s a thought experiment I sometimes use with clients. Imagine four radically different disruptions arriving in the next decade: a severe solar storm that cripples the electrical grid and renders our electronic infrastructure useless, an AI breakthrough that displaces most knowledge work, a global financial collapse, or a geopolitical conflict that fragments the internet.
I then ask what would help in all four scenarios, and the answers converge fast: liquid reserves, diversified supply networks, empowered local decision-makers, strong community bonds, cross-trained people, and leaders practiced at making calls with incomplete information.
Ironically, none of the capabilities require the organization to know which future is coming. Instead, everyone requires that they make an investment before knowing the future.
I call this “the shift from prediction to preparation,” and it demands that we unlearn one of our profession’s most deeply held assumptions: that our job is to tell people what’s coming.
Instead, our job is to give our clients the language and legitimacy to defend investments that only pay off in futures they can’t yet see.
- The Wisdom of Waste
If preparation matters more than prediction, then we need a vocabulary for the kind of preparation that works. The term I want to propose is “strategic inefficiency” – the deliberate maintenance of spare capacity, redundancy, and slack which appears wasteful under normal conditions but becomes essential when conditions change.
Nature offers a master class in this way of thinking.
A wild grassland carries enormous genetic variation, most of which is “underperforming” at any given moment compared to a monoculture optimized for yield. But what is hidden in plain sight is that this variation offers a reservoir of potential responses. When a novel pathogen arrives, some variant is already adapted. The Irish Potato Famine (1845-1852) stands as the tragic human-scale example of this thinking: a nation fed by a single cultivar had optimized for yield and, sadly, eliminated the redundancy that might have spared millions of lives (reducing Ireland’s population by an estimated 20-25%).
The human body immune system works on the same principle. It continuously produces a vast diversity of antibodies, most of which will never encounter their matching pathogen. Spectacularly wasteful by any efficiency metric. But the tiny fraction that does match a novel invader can be the difference between a mild illness and death. The system works precisely because it does not try to predict which threat is coming, rather it maintains a broad, expensive, apparently pointless portfolio of responses.
The lesson is consistent across every scale of biological organization. Redundancy is not a waste. It is the price of continued existence. Put it in more stark terms: no one has ever regretted having a spare lung.
- Strategic Inefficiency in Practice
The business world offers its own case studies, though they are rarer because the dominant management culture actively selects against strategic inefficiency. One example of a company that bucked this tendency was Toyota.
After the massive 2011 earthquake and tsunami that struck Japan, the company quietly began maintaining strategic stockpiles of critical components – particularly semiconductors. This strategy broke with its decades-long policy of “just-in-time” thinking, but when the global chip shortage hit in 2020, Toyota weathered it far better than competitors who had optimized more aggressively. They had accepted a known, ongoing cost to hedge against an unknown, intermittent risk.
Warren Buffett’s Berkshire Hathaway has similarly been criticized for decades for holding what analysts call “excessive” cash – often tens of billions of dollars in Treasury bills earning modest returns. In any given quarter, this drags on performance. But when crises hit, Berkshire has the liquidity to act decisively while others scramble for survival. In this way, the company’s cash isn’t idle, it’s a purchased option on an unknown future.
What unites the two examples is a willingness to pay an ongoing, visible cost for a capability whose payoff is intermittent and unpredictable. Each organization looks slightly foolish in calm times, but it is that apparent foolishness that allows them to thrive when the storm arrives.
- The Upside of the Unknown
Here is something we need to unlearn about black swans: they are not all bad.
There is a natural tendency, when discussing uncertainty, to focus on catastrophe – the financial collapse, the pandemic, the geopolitical rupture. But black swans cut both ways. The internet, penicillin, mRNA vaccine technology, the smartphone were all largely unforeseen, massively consequential events that created enormous value for those positioned to act on them.
This matters because strategic inefficiency is not only a defensive posture. The same slack that allows an organization to absorb a negative shock also allows it to seize an unexpected opportunity. Berkshire’s cash reserves don’t merely protect the company during downturns – they allow the company’s management to buy aggressively when markets panic. Toyota’s supply chain flexibility doesn’t just prevent production stoppages – it allows faster pivots when demand shifts in unforeseen directions.
If resilience is presented solely as insurance against disaster, it will most likely lose the budget argument. But if resilience is understood as the capacity to capture positive disruptions as well as survive negative ones, the calculus changes entirely. The organization with slack, optionality, and adaptive speed is not merely safer – it is better positioned to seize windfalls that rigid competitors can’t even recognize until the moment has passed.
- Risk Is Not Uncertainty
I’d like to challenge an assumption that runs deep in corporate planning, in the insurance industry, and in much of the futures profession itself.
We treat the future as though it can be modeled probabilistically. We assign likelihoods to scenarios, price insurance premiums based on historical loss distributions, and stress-test portfolios against defined shocks. These are powerful tools. But they also share a critical limitation: they work only when we have reliable historical data.
True black swans, however, live in the domain of uncertainty, not risk. It is not a low-probability event on a known distribution; it is an event from outside the distribution entirely.
This distinction has profound consequences which we routinely ignore. The 2008 financial crisis was not a failure of risk models in their own terms. It was a failure of imagination – an inability to conceive that the models’ assumptions could be wrong in ways the models themselves could not detect. The same pattern recurs with every true black swan: the tools built for calculable risk break down precisely when they are needed most.
I like to think in what I call “cones of possibility” – the gray shades of probability rather than the black-and-white world of certainties. Probabilistic risk tools remain essential for the predictable portion of the future. But they must be complemented by the kind of structural resilience I’ve described – the strategic inefficiency, optionality, and adaptive capacity that do not depend on correctly modeling what is coming. The first protects against known risks. The second protects against the unknown ones. And any organization that relies only on the first is precisely as fragile as its models are incomplete.
- The Discipline of Not Knowing
Here’s an uncomfortable truth. Strategic inefficiency is easy to understand intellectually but it is extraordinarily difficult to put into practice. The obstacle is less about logic and more about psychology.
Human beings are spectacularly bad at sitting with genuine uncertainty. We compress it into false confidence – overconfident forecasts that feel better than admitting we don’t know.
We also retrofit tidy narratives after the fact, convincing ourselves that what happened was obvious all along. Often, after a black swan event, a consensus will form around the idea that the event was “obvious in retrospect.” After 9/11, for instance, countless experts claimed the intelligence communities should have seen it coming. After the 2008 crisis, analyst after analyst lined up to explain why the housing bubble was always destined to pop. And, after COVID, we heard endlessly that a pandemic was “predictable.”
This false “retrofitted clarity” reinforces the belief that the next disruption will also be foreseeable – that the future problem will be a failure of analysis rather than a feature of genuine uncertainty. The unfortunate result is that organizations over invest in better predictive tools such as artificial intelligence and under invest in the adaptive capacity that would serve them regardless of what might happen.
- Better Questions, Not Better Answers
There is a conventional expectation of leaders – and of futurists – that we provide answers, clarity, direction, and a confident vision of what lies ahead. But in the domain of genuine uncertainty, this expectation or burden of always having to have the answer(s) becomes a liability.
A leader who feels compelled to have answers will, in the absence of real knowledge, manufacture false ones: a confident forecast, a decisive-sounding strategy anchored to a single scenario, a reassuring narrative that mistakes conviction for competence. I have seen this happen in boardrooms more times than I can count.
The more honest and, ultimately, more useful posture is one that prizes better questions over premature answers. What assumptions are we making that we haven’t examined? Where are we most concentrated, most dependent on a single point of failure? What are we optimizing for, and what are we sacrificing to get it? And perhaps most importantly: what are we not seeing?
These questions do not predict black swans. They reveal the structural vulnerabilities that black swans exploit.
The organizations that weather black swans best are rarely the ones that saw them coming. They are the ones that have been asking the right questions long enough to build the reflexes, relationships, and structural flexibility that no forecast can substitute for.
- Building for What You Cannot SeeIf these ideas share a common thread, it is this: the systems that survive across long time horizons – biological, organizational, social – share a set of features that look like defects under the lens of short-term efficiency. Redundancy, slack, diversity, distributed authority, and the tolerance of apparent waste are not bugs in resilient systems. They are the architecture of resilience itself.
Nature figured this out a long time ago. The question – and it is a question, not an answer – is whether we are willing to learn from it before the next black swan forces the lesson upon us.
Jack Uldrich is a well-recognized global futurist, speaker, and the author of 14 books. He is a frequent speaker on technology, change management and leadership and has addressed hundreds of corporations, associations and not-for-profit organizations on five continents.
Jack is a former naval intelligence officer and Defense Department official. He served as the director of the Minnesota Office of Strategic and Long-Range Planning under Minnesota Governor Jesse Ventura. His books Business as Unusual: A Futurist’s Unorthodox, Unconventional, and Uncomfortable Guide to Doing Business and The RE Generation: How Today’s Agents of Change Are Creating a New Business Ethos have helped many navigate trends that emerged and converged during the past five years. His most recent book is A Smarter Farm: How AI is Revolutionizing the Future of Agriculture.
Uldrich also teaches a course on strategic foresight at the College of Saint Benedict and Saint John’s University and is the futurist-in-residence at the Steger Leadership Center in Ely, Minnesota.
