Setting the scene
Have you heard of antifragile organizations? They go beyond resilience and give us hope for the future, according to Janka Krings-Klebe, co-author of a new book, The Antifragile Organization: From Hierarchies to Ecosystems. Janka, your whole antifragile organization is a very strong concept, and I think it’s very important.
I’ve read your book, and I enjoyed it very much. I like your subtitle From Hierarchies to Ecosystems. That’s a very strong message. I’d be interested in knowing how you got started off on that path. I saw from, I think, LinkedIn that you were, what, a mechanical engineer?
JANKA
Yeah. Yeah. So my profession is even a bit stranger. I made a Ph.D. on mechanical engineering, so I’m really a mechanical engineer. And my doctor thesis was about mass production in automated assembly lines. So very engineering, but I also studied organizational development. And well, yeah, that makes you kind of a weird person for the engineers and also for the organizational developers.
JANE
And so how did you move towards this idea of antifragility?
From Zhang Ruimin and Haier
So, between doing my Ph.D. and writing that book are about 25 years. So I spent a lot of time at Bosch working there in different divisions and in, let’s say, different silos. And the last five years I spent at Bosch, I worked as a coach and also as a project lead for transformation issues. In the last two, three years, I was business coach for the Chinese entities and for Bosch Power Tools. The topic was how can the company evolve in something more agile, not that much hierarchical and bureaucracy-driven.
That was when I came in touch with the ideas from Zhang Ruimin from Haier and brought them back to Germany to power tools. Well, yeah, end of 2016, a colleague and I, we decided to raise our own company. We did a lot of training and also bootcamps for companies, and what I like to pronounce myself as being a personal trainer for transformation topics for teams and executives. And recently, we also started doing lectures on that.
And over this time, we found that people were asking, “Do you have a book on that, or do you have a literature list where we can dive deeper into those topics?” And yeah, of course, we found some articles and books in one silo and others in other silos, but there was so much missing. And finally, we decided to write this book because it was kind of we thought of we could bring all these silos, all these viewpoints together, and we need to have them together for transformation issues. And that was the initial start when we kicked off the book-
JANE
An how long-
JANKA
… and the rest was quite messy.
Beyond hierarchy and bureaucracy
How long did it take to write the book?
JANKA
Oh, we wrote it about one and a half year was about writing and rewriting and rewriting the rewritten parts. And so when we thought about finishing one chapter, we were thinking about, “Oh, this would be a great starting point.” And it took us a while and then we’re revisiting all the chapters and rewriting those and we took out a lot of buzzwords and we had kind of rule that each and every sentence had to add value to the topic.
That was really hard to stay on that. We also had the ambition to make it digestible. So, no academic style. No, let’s say when you dive deep into topics like business process management, we wanted the people to understand that even if they are not experts in process management. So it took a while. Yeah. After one and a half year, we were able to hand it over to our publisher.
JANE
It worked. It…
JANKA
Yeah, it worked.
JANE
Well, congratulations. That’s a big deal.
JANKA
And we got so much fascinating endorsements from people who read the manuscript before publishing. That was really outstanding, and we never had thought about getting such a wonderful feedback from so many people.
JANE
I saw the endorsements. They were really, really good. I would like to start with something you say at the very end of the book because I think it will intrigue people. And at the end, you talk about, I guess, you were at the Davos conference or you talk about the Davos Manifesto in 2020.
JANKA
Yep.
Antifragile creates shared, fair, inclusive, sustainable value
And the thing I find really interesting is that you talk about systems that are antifragile or companies that are antifragile develop shared, fair, inclusive, and sustainable value creation. That is a whole lot.
JANKA
Yeah. Yeah.
JANE
And I’m starting with that because I think that will intrigue people.
JANKA
Yeah, yeah, you are right. You really made a point, and this is what we found out while writing the book. And while diving deeper into the topic, what does it mean to be an antifragile organization? And we came up to that point that having an antifragile organization, you can offer people purpose, belonging, ownership, ownership of what they do of their work. So you treat them as adults, and people can build on their profession and what they like to do, they can decide whether they want to take a lead or not.
Ecosystems create a value stream
Also, from an organizational point of view, ecosystems act like a big network, a big network of capabilities that interact with each other, coming together, creating a value stream, providing value to a customer, getting fair shares out of that, and then dissolving and moving ahead. So ecosystems offer a sustainable way on one side because you don’t have to build up own resources internally.
You can breathe and grow with network without growing your own infrastructure. And on the other hand, by stuffing together a value stream with different capabilities, you need to have a fair share. So you need to have contracts where people agree what they deliver to this shared value creation and how they will profit from it. So it’s much more fair than what we have now in companies.
JANE
You say there’s a more equitable sharing of wealth, which is what you describe to some extent now, and you said that this is essential for maintaining social stability, civil rights, and freedom. I feel like there you’re getting into some social aspects of civilizations and how people live today when you talk about social stability.
JANKA
Yeah. It’s what we see in many countries is that rich people getting richer, poor people getting poorer. We are losing the middle ground. We have problems that people are able to get their livelihood, that they can make… that they can have a good life with working with earning money and raising maybe a family. And with this move towards having fair shares for work, having… also being treated as an adult, having ownership of the work, I think we can create a better balance.
JANE
Something I think a lot of people think of from the way you’re talking, and I think it’s important to make a distinction between a resilient company and an antifragile company. Could you talk about the difference?
Resilient or antifragile?
That’s really important because, currently, or since some years, resilience seemed to be the go-to buzzword in companies. You need to be… You need to achieve resilience with your company. But from my point of view, resilience is just bouncing back. So there comes a disruption from outside, and the company is stressed, and afterwards, it recovers to the former state.
The problem is in today’s dynamic and complex markets, this former state may be not what keeps you in the game. Markets are moving fast, so bouncing back to a former state may be outdated, so we need something different. When you think about nature ecosystems or even organisms, because an organization is a kind of organism. Organisms don’t bounce back. If you have a hard workout training for whatever and your muscles will ache after sport, after the workout, but the muscles not just bounce back, they become stronger.
They super compensate what means they get even stronger, as you would expect to just match the tension that was put on it. They become stronger each time you do your workout. This is what antifragile does. It becomes stronger under pressure because it learns, because it super compensates, it strengthen its abilities, its capabilities when it is stressed.
Nassim Taleb and fragility
Yeah, that’s… I see exactly what you mean. And I can think of some companies I’ve worked with. I’ve worked with a couple of companies that you give as examples. I worked with Bosch, but on a very small short scale, a series of workshops about their digital workplace way back, I don’t know when, a long time ago. And I also did quite a bit of work with Nokia, again, a long time ago.
I stopped consulting about three or four years ago. I consulted for about 20 years as an independent, and about three years ago, I stopped and decided to move in a slightly different direction, and I remember that I enjoyed both Bosch and Nokia very much, and when I read about, well, Nokia, in particular, has totally changed, and Bosch I have less contact with now, but if we take Nokia as an example, what happened?
JANKA
Yeah, they became what Nassim Taleb’s defines as they became fragile. So this is when you are successful as a company over a long time with a certain product, then you streamline all your processes, your structures, your governance to this most dominant business because your goal is to make production as efficient as it can be. So, you just take out everything that has no value for value creation of this main dominant business.
Weak signals and learning to unlearn
This means you unlearn organizational about how to get new ideas, how to get innovations moved inside the company because you are streamlined to this one product and because in the traditional organizations, the focus of management is mainly inside the company, getting production more efficient so you don’t have those sensors to the outside to early recognize those weak signals. If something like the iPhone happens, then it leaves you without no plan B.
JANE
And so you’re stuck where you are.
JANKA
You’re stuck where you are.
JANE
And you’re part of the old world, not part of the new world.
JANKA
Yeah.
The Importance of redundancy
I remember when I worked with Nokia, they were at the absolute top, and I loved working with them. Very interesting people, interesting things, and then things changed. I wanted to move into a couple of different specific things you talk about.
One that I think is very interesting is redundancy because redundancy is normally not good because it suggests that you are wasting your resources. If you have redundancy, you’re not using everything correctly. That’s the common understanding of redundancy. And that’s not what you’re saying about redundancy.
JANKA
Exactly. But I’m not the only one who says redundancy isn’t that bad. I think Daniels also had this as Slack Resources. He called it Slack Resources and many others. What is the point with redundancy is if you think of a company as a fine-tuned machine? Then, if you only have one product or one main product, you’re streamlining everything. We talked about that. And you put out redundancy because you think you won’t need it.
So, over time, you’re becoming, let’s say, a Formula One motorsport car. That’s fine on a racing course, something like that, but you won’t be able to drive in other environments. So if any unexpected changes happen or disruptions or upcoming tariffs or tsunamis or waves or whatever happens that you didn’t plan with and you don’t have any kind of redundancy, what you need to do is take people out of your productive part and do some emergency projects to recover and to compensate that.
It’s like when you have your annual budget, and you’re just planning and dedicating over 90% of this money to fixed programs or projects or departments, you can’t breathe. You just have no resources left to react, and this is why you need a certain kind of redundancy. So you are able to quickly act on upcoming opportunities or to act on emerging catastrophes or whatever.
JANE
That’s one thing you talk about. I liked a lot when you talk about how emergence is more important than prediction.
JANKA
Yeah.
JANE
That you need to be ready for the reasons you’ve been talking about and that we’re not able to predict what’s going to happen. We have to be ready for what emerges.
JANKA
Yeah. And therefore, you need redundant or slack resources, otherwise, you’re not able to act on that.
Next practices, not best practices
I have been long fascinated by C.K. Prahalad’s idea of next practices instead of best practices. And it’s a very powerful way of talking about what you’re talking about. The best practice is based on the past and so many, almost every company I’ve worked with over 20 years talked about, “Well, the best practices in our area are to do A, B, C, D,” and so they do A, B, C, D. But the idea of a next practice, that’s a different space to be in.
JANKA
I think you are spot on to make that connection. So I read a book from him and Gary Hamel-
JANE
Yes.
JANKA
… some time… some years ago or decades ago. So his ideas of next practices, they really resonate with what we describe in the antifragile organization because he understood early on that following these one best practice just locks you into the past, into what worked in a different context for someone else.
So he saw… Oh, and I remember right, he saw next practices about creating the future often by listening to signals from the margins, from users, from entirely new context. That is exactly what antifragile organizations do. They don’t plan linearly. They experiment, they learn, adapt, and allow strategy to emerge from interaction with the environment.
What happened to Boeing and to Bosch?
That’s what interested me about talking with you because the motto of my podcast will help shape the future before the future shapes us. And antifragility is a movement where you are helping shape the future before the future shapes us. I think it’s very, very compatible. I wanted to talk to you in more detail. I was wondering about asking you about some failures, a couple of failures, if you want to talk about them. I believe you talked about Boeing.
JANKA
Yeah.
JANE
And you talked about Bosch also.
JANKA
Yeah.
JANE
I don’t know if you want to discuss these publicly or not. I mean, you did in the book.
JANKA
Yeah. Of course. They are quite public, and I think Boeing is quite a public problem-
JANE
Oh, yeah.
JANKA
… because they took away this ownership and accountability from the people who were proud working at Boeing as engineers who felt ownership about every part they were adding to the planes by just moving from this engineering heavy management that understood what the people on the frontline were doing towards a disconnected management board that were just looking on the figures. So, the purpose disappeared. And coming to Bosch, the problem with Bosch is for decades they… Bosch is very strong in automotive.
JANE
Mm-hmm. Yes.
JANKA
But Bosch realized very early that just sticking on one industry might be problematic. So, that was a smart idea to say, “Well, let’s explore different industries.” And they did so again and again. But the problem is that the main business and the main profits come from automotive. So, the whole organizational setup is defined by automotive.
And the problem is when you start in solar energy or in consumer goods trying to manage your company with key indicators and with a governance that was once created for automotive business, mass production, highly engineered, then you will fail because you have the wrong setting, the wrong OS running your company and deciding what is profitable and what is not.
And we saw many companies struggling with those going into digital, let’s say, a business model like pay-per-use. Many car manufacturers went in car-sharing models, and they all failed because their internal processes, their internal governance, their controlling were never built to just track those microtransactions and make those processes profitable at all.
JANE
So the lesson is that you need to have processes that support the industry or support the activity of what you’re trying to do.
JANKA
Yeah, yeah.
Building the digital backbone
You talked a lot about what you call the digital backbone.
JANKA
Yeah, yeah.
JANE
And I found that interesting because I’ve worked in the digital workplace space for 20 years. Not to the extent that you talk about in your book, not that technical. My work was primarily people information, how it was shared, and so on and so on in very large organizations. I wanted to… I was struck by your language when you talked about… Hang on, yes. You talk about from digitization to digitalization to automation-
JANKA
[inaudible].
JANE
… and then to transformation. But if we just back up, could you talk a little bit about the difference between digitization and digitalization?
From digitization to digitalization
Yeah, of course. So the first step is digitization. So you have a sheet of paper, and as long as you do your business with lots of paperwork, you’re not digital.
JANE
Right.
JANKA
JANE
Agreed. Agreed.
JANKA
So the first step you’re usually starting with is digitizing what is on this paper.
JANE
Ah.
JANKA
So you scan it, create a PDF or a JPEG, and then you store it wherever. So this is the very first beginning, the very early steps. Make information accessible in a digital way. And that means next step would be you need the tools to work with those digital data. So this is a very, very beginning. The next step is digitalization. And there you go a step further because you get rid of all these media breaks between certain different systems within your company.
So you’re aiming for one process flow, one system that smoothly flows through the company to make those digital available information available for everyone who is part of the process. That is digitalization. So you can do much more with that. The next step, then, is including automation because not all processes, business processes need to be done by humans.
Automation, and AI for decision support
That’s something I want to talk to you about. That’s a very, almost disturbing message that you have in there. So talk to us a little bit about how you don’t need humans for all of the automation but how humans still have a place in the enterprise, I presume.
JANKA
Yeah. Okay. Let’s say I’m an employee, and I move from one place to another, so I need to inform my employer that I moved so my paycheck will reach me and my new home. That sounds easy.
JANE
That sounds like a good thing.
JANKA
Yeah, it’s reasonable. So, usually, what you need to do is you have HR that have your data. You have those who prepare the paychecks and maybe also your department and… you’re working in, so you have at least three to four or five different departments that need to have your new address.
And the usual way this works is you, at least in Germany, you tell the assistant of your department and she will call or send a mail to HR and they will put it into their local system, their local isolated system where they have your… also the photo with all your personal data. And then they are going to mail that to those guys who do the paychecks and on. So what a waste of time and resources.
JANE
Yes, a lot of people involved there.
JANKA
Yeah. And how would it be that you only have one access point, one single point of truth, one single point where you need to have to change your address, and every department or silo that needs this address for processing whatever can access that? And that is a kind of automation that you can do without harming anyone. So, everything that is repetitive, that needs to be done more again and again. For example, in mass production, when you have several parts, and you see you are running out of stock, then automation could look like that. The system automatically detects that the storage is going down.
And so the system is allowed to place an order to get these parts and or that the people in the workshop just press a button to place an order, and then this order is placed automatically. And I saw also companies here in Germany already have automated billing. When a bill is coming in, it is automatically analyzed. It is checked whether there was an offer, and if those are consistent, and then it is paid automatically, and that are those repetitive tasks that just take time when you do them manually, and you can easily automate these.
JANE
What about more… Yeah, I see exactly what you mean. Now, I think I forget what you talk about in the book regarding AI, true AI, where the technology is really bringing about changes, not just repetitive tasks, but seeing new opportunities.
European Union AI Act
Yeah, yeah. Regarding AI, we go with the recommendation from the European Union AI Act that-
JANE
Yes.
JANKA
… says AI shouldn’t decide. They should use as consultants or as a kind of agent, consulting agent, but not to decide. So decision, you can’t hold an AI accountable. You only can hold people accountable. So it’s up to the people to decide because they have to be kept accountable. But you can use AI, for example, for aggregating data, for doing kind of research. For example, comparing… automatically comparing different productivity data from different production lines.
If you have two or three or four similar production lines, you can just check which is performing better and why. You can use AI or machine learning for predictive maintenance to listen to the who sends us… listen to the machines to get early signs when maintenance is needed. And you can also analyze certain market opportunities, for example, to enable informed decision and less decisions made by gut feelings.
JANE
One thing you talked about you talk about how technology can reshape leadership. Leadership in what sense? I mean, the word leader has so many different meanings for people. And so I wonder how. Well, technology can bring more information to the attention of people in a leader position.
Information and better decisions
Yeah. So you can do better, you can make better decisions, and it could also free human resources for innovation and complex problem solving because you can get rid of a lot of reporting.
JANE
Do you think that companies are really going to use AI to enable people to do more creative things in organizations? Or will a lot of companies use AI to reduce the number of people working in the organization?
JANKA
I wouldn’t say either or. I would say it will be both because we have… if you are looking back to the 70s and 80s with computers entering the office space, you had much more assistance in the day before the computer age. Today, you still have assistance, but less. And they also have different tasks now. And I think that here it is similar. You can do lots of reporting. I would say you won’t even need AI for that.
It’s just aggregating some data. Of course, you can do it with AI or large language model, but most of these reportings managers do today are only relevant because of the control system you have and the reporting system you have. If you have a strong digital backbone and you have information available for all people that need to have them, you can just assess these data in real time. So no need for reporting anymore.
The joint action model
At the end of the book, you talk about the joint action model, and you have a very interesting diagram for it. I would say a very simple diagram for a very deep idea.
JANKA
Yeah. The idea came when we worked with… also with some startup accelerators during our Bosch time and after. You would never treat a startup in the same manner as a mature company because a startup follows different rules.
JANE
What do you mean?
JANKA
So all these regulations, all this governance, you don’t have that-
JANE
Ah.
JANKA
… for a startup.
JANE
Right.
JANKA
And that leads to this joint action model because when you just think of a startup, they try to find a product that resonates with the market, then they get a business model. And next is strategy because when the market resonates with your product, you need to produce it. And that is a point when you need to create a value stream, you need technology, processes, you need capabilities, you need resources.
And with all this, you create your business processes, you create a kind of structure, and then you need a different… a certain kind of rulings and procedures so that not each and everyone chooses an own way to do the travel expense part. So that you get… that the organization learns how to do stuff, and this is when all the governance and rulings.
And over time, when the company grows and gets more and more mature, these system of processes, business processes of capabilities, of governance, of strategy, that is always fine-tuned, and it is always interconnected. And it goes even so far that if you lack certain capabilities, let’s say, in management, you compensate that with more governance by more rulings and more procedures, ending in more reportings.
So this system is very unique for each company because it develops over time as a company gets more and more mature. And this is what is part of the joint action model because you have certain fields of actions, six. So you have the product and the business model. You have technology and competencies. You have strategy. You have business processes. And you also have structures and governance. And, of course, you have people, leadership, and culture, and all these parts interact with each other.
And when you just do minor changes like a facelift of your product, it will only affect the product and business model action fields. All other parts will stay the same. But if you have ever tried to start a new product that is completely different from the one you already have as a mature product in the market, then you will find out that you may need different processes. You may need different capabilities or competencies or technologies.
You may need different… a different kind of organizational structure for that. You may need a different kind of different set of governance rules, and there it begins. You need everything new. So the bigger the change, the more of these action fields are affected. The problem with these action fields is if you’re changing one of them, you will find that there are hurdles that appear suddenly that hold you back because the system is so fine-tuned and interacting in a quite complex way.
JANE
So you need to be aware of these interactions.
JANKA
Of course. And the problem is they are not all changeable in the same speed because, as you may know, changes in culture really take years.
JANE
This is something you use. I think when you advise organizations, you teach them this model.
An iterative learning journey
Yeah, yeah. We do it usually together with the learning journey. So I say if you are really going in for a transformation, so transformation is a really big change. This means you change the way you do your business, you change the way you interact, you collaborate, and you can’t do that just copy, paste the blueprint. This is a pass that is made by walking. You need to learn it. You need to unlearn the old stuff, and you need to learn how to collaborate in a new way. And so you start with an iterative learning journey.
So you start with maybe some teams, pilot teams where you just test something and you will find out that when those teams work together in a different way, may it be technology driven or because a customer demands something completely crazy like deliver this product in half the time or something like that. So hurdles will occur, barriers will occur, and then you need to really look for those barriers and remove them. And by removing them, you open the room for different kind of collaboration.
So you may find out that you need to adjust your business process, or that you need more variance or a kind of modular system in your business process, or that you need different kind of governance depending on the maturity of your products. And when you really go in for removing those barriers, over time, more and more barriers will occur, and you can solve those. This will lead you through the transformation.
JANE
It’s very interesting. When you talk about it that way, it seems doable because it becomes concrete and specific, which I think is very important because, otherwise, change and culture and all that, just they’re sort of maybe buzzwords, or they’re words that are so vague, they can mean anything. But when you get it down to specific things that you can change one by one, see how it goes, and you make it seem all very doable, all very possible.
I’d like to know I sort of have a final question for you, Janka. How do you see… It’s not an easy one, or maybe you’ve thought about this a lot already. How do you see the future for organizations today? Now, I know that’s different types of organizations, different futures, but in general, how do you see things moving?
Vision of future organizations as ecosystems
I think the complexity in the markets won’t go away. So we’re in this complexity, in this dynamic that will last. So if you’re a company and you want to stay relevant, you need to adapt. So, for me, the future is going in to ecosystem, to the ecosystem approach. So where you have this network of different capabilities or even a network of different companies working together, sharing resources, sharing capabilities to create this co-created or shared value creation because customers are demanding personalized products more and more.
So the only way out or the only solution that comes up when the market moves fast and the customer even move faster than the companies, you need to really stay close to your customer and staying close to your customer to sense those weak signals, those early signs of something changing. And then, you can react and experiment and build up a value stream and prepare a new product that matches with the market expectations. So I don’t think each and every company needs to become an own ecosystem, but at least you need to be able to work in one.
JANE
And you need to understand the, I would say, the mechanism or the philosophy. Maybe it’s more a question of the philosophy of an ecosystem.
JANKA
And you need to also be prepared to join the interactions to join the collaboration, especially from the technical side but also from the cultural side.
JANE
And what about competition? You still have competitors, don’t you? You can’t make an ecosystem with your competitors, or can you?
JANKA
That depends. Of course, you can if you find a certain problem that you cannot solve by your own, then it makes sense to even partner with your competitor. But what we see in the markets is that the life cycle of products is shrinking extremely. And the time you may profit from one product is getting shorter and shorter and shorter. Your reaction time to bring up a new product is also getting shorter, shorter, shorter.
So I think we can finally say goodbye to Porter’s Five Forces because these markets act in a different way. And I think having a market share doesn’t make you immune for competitors. We have so… a competition that is so high in the markets that competitors are changing very fast. It is no longer the main topic to just keep your share in the market. You need to stay relevant and close to the customer. That is what makes a difference.
Watch what’s happening outside
And so that’s what you would advise a company who asks you how they can stay relevant and vibrant over… in the future to watch what’s happening outside.
JANKA
Yeah, yeah, definitely. See there are signs in your market.
JANE
Yes.
JANKA
And in this way, really think outside the box, think outside your own company walls, your own company borders. Because sometimes collaboration across companies can lead to completely new products, completely new offerings to customers.
JANE
That’s interesting because, in my book, I don’t know if you’re familiar with my book, The Gig Mindset Advantage, which is not the gig economy but people in organizations who have a gig mindset in the way they think. One of the six criteria I use to define them based on my research is that they are very connected to the external world, and they are constantly coming back inside with information about the external world.
And that’s one reason, in many organizations, they’re not appreciated because they’re perceived as people who are stuck outside and not really doing what the company should be doing when, in fact, they’re probably doing what can ensure the company a better future.
JANKA
Yeah. And I think that is the main point. Staying relevant, how antifragile or how ecosystem you want to go that depends on how much you want to go in. Are you fully in in this topic, or do you just want to achieve at least a bit staying relevant for the next years?
JANE
Okay. Well, that’s a provocative question we can end with. Do you have any final word that you’d like to share?
A matter of organizational will
I would say when it comes to companies asking, is it achievable to become antifragile? Is it maybe even universally achievable? I would say yes and no. So, technically, a company can move in that direction, but it really depends on how far you’re willing to go, as I said. And a company like, for example, Haier has gone very far. They came from just manufacturing to platform orchestration and even to venture capitalists.
And so at Haier, borders are dissolving, the company borders are dissolving, and that creates value creation without owning every… control or controlling it. And that is what is antifragility at scale, but it’s a choice how far you want to go. So it is possible, but it is a matter of organizational will and how far you think your organization is prepared going this way or creating this path.
JANE
Good. That’s a great tone to end on. That puts the responsibility right back on the organization itself.
JANKA
Exactly.
JANE
Well, thank you so much, Janka. It’s been a very interesting conversation.
JANKA
You’re welcome. It was really fun to talk to you.

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