TALEB’S BLACK SWAN EVENTS
Use to remind you that anything can happen and you can’t afford to be shocked into inaction by events.
Nassim Nicholas Taleb’s black swan theory is a metaphor that describes an event so unusual that before it happened it was utterly inconceivable.
FOUR CRITERIA THAT HAVE TO BE MET FOR AN INCIDENT TO BE CONSIDERED A BLACK SWAN EVENT:
The occurrence must be a stunning surprise/shock to the observers, for example the 9/11 attack on the Twin Towers or the Nice lorry outrage.
The event produces a major reaction, for example the attack on the Twin Towers led to the War on Terror.
After the event, people rationalise what has happened and come to believe that it was predicable if only they/others had read the signs or joined up all the myriad pieces of data that were available, for example just a few years prior to 9/11 the thriller writer Tom Clancy wrote a book about Japanese terrorists crashing a Jumbo jet into the Capitol Building.
It is the observers of the event who decide if it is a black swan event, i.e. 9/11 was not a black swan event for the terrorists but was for those who saw it unfold.
Taleb does not suggest that we attempt to predict black swan events. Rather we need to build robust systems that can withstand sudden unexpected events, and which are run by people who are capable of reacting quickly to the events.
WHAT TO DO
- How can you plan for the unknown and unknowable? With difficulty. So, instead, plan for flexibility and fleetness of foot. When a black swan event occurs, don’t be one of those shocked into immobility. Start to ask questions and identify the impact that the event may have on you and your organisation.
- Many organisations in the public sector have emergency planning teams as do large companies. If you don’t have an emergency team, pull a small group of people together to discuss the implication of the events upon the organisation. Use PEST and the UXB model (see Theories 67 and 68) as a means of identifying possible threats, opportunities and the way forward if one or more of them should materialise.
- Put in place ‘emergency measures’ to deal with any threats and work up ideas for how opportunities may be exploited. 3D printing was a potential black swan event when it was first announced. But because it didn’t threaten existing production methods immediately it didn’t have the necessary impact to describe it in such terms. But the impact is coming. What has your organisation done about it?
- When planning build flexibility into your plans. The purpose of a plan is to help you reach your objective. It is not meant to be a strait jacket. When events blow you off course reassess how you will achieve your objective. Be willing to take detours and back roads but always keep in mind your final destination and try to move towards it.
QUESTIONS TO ASK
- How flexible am I when it comes to thinking and planning?
- Do I expect things to go according to plan? If so, why?