TRENDING
Dr. Manu Melwin Joy
WHEN SWAN IS BLACK Unexpected events bring in a change in your perceptions and plans. It needs special care and strategy to deal with the situation. Are you ready to take the plunge into a new world when the black swan arrives?
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ouldn’t it be delightful if the world were predictable, at least to a certain degree? It would definitely make the job of politicians in power and the chief executive officers at the helm much easier. But that’s not how it is; in fact, it never has been so. Yet when you look at how often those spearheading organizations make dumb remarks about the future, or the hollow promises of statesmen who seek and then gain power, you’re left doubting if these people live on the same planet as the rest of us. Consider certain past predictions of leaders belonging to large organizations. Ken Olson, who
founded the Digital Equipment Corporation, prophesied, “there is no rationale for any person to have a computer in his home”. According to Sir William Preece, the Chief Engineer of British Post Office, only Americans need the telephone. British can live without it since they have plenty of messenger boys. Robert Metcalfe, the founder of 3M Corporation, said that Internet would soon turn dramatically into a supernova that would collapse disastrously within a few years of its existence, in 1996. It was assumed once that all swans were white and that swans in black (or any other colour) could not exist. It was because until that time the only swans seen (in northern hemisphere) were white. The belief was shattered when a Black mutant
It was assumed once that all swans were white and that swans in black (or any other colour) could not exist. It was because until that time the only swans seen (in northern hemisphere) were white. The belief was shattered when a Black mutant Swan was observed in Australia. Hence the term ‘Black Swan’ came to be used for unpredictable or surprising events – the unknown
Swan was observed in Australia. Hence the term ‘Black Swan’ came to be used for unpredictable or surprising events – the unknown. A black swan is an event, positive or negative, that is considered unlikely yet causes enormous consequences. In his ground-breaking and visionary book, Nassim Nicholas Taleb demonstrates in a spirited way that black swan events explain almost everything about our world, and yet we—especially the so-called experts or authorities—are blind to them. All you have to do is to look back over the last one or two decades to see it – 9/11, recession, and the Arab spring are all black swan events. Since black swans are here to stay, the question now becomes: How do we counter or prepare ourselves against the black swans? There
Ken Olson
Sir William Preece
Robert Metcalfe
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TRENDING are three potential strategies for countering the black swan, which are as follows. USE THE POWER OF SIMPLICITY First, try to fight complexity with some form of simplicity. If you dissect any complex system, you can manage it better by breaking it down into smaller and easily manageable components. Let’s take the case of an airline. A passenger airliner is an extremely complex system and cannot afford to have even a trivial thing going wrong. If something like a hydraulic line failure happens, the plane crashes. It would constitute a black swan event for any airline firm. By employing something as simple as a ‘check list’, airlines have radically reduced accidents, realizing an unbelievably good safety record. Hospitals have been following the same path by adopting check lists. Hospitals are regularly affected by black swans in the form of lawsuits when a patient who checks in, gets an infection while staying in
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decline in deaths in hospitals across 18 nations by using check lists.
If something like a hydraulic line failure happens, the plane crashes. It would constitute a black swan event for any airline firm. By employing something as simple as a ‘check list’, airlines have radically reduced accidents, realizing an unbelievably good safety record
the hospital. Many hospitals across the world have drawn inspiration from the airline industry and the results have been remarkable – 50%
Individuals could be classified as unsophisticated creatures who hate change or complexity. Nevertheless, when you provide them with a simple solution (such as check lists), you can effectively bring down complexity to a manageable level. THINK HOLISTICALLY A second significant lesson in dealing with black swans is the necessity to think holistically. Most of us are incapable of connecting the dots and seeing the big picture. For example, over five decades ago, scientists had forecasted global climate change. Scientists in recent times have been discussing about another ice age in Europe because of variations in the density of ocean water, caused by the large quantity of freshwater being discharged into salt water due to the melting of glaciers. The difficult part for the rest of us is that we are unable to find the missing links and get a bird’s eye-view of the problem.
We function in a very myopic stage and tapered space. To make matters worse, if a holistic thinker cautions us about the next black swan, we neglect them as crazy. A recognisable mitigation strategy to black swans is to see the big picture and to take those who think holistically more seriously. For this to happen, we have to get out of our comfort zone. Individuals who think holistically move all over the place, doing a wide range of things just like a surgeon who learns ballet or a carpenter who plays jazz guitar. When we walk the extra mile, we start to see things in a very different way and astonishingly, we do a much better job of connecting the dots. EMBRACE COMPLEXITY A third and final lesson for managing black swans is to embrace complexity and master it in some way. Global connectivity is one of the enablers for tackling black swans. When something goes right or wrong, it is quickly
The difficult part for the rest of us is that we are unable to find the missing links and get a bird’s eye-view of the problem. We function in a very myopic stage and tapered space. To make matters worse, if a holistic thinker cautions us about the next black swan, we neglect them as crazy.”
conveyed through large social networks. Instead of evading these technologies, it is better to join the revolution and be part of it. For many organizations, this will require things such as facebook pages and crowdsourcing. This gigantic collaboration approach helps keep you ahead of, or at least within, the structure of black swan events. Taleb claims that our job is to transform black swans white. We do this by collecting adequate information to correctly predict them ahead of time. You must get outside your conventional space so as to see things more holistically. Or else, you will remain to be in a blindfolded by events that holistic thinkers are able to spot. And finally, don’t try to avoid these black swans – accept the fact that they are here to stay. You can grab unforeseen opportunities by embracing a strategy of generating your own black swans to change the way the game is played.
(The writer is Assistant Professor at School of Management Studies, CUSAT.)
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