Thursday, January 10, 2013

Black Swan Events: Navigating The Uncertainty

Getty Images
Stunned traders on the New York Stock Exchange floor in 2008

Learning to Love Volatility:

In a world that constantly throws big, unexpected events our way, we must learn to benefit from disorder, writes Nassim Nicholas Taleb.

“Best practice” models, risk management, ROI metrics, SOX compliance, Governmental Policy and such are considered critical tools for success these days.  Why, because these modern-day practices attempt to micro-manage, minimize risk and maximize stability…based upon theories, statistics, and staunch controls.

In previous posts we've talked about the fact that it is far better to change when you want to...not when you are forced to (as in the wake of a tragedy).  

Unfortunately, as much as the best of the best would like to think…there really are no predictable absolutes.  We’ve seen that with the most recent economic, government and climatic tragedies. 
Stuff happens.  If we cannot truly and unequivocally measure the risks of potential blowups, what are we to do?

Per the author of the below WSJ Journal article (link), the answer is simple: We should try to create institutions that won't fall apart when we encounter “black swans” —  or that might even gain from these unexpected events.  Note:  "Black Swans" are large events that are both unexpected and highly consequential.  We never see black swans coming, but when they do arrive, they profoundly shape our world: Think of World War I, 9/11, the Internet, the rise of Google or natural disasters such as the 2004 Tsunami or Hurricane Katrina & Sandy.

The moral of the story here?  Fear & uncertainty can be paralyzing.  But remember, NOT changing to the world and business climate around you can be equally paralyzing.  Change is good.  Falling down is good too.  You need to fall & should expect to do so.  Just make certain you have band-aids in hand, and are willing to learn from that fall.  You’ll be better because of it.  This is how you will truly minimize future risk and maximize sustainable stability. 

The author, N. Nicholas Taleb, provides some cutting edge concepts on how best to deal with these “black swans”.  5 Rules that can help us to better navigate around & survive potentially unknown and fragile situations.  Interesting food for thought.

Consider this message for your own business…although every company likes to think of itself as pro-active, are you?  If you are more re-active, operationally speaking, is your company built to handle “black swan” events?  The “what if” kind that could severely re-shape your business?

At Reign Print Solutions, we are driven to help our clients continually evaluate operational and marketing print/communication that change can be scalable and deliberate, and not based upon fear of the unknown (which results in stagnation).


1 comment:

  1. Hey, very nice site. I came across this on Google, and I am stoked that I did. I will definitely be coming back here more often. Wish I could add to the conversation and bring a bit more to the table, but am just taking in as much info as I can at the moment. Thanks for sharing.
    karma commode chair rainbow 5

    Keep Posting:)