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"The Black Swan" Book Review by Stephen Parry

Posted by Stephen Parry on Dec 13, 2012 12:28:33 PM
The central theme of The Black Swan (2008) by Nassim Nicholas Taleb is the failure -- the refusal, to see randomness, especially extreme departures from the norm and the enormous impact this has on society.  

I first reviewed the book about 10 years ago and felt in the current crisis that it was one that I would like to revisit, reflect on once again.

Taleb defines a Black Swan Event as having three components: rarity, extreme impact and retrospective (though not prospective) predictability (xxii).  When applying this theory to my own tenure as a business architect and manager, I was quite disturbed.The Black Swan Book
 
When I first read The Black Swan, the more I read, the more depressed I became, not with the book but with the tearing down of the illusions I had built up over many years about managing businesses and designing organisations. Realising that all the MBA models for this and that actually feed our futile desire to get control of the future, to create certainty and the illusion that we know what we are doing, was profoundly disquieting.
 
It's scary finding out the steering wheel is not connected to anything.

This book underscores the fact that it is better to deal with reality and be prepared as best we can for big changes, ones traditional analysis tells us are highly improbable. Taleb shows that the highly improbable is anything but and he deconstructs -- actually he rips apart, very logically, the predictive probabilities associated with the ubiquitous bell curve in a manner a non-statistician can understand.  

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He provides us with a language to use against the analysts, who are using highly-sophisticated bell curve models in an effort to make business decisions. This predictive activity can now be revealed for what it is. It is nothing more than corporate tarot card reading.

For me, finding out that the steering wheel I had been holding onto to steer organisations was not connected to anything was a revelation and forced me to see the world as it really is, not as the analysts would have us believe.

I highly recommend this thought-provoking book.

Topics: Adaptive Business, Operating Strategy, Workforce Strategy, Organisational Design, Service Delivery

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