Sunday, June 07, 2009

Black Swan - First Thoughts

The Black Swan by Nassim Nicholas Taleb has been on my reading list, and actually my book shelf, for quite some time. After reading an article a few days ago in the Wall Street Journal about how Taleb's hedge fund is betting on hyperinflation, I decided it would be the next book I read.*

The Black Swan explores "the impact of the highly improbable." Taleb argues that history and the significant events that have shaped our world have been black swans. No one could see that they were going to happen (except in hindsight) and they had a huge impact.

Thus far, I have only read the intro, but it brings up some interesting points and already I am finding takeaways. One suggestion made in the intro is that we should be less focused on trying to predict what will happen and more focused on trying to figure out how to react to what happens.

I have had some exposure to this line of thinking with business continuity planning. We've considered what effect certain "shocks" would have on our business. (i.e. loss of access to building, failed IT systems, etc.) Then we've come up with a plan to counter these effects. (Finding suppliers to rent equipment from until we can replace it, having an IT server stored offsite, etc.) Though at one point, I brainstormed possible shocks (fire, theft, flooding, snowed in), the more important thing was considering which operations would be affected by shocks.

This kind of thinking surfaced in a conversation that I had with someone a few months ago. (Warning: the following idea is only half-baked and may be offensive. Please try to consider the big picture of what I am saying!) He said that we have been putting so much energy into trying to stop global warming when there is still a good possibility that global warming is naturally caused (i.e. recurring cycle in the earth's atmosphere). While I absolutely think that we need to focus on sustainability and minimizing our impact on the earth, I also think that we need to consider what impact a "warmer earth" will have. We seem to be hedging our bets on global warming being entirely human caused, and putting our focus on stopping our impact. BUT, this is a risky bet. What if we can maintain complete carbon neutrality, but the earth still warms? Will we be prepared to deal with that? Maybe, just maybe, we should focus on sustainability separately than we are dealing with global warming. (Of course, that said, I am not a scientist. But I could organize and manage some scientists to look at dealing with global warming.)

Anyway, I'm looking forward to getting further into this book. I have about ten more that I want to read before school starts, in addition to the one I have to read for school. Oh, I'm going to miss my free time...

*I just finished reading Three Cups of Tea for a book club I'm in, and I really enjoyed it. It's amazing to see what the tenacity and perseverance of one man can accomplish. Of course, as a side note, I also can see how my business skills can bring a world of improvement to the not-for-profit sector, but we'll see how that plays out in the next few years.

1 comment:

mbt trainers said...

I have also a fan of this book.The book is fun and informative, and relatively easy to read. It has an important message about how the world works.