The Black Swan, the Cuban Missile Crisis, and Preparing for the Unexpected…


Yesterday, I presented my synopsis of the provocative book The Black Swan:  The Impact of the HIGHLY IMPROBABLE by Nassim Nicholas Taleb.  This was requested by a large, Dallas-based international company to launch their lunch & learn sessions for 2010.  The CEO had mentioned the book at a yearly planning meeting, and all of the folks wanted to know just what the book was about.

Well – here’s the book in a phrase:  “nobody knows anything!”

And one of the specific points in the book is that we get really good at facing down yesterday’s problems today while remaining amazingly ignorant about what the next problem might be.  Here’s a key quote:

What did people learn from the 9/11 episode?  Did they learn that some events, owing to their dynamics, stand largely outside the realm of the predictable?  No?  Did they learn the built-in defect of conventional wisdom?  No.  What did they figure out?  They learned precise rules for avoiding Islamic prototerrorists and tall buildings…  The story of the Maginot Line shows how we are conditioned to be specific.  The French, after the Great War, built a wall along the previous German invasion route to prevent reinvasion – Hitler just (almost) effortlessly went around it.  The French had been excellent students of history; they just learned with too much precision.  They were too practical and exceedingly focused for their own safety.
We do not spontaneously learn that we don’t learn that we don’t learn…

So, the book was on my mind when late last night I watched the 2000 movie Thirteen Days, the somewhat fictionalized/dramatized account of the Kennedy Administration in the midst of the Cuban Missile Crisis. It is a gripping story, even though we already know the outcome.  In the movie, President Kennedy refers back to the great Barbara Tuchman book, The Guns of August.  Here is the section from the movie (you can find the script here)

THE PRESIDENT
Last summer I read a book.  The Guns of August.  I wish every man on that blockade line had read that book.

The President moves over to the GLOBE by his desk, spins it, stopping in on Europe.

THE PRESIDENT (CONT’D)
World War One.  Thirteen million killed all because the militaries of both alliances were so highly attuned to each other’s movements and dispositions, afraid of letting the other guy have a theoretical advantage.  And your man in the field, his family at home, couldn’t even tell you the reasons why their lives were being sacrificed. Why couldn’t they stop it?

Can we?

The President’s fingers turn the globe.  It stops on North America.  Kenny and Bobby listen.

THE PRESIDENT (CONT’D)
And here we are, fifty years later.  One of their ships resists the inspection. We shoot out its rudder and board.  They shoot down our planes in response.  We bomb their anti-aircraft sites in response to that.  They attack Berlin. We invade Cuba.  They fire their missiles.  We fire ours.

Bobby Kennedy, in the movie, later adds this line:
You’d think nobody learned anything from World War Two.

In the movie, the President basically argues that we don’t really learn the lessons we should learn from the conflicts, the mistakes, the wars of yesterday.

This clearly transfers to the business world.  We try to fix today’s problems with yesterday’s solutions, and we assume that tomorrow’s problems will be like yesterday’s problems.  Then, when a Black Swan flies into our face, we are surprised, astounded, unprepared.  Taleb says this:  you won’t know what the next Black Swan will be, but you should know by now that there will be a new Black Swan coming at you soon.  When it arrives, don’t be surprised.  Simply say, “there’s our next Black Swan.”

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