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Black Swans: The Achilles Heel of Leadership

September 13, 2015
04- BLACK SWAN RISING Wouldn’t it be wonderful if the world were predictable–or at least somewhat predictable?

It would certainly make the job of top organizational leaders and politicians in power that much easier.

But that’s not how it is; it never has been in fact. Yet when you look at how often those running corporations made dumb comments about the future, or the empty promises of politicians who seek and then gain power, you’re left wondering if these individuals live on the same planet as the rest of us. Consider these past prognostications by top corporate leaders.

There is no reason for any individual to have a computer in his home. – Ken Olson, Founder, Digital Equipment Corporation

We will never make a 32-bit operating system.
– Bill Gates, Founder, Microsoft

I predict the Internet will soon go spectacularly supernova and in 1996 catastrophically collapse. – Robert Metcalfe, Founder, 3M Corporation

The Americans have need of the telephone, but we do not. We have plenty of messenger boys.
– Sir William Preece, Chief Engineer, British Post Office (1876)

What’s interesting is that these supposedly wise forecasts at the time, plus countless more, have all been made by men. It doesn’t say much about the insight of the male species.

Bush At the political level the public has learned to brush off, if not laugh at, the silly and vacuous promises made by politicians, including the typical annual government budgets. Unfortunately, the inability of political leaders to learn how to restrain themselves has cost many a national economy (or state or provincial economy) on a number of fronts: job loss, exit of companies for other jurisdictions, weak foreign investment, stunted technological and innovation growth, ballooning deficits, and the list goes on.

Consider Canada and its state of affairs. The country is in the midst of a federal election campaign which began in August, with the date set for October 19. This makes it the longest national election campaign in Canadian history since 1872. Conservative Prime Minister Stephen Harper, in power for almost a decade, went into the campaign in relatively good shape in the polls, though it was agreed by most political pundits that it would be a tough race among the three major parties.

Harper has had to contend with a number of known issues, ranging from crooked Conservative senators to a weak economy. However, what threw a wrench into the campaign was the Syrian refugee crisis.

Numerous examples abound of top leaders, in business and in government, being crippled because of their inability to adapt effectively to major developments. The huge numbers of Syrians exiting their country for safe havens in Europe, the UK, Canada and the U.S. has caught people off guard. Europe, in particular, is being crushed by the rapidly growing demand, with Greece, already economically destitute, doing the best it can to respond to Syrians arriving by dilapidated boats every day.

The Syrian refugee crisis is Stephen Harper’s Achilles Heel. The sudden surge in refugees seeking shelter in Europe, bolstered by the international media’s reporting, brought the crisis into main view in Canada and around the world. The drownings of two little Syrian boys and their mother served as a huge injection of compassion by Canadians, provincial premiers, municipal mayors and retired politicians of all stripes. Harper, in his traditional stubborn fashion, refused to bend, citing security concerns and Canada’s military contribution to fight ISIS (a feeble one at best, it should be noted, with a mere six CF-18 fighter jets deployed).

Taleb Although the Syrian refugee crisis has been ongoing for over four years, its recent surge in numbers combined with the international media’s coverage and the deaths of two little boys has brought it front and centre for politicians.

To borrow from Nassim Nicholas Taleb (pictured) this is tantamount to a Black Swan event for Prime Minister Harper. Harper, his aides and his party (make that Canada for that matter) didn’t see the crisis coming. But to add to Harper’s woes has been his intransigence to adapt and respond effectively to how Canada, one of the richest countries on our planet, can assist in accepting large numbers of Syrian refugees.

Taleb’s deep thinking about societal and economic effects resulting from major change events provides valuable leadership lessons for those leading organizations or nations. He uses the term Fragilista as someone who is fragile and non-adaptive. An “Antifragilista,” in contrast, is an individual who is able to quickly adjust to unpredictable events. Here are a few of Taleb’s thoughts:

You get pseudo-order when you seek order; you only get a measure of order and control when you embrace randomness.

Complex systems are full of interdependencies–hard to detect–and nonlinear responses.
Man-made complex systems tend to develop cascades and runaway chains of reactions that decrease, even eliminate, predictability and cause outsized events.

An annoying aspect of the Black Swan problem… is that the odds of rare events are simply not computable. We know a lot less about hundred-year floods than five-year floods.

Antifragility is not just the anti-dote to the Black Swan; understanding it makes us less intellectually fearful in accepting the role of these events as necessary for history, technology; knowledge, everything.

We didn’t get where we are today thanks to policy makers–but thanks to the appetite for risks and errors of a certain class of people we need to encourage, protect, and respect.

Take time to watch this fascinating video of Taleb speaking on the topic of black swans and the impact of the highly improbable.

Prime Minister Stephen Harper has reacted entirely to the Syrian refugee crisis. It has been only because of the outrage expressed by most Canadians against his government that Harper finally on September 12 announced a program to help address the crisis. It’s still inadequate but at least it’s a start. Harper, in Taleb’s words, is a Fragilista. He has not now nor in the past over nearly 10 years proven to be very adaptable as the head of a nation.

The essence of effective leadership, regardless of industrial sector or level within the organization, is adaptability to strange, weird or unpredictable events. Our world will not become more predictable in the future but even more unpredictable. Add to this is interdependency, driven by the globalization of trade, technology and climate change. Black Swan events will continue to arrive, thrusting new immediate demands for change on leaders.

Protect your Achilles Heel by strengthening your ability to adapt.

When you ask people, ‘What’s the opposite of fragile?,’ they tend to say robust, resilient, adaptable, solid, strong. That’s not it. The opposite of fragile is something that gains from disorder.

– Nassim Nicholas Taleb

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2 Comments leave one →
  1. September 14, 2015 4:57 am

    So, refugee crisis again?
    “The Syrian refugee crisis is Stephen Harper’s Achilles Heel.” Too simple and very wrong.
    This is just the beginning (or continuation ?) of modern civilization crisis and very well organized crisis.
    Just some fresh facts.
    1. German newspaper “Frankfurter Allgemeine Zeitung” (Sep 12, 2015):
    “…Saudi Arabia offers Germany 200 mosques – one for every 100 refugees who arrived last weekend…” (!)
    So, what is this?
    They have no money to help refugee in S. Arabia (so poor, poor country), but they have enough money to built 200 mosques just in Germany alone! Do you know how much does it cost to build church today?
    2. Reuters. Sep 13, 2105 :
    “Al Qaeda leader Ayman al-Zawahri called on young Muslim men in the United States and other Western countries to carry out attacks inside there and urged greater unity between militants.
    “I call on all Muslims who can harm the countries of the crusader coalition not to hesitate. We must now focus on moving the war to the heart of the homes and cities of the crusader West and specifically America.”
    What a “mensch”!
    “Bad” and “wrong” western world have to be tolerant and humane, accept and support refugees, because they are refugee. Isn’t that so?
    “Good” and “right” Muslim men “in the US and other Western countries”, where they reside and where thousands of others want to reside (why?), living among us, driving the same cars, watching the same TV, drinking the same water and eating the same bread, these “faithful” Muslim men should kill us without “hesitate”?
    So, were is tolerance limit and what does this statement obligate us to do?

    • September 16, 2015 12:04 am

      Thanks for taking the time, Alex, to share a number of insightful comments. The long-term solution is for these countries, where the repression of people occur, to build their economies and practice less totalitarian government. The absorptive capacity of Western countries to take in refugees and economic migrants has its limits. Western Europe is already there.

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