Tuesday, 27 November 2012

Antifragile Selling in a VUCA world of Black Swans , Schrodinger’s Cat and Talebantifragilistas.

“An expert is one who does the wrong things for the most sophisticated of reasons.”

Few Sales Directors and Sales executives  would claim  if asked to submit a forecast that they were experts at forecasting.

 We are all trying to learn how to sell in a VUCA world . (Volatile, Uncertain , Complex and Ambiguous.) That makes forecasting increasingly harder as well as important.

  Nassim Nicholas Taleb  author of  the bestseller ‘The Black Swan’  is a specialist in risk engineering. He says

“ We can’t predict very accurately.

We can’t forecast things.

There is a high degree of unpredictability”

Professor Taleb  describes Expert problems (in which the expert knows a lot but less than he thinks he does) often bring fragilities, and acceptance of ignorance the reverse.”.
 “There are secrets to our world,” he writes, “that only practice can reveal, and no opinion or analysis will ever capture in full.”

Some  things in business hate volatility some things love it.

His new book in called  Antifragile.

 The more I get to understand his philosophy I think it means we in Sales need to be Antifagilistas which sounds like a band of undercover  business guerrilla operatives out in the VUCA jungle.
We need to be brave and learn how to embrace the chaos.

Uncertainty -The Science bit ( a bit of  diversion)
 ( if Science is not your thing scroll down to 'back to Prof Taleb ' -I am not sure Science was my thing )

My first intellectual struggles with 'Unpredictability' came from wrestling with the challenges of undergraduate Chemistry in the 1980s.

 The theory responsible for my dis-ease, was from the thoughts of one Herr Werner  Heisenberg 1927  .The  ‘Uncertainty Principle’ followed by work by  Kennard and Weyl in 1928 .

 Probably today’s primary school children do this stuff in an afternoon now for all I know !

I found it tough going

Anyhow it went something like

The more precisely the position of some particle is determined, the less precisely its momentum  can be known, and vice versa. There was also a thing called Planck’s constant which I think I was a thick as ! :)

Then there was Schrodinger's Cat-  the famous thought experiment that illustrates the paradox of quantum mechanics when applied to everyday objects I wish this New Scientist video Click for video had been around when I was at College.

Scientists wrestle with Uncertainty then  but so do Philosophers let's get back to Prof. Taleb

Back to Prof Taleb

One of the leading experts in Unpredictability is Professor Taleb a risk engineer at New York University’s Polytechnic Institute. His best selling book on how unpredictable events influence our world was The Black Swan

Question : What’s the opposite of fragile?

One might answer robust, resilient, solid or strong.

Prof Nassim Nicholas Taleb argues these are inaccurate.

 The opposite of fragile , would be a mail package on which one would write “ Please mishandle” The opposite of something is not neutral or zero it is positive.

Some things benefit from being mishandled randomly knocked shocked and banged

 I know it when I ‘tap’ my computer in frustration !

Prof Taleb’s point is that emergencies or problems can often lead to a new idea.

For example :- The airline industry benefits from every mistake ever made on the planet. Any pilot who makes a mistake  on the planet today makes your next flight safer.

The banking industry is the opposite. Every mistake takes the banking system closer to a total collapse.

One system is ‘antifragile’ one while the other is ‘fragile’.

The banking system was built for order and not for the unpredictable. It was very fragile and people were hiding risk.

So which are you a
Fragilista ? Robustilista ? or Antifragilista ?
“No skin in the game” can lead to

One of the problems is that investors and bankers too often had no personal risk from their actions

If they wave all the upsides and none of the downsides the system becomes very fragile.

The banking system in 2012 paid itself large bonuses in the history of banking and that was from taxpayers. Bankers have hijacked the system and people think that’s capitalism.

Capitalism is about adventurers who get harmed by their mistakes, not people who harm others with their mistakes. The only way you can have a system that’s robust is when people are punished for their mistakes.

Maybe the professor is correct.
The FT wrote a supportive review The Guardian was rather  less taken with it and him.
For me Taleb is good at shaking up my brains.

Here are some statistics I gleaned from the really useful .City A.M. on line version  which m gets across Taleb’s ‘skin in the game point’

·         More than 80% of all workers in the Financial Services Industry expect a bonus for 2012. Almost half expect their bonus to be larger than last year’s.

·         The total cost of bailing out the British Banking system  was £1.3 trillion more than 10 times the budget of the National Health

·         Taxpayer paid out £45 billion shares in the Royal Bank of Scotland, £20 billion in Lloyds


If we in Sales can’t 'make our mind up about 'Taleb’s notions' then we’ll never get started'  or as  Doris Day sang     Click here for Delightful Doris

Perhaps Schrodinger’s cat is 'on a hot tin roof' in a state of extreme anxiousness.

Perhaps  for some Taleb’s Black Swan is cooked or

Perhaps more in Sales should read Taleb and join the Talebantifragilistas

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