"The Black Swan: The Impact of the Highly Improbable" Book Review by Stephen Parry

The Black Swan:  The Impact of the Highly Improbable (2008) by Nassim Nicholas Taleb is a fantastic book.  Its central theme is the inability or perhaps even a refusal to see randomness, especially when it departs from the norm in an extreme fashion.  This blindness has an enormous impact on society.  

I first read and reviewed the book about 10 years ago and felt in the current crisis that it was one that I would like to 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.

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. The realisation 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.

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.  

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 was, not as the analysts would have us believe. And for this, I thank Taleb and highly recommend The Black Swan.