One of my favorite authors and thinkers is Nassim Nicholas Taleb. My first exposure was his 2007 book, Black Swan. According to Taleb, COVID-19 is an example of a white swan event, as it wasn’t in the realm of unrecognized exposures. I then read Fooled by Randomness (2001) and my favorite of the three, Anti-Fragile (2012). Spurred on by recent events, I went digging into Taleb’s work again. His website is a wealth of wisdom https://www.fooledbyrandomness.com/
I will share with you some insight from Taleb that has helped me think through these times, and perhaps it can help you too.
A black swan event is something you couldn’t have seen coming. Such as 9/11, the internet, or a Spanish Armada coming to your New World. Black swan events are way outside a standard deviation. They are in the realm of science fiction. Taleb calls this the unknown knowns. Our most significant risk lies where we don’t know… what we don’t know.
Most risks and claims are within a standard deviation. They are the employment claim made, the breach of security, the manipulation of the books, which was a known type of risk. A process like underwriting is good at accounting for, and underwriting known risks. However, inherent underwriting limitations hinder the ability to insure black swan events.
One way to make ourselves anti-fragile is to use contracts. Something Taleb utilized during his option trading days to great effect. The challenge from both the point of the consumer and the underwriter is how do they contract around risks they are unaware of. What Taleb Also calls the silent risk.
So, we can and should insure and otherwise protect ourselves from these swans. Both the known and unknown. There’s the insuring of risks we know about, understanding they could be white swan events. Then there are contractual tools like personal umbrella policies, reinsurance, CDs, Treasury Bonds, and hedged investments (Taleb’s hedge fund went up over 1,000% during the first two months of the Coronavirus outbreak!), for the black swan events. Along with the choices we make, like having six months of cash, living within our means, multiple sources of income, a Plan B, emergency supplies and protocols, etc.
We don’t want just to be resilient and withstand these swans. We want to grow stronger from them, the way nature does through evolution, and make ourselves anti-fragile in the process. Anti-fragility also comes from continuous growth, bolstered by creativity, and a healthy dose of skepticism.
Taleb believes systems that evolve with the times have the resilience needed to withstand black swan events. The US will survive Coronavirus, like it did 9/11. And, as after 9/11, things will never be the same, because that’s what change does. However, a person or organization that has not embraced change and evolved is more exposed to these events. It Taleb’s words, they have made themselves Fragile.
Taleb is continually attacking academia because they don’t have “skin in the game.” He loves attacking, provoking, and debating experts too. It feels to me like a sport for him. I love it when he says, “Don’t tell me your economic forecast, show me your investment portfolio.”
He believes we should not trust academia or experts (including the media in general) for several reasons, including the fact they stay in a very narrow lane, limiting their ability to “connect the dots.” They also don’t suffer significant consequences when their advice and belief system causes harm. Bottom line – only trust those experts with integrity who are walking their talk. He believes that if we don’t have skin in the game, we’re not forced to evolve. We’re not forced to learn from our mistakes. Skin in the game is evolution.
Metrics can always be gamed. Courage is the only virtue that can’t be faked or gamed. We will see who is willing to be courageous on the world stage, in our companies, and at home.
Taleb often talks about “fat tails” which is the disproportionate role of a minority event in determining the total properties. In other words, the fact the butterfly flapped its wings caused a hurricane a week later. The world ignored the fat tail nature of the Coronavirus outbreak in China. Our government told us not to worry about it. (Then Senator Richard Burr from N.C. sold 1.5 mm of his stock, knowing a collapse was imminent …bastard. There is a place in hell reserved for him.)
Taleb reminds us more people were killed falling from ladders than by the Ebola outbreak. However, someone dying from using a ladder doesn’t create a “fat tail” but an outbreak of Ebola, like Coronavirus, can be disastrous. The point is not to ignore either exposure but to put them in the proper context.
People underestimate tails via underestimation of randomness and overconfidence, which blows up the tails. (I’ll stay away from the politics on this one.)
There are two ways to deal with uncertainty: one, try to better understand the world in a way that allows you to formulate precise forecasts, or two, try to avoid being harmed by what you do not understand. He believes we have accomplished little through the first approach. He believes focusing on the second approach makes us anti-fragile because we deal with exposure to something rather than focus on that something. Bottom line: do a good job of removing fragility through insurance and other contracts.
Taleb considers the topic of uncertainty as the mother of all disciplines. The frailty of human knowledge is that we don’t know what we don’t know. One reason why a healthy dose of skepticism helps you become antifragile. “Skepticism is avoiding to be a sucker.” The streetwise risk manager has a well-tuned BS meter.
There’s my Taleb rant. What will you do to become Anti-fragile?
I’ve got a confession to make – I’ve been floating lately! Months ago one of the Vistage presenters, Dan Miller, talked about the psychological and wellness benefits of floating. Having already been intrigued by it, his conversation was a tipping point for me to try it. I invited my wife to join me.
What an amazing experience. I already meditate but this added a physical component to it I had never experience before. Essentially you get into a large coffin shape structure that has enough salt in it to make you float (and kill anything else that might be in the water so no worries about hygiene). When you close the top of the float tank it cuts out any light or sound and only leaves ventilation behind. The only thing you can hear is your own breath and mind at work. I’m 6’3” and there was plenty of room to put my arms overhead.
I love it because it allowed me to get into a deep state quickly. I lost track of time and everything else too. After 60 minutes I came out of the float tank a renewed person. That buzz lasted for more than a day physically but even longer mentally. It cost $40 for a one hour float. Check out their website to find out more about floating. http://www.floatsanctuary.com/ Hopefully there is a place to float near you.
My wife wasn’t comfortable with the total blackness so she let some light in. She swears by the benefits of the float too. She is a chiropractor and said how good it made her body feel. It definitely relieved the stiffness in my old bones.
I have to laugh when I share the experience with people whose automatic reaction is “why would you pay to do that?” All I can do a smile in reply. Try it…and nothing will happen to you too!
I’m a health nut and learn as much as I can about nutrition, exercise, etc. Over the years I have learned much from Dave Asprey and Bruce Lipton.
This podcast is a profound conversation between two of the smartest people in health. When you listen to it think about the following:
- It’s all about how we produce and manage energy.
- While we all have our DNA’s our environment affects who we are more than anything else.
- First there is the mental environment. Do you have a positive mental attitude? Do you love and seek love? Do you believe?
- Then there is the physical environment. You are in a petri dish. What’s the culture like? Is it wholesome? Energizing? How’s it affecting your performance?
- When things can’t grow anymore on their own they have to collaborate.
- It’s collaboration and cooperation… not competition that drives evolution.
Now think about how those six thoughts apply to the whole. To your family culture? Your company culture?
How is energy generated at your company? Is it generated by stress? Some stress is a good thing. It’s why we work out. Too much stress results in overuse, injuries, resentment. Too much stress is energy depleting and not sustainable. As Joseph Campbell said “Work can be a life draining affair.”
Is the energy generated by engagement at work? Do people feel energized on their way to work? Do they still feel energized on their way home? The challenge here may be maintaining that energy level, especially in times of great external stressors or the sneaky complacency of success.
What is the mental environment at work? How do you and your employees think about the work they do? How do you try to pump up that thinking? Do you brand a thought experience to your employees? Like IBM did when it suggested everyone THINK. Or Ford did when it said Quality is Job #1. Or as Lexus says A Relentless Pursuit of Perfection. Do you have thought billboards on the walls? Everywhere? That change positions so they stay fresh?
Remember, thoughts are things.
What’s the physical environment like? Does it look like an energizing place to work? Well….does it? Is there good light, fresh air, cleanliness?
I remember working with a printing company years ago. They had 120 employees and 3 shifts working on these big Heidelberg printing presses. There was a ton of drama and shift wars going on. And the place looked like a mess. When I asked about that the CFO that brought me in justified by saying we are a printing company and they are all messy. When I asked why that was the case he didn’t seem to have a good answer. Here’s what I had them do. Over a weekend they brought in a painting and cleaning crew and extra equipment. Employees would be paid overtime if they wanted to help paint and clean. They had a clown and bounce house for kids out in the parking lot and refreshments for all.
Most employees participated even if for just a few hours each. By the end of the weekend that place looked amazing. No printing company that CFO knew of ever looked so good. And it changed the culture. Things were left tidy by each shift. The wars stopped. Customers were brought back into the shop for tours. Workers took new pride in themselves. And they had a 1.3 million turnaround in 6 mos.
Remember this: your physical environment is always communicating. It is never not communicating. So make sure it is an energy giving story.
Last thing about the “physical” environment. Each one of us is a physical environment. I have preached forever in the value of making sure your employees get very health food at work. One of the best investments you can make to build and maintain energy. If you listen to this podcast you will know why.
What’s the cultural environment feel like? How well can people grow in it? Can everyone see a growth path? Is the culture energy giving or energy draining?
How do we foster cooperation and collaboration? Slack is great but that’s just part of the equation. How do we talk about it, engineer for it and incentivize it?
Like I said an amazing conversation. Tell me what you think about it.
I sense there is a lot of fear and depression going on. And…it can’t be ignored.
While I have never entertained the thought of suicide, that’s not been the case for so many others. And… it’s been hitting close to home the last few years.
A 13-year old boy, who was the younger brother of my son’s friend, committed suicide last month because he got himself in trouble and feared the judgement that would come with it. This was a sweet boy who had many a sleep over at our house.
Four years ago, my dear cousin committed suicide leaving his wife and two lovely daughters behind. Last year, two of my oldest son’s best friends committed suicide, one of whom also left two children behind.
Where I live in Coronado we have a bridge that is famous for its suicides. It is second in the country behind the Golden State Bridge for suicide attempts. You can’t be in Coronado and not be aware of the problem. 18 people have jumped since January. A few days ago my wife told me the mother of a 16-year-old award winning student we know jumped off the bridge.
I live in a military town and know many soldiers, including many SEALS. Their rate of suicide is well known but seldom publicized. Many of them are struggling with PTSD problems. My friend Dr. Bart Billings has been working with many of these young men and women, trying to get them off of killer medications.
Recently one company I know, under significant financial pressures, had two employees commit suicide within a few months. You can’t ignore that.
I recently spoke to a group Chief Financial Officers for construction firms and they have a program going on to address the suicide problem in the construction industry. http://www.cfma.org/news/content.cfm?ItemNumber=4570
My son told me the Netflix series 13 Reasons Why which has caused a great deal of buzz on campus. It’s about a girl who commits suicide and gets back at other people by telling them how they contributed to her death. Based on the book
Recently the media focused on a 20 year old woman convicted for bullying her boyfriend to kill himself. The messages she sent him were chilling. https://www.washingtonpost.com/news/true-crime/wp/2017/06/16/shes-accused-of-pushing-him-to-suicide-now-a-judge-has-decided-her-fate/?utm_term=.5288fb6ec40c
What do we do with all of this? How do we make sense of it? I know I can’t ignore it when it strikes so close to home. I have to talk to my wife and son about how they are going this experience. HR and other executives may want to recognize its impact at work.
I did some digging. Starting with the data about suicide and then looking for resources for families and companies to help to deal with it.
According to DoSomething.org:
- Nearly 30,000 Americans commit suicide every year.
- Suicide is the 3rd leading cause of death for 15 to 24-year-olds and 2nd for 24 to 35-year-olds.
- On average, 1 person commits suicide every 16.2 minutes.
- Each suicide intimately affects at least 6 other people.
- About 2/3 of people who complete suicide are depressed at the time of their deaths. Depression that is untreated, undiagnosed, or ineffectively treated is the number 1 cause of suicide.
- There is 1 suicide for every 25 attempted suicides.
- Males make up 79% of all suicides, while women are more prone to having suicidal thoughts.
- Over 50% of all suicides are completed with a firearm.
Hundreds of people decide to commit suicide at work every year. An example from OSHA:
- Employee Is Killed After Jumping From Roof
- Worker Drives Off Bridge And Drowns
- Commits Suicide Soon After Arriving At Work.
- Employees Are Killed In A Murder Suicide
- Dies From A Self-Inflicted Gun Shot.
- Employee Commits Suicide In Hospital Restroom
- Worker Commits Suicide Using Sodium Azide
- Water Treatment Worker Commits Suicide
- Employee Commits Suicide By Jumping Off Parking Structure
- Employee Shoots And Kills Self In Shed
- Jumps From Elevated Platform And Is Killed
- Employee Commits Suicide At Work By Hanging
What I’ve learned is that while there are commonalities, the stories behind suicide are as unique as life itself. Sometimes it is a result of a chemical imbalance in the brain caused naturally or due to prescription medications or drug abuse. It could be due to a fatal diagnosis or intolerable pain. Other times it is a traumatic event and other times it’s fear, hopelessness and failed expectations.
In all circumstances… they saw no way out. They saw no path to peace other than to end their lives.
There are a ton of emotions triggered by a suicide including shock, anger, grief, despair, confusion, rejection, the need to understand “why”, physical collapse or even the thought of suicide itself.
Acknowledge these feelings, don’t pretend they don’t exist. It is OK to question them, examine them and discuss them. And it is OK to ask for help. You are not alone.
Here are some excellent resources:
- American Foundation for Suicide Prevention- https://afsp.org/
- Suicide Prevention Lifeline- https://suicidepreventionlifeline.org/
- Suicide Prevention Resource Center- http://www.sprc.org/
- 13 Reasons Why- Here’s how to talk to kids about it. http://www.sprc.org/13-reasons-why
- For military men and women with challenges my friend Dr. Bart Billings has written an excellent book https://www.amazon.com/Invisible-Scars-Combat-without-Medication/dp/194110214X
- JAN Accommodation Ideas for Depression https://askjan.org/media/depr.htm
- Substance Abuse and Suicide: A Guide to Understanding the Connection and Reducing Risk https://www.drugrehab.com/guides/suicide-risks/