The Black Swan Box

Posted by Steve C on July 1, 2010 under The Blog | Be the First to Comment

When we wrote the book, There Is No Box, we referred to the proverbial box as that set of long-held assumptions and limitations, which stifled peoples’ thinking about what they were capable of, or what was possible. Real growth leaders learned to ignore it, and found ways to do the impossible almost everyday. But ignoring the box, no longer simply applies to organizational growth, it can also apply to events which have significant and unfortunate consequences.

There is a term that occasionally pops up these days, called the black swan. You can Google it for the exact definition, but my layman’s description is an event that has a virtually impossible chance of occurring, but if it does, the consequences can be catastrophic. Whether official examples or not, two that come to mind for me are 9/11 and the economic crisis. What are the chances that terrorists could commandeer planes and take down the twin towers and a chunk of the pentagon? And what are the chances that the mortgage default rate could suddenly erupt, at the same time more securities were being offered based on those worthless mortgages, and that several of the rock solid financial institutions would literally fail overnight? Get the picture? Experts would say the chances of everything falling into place for these events to occur was slim to none. But they did.

And now we are all aware of a 3rd example. It was considered virtually impossible for the oil platform in the gulf to explode and even if it did, even more impossible for much damage to occur to the coastline, given the power of the ocean to virtually consume the free-flow of oil. Well, we all now different now, don’t we.

Here is the message: Events that are simply not supposed to happen seem to be happening more and more everyday. You cannot remain stuck in the box of denial, ignoring the chances of catastrophes such as these ever being able to happen. The traditional box might say they won’t, but recent history tells us they will. One wonders if BP and partners were indeed stuck in that box, and simply could not comprehend that the mess occurring today could ever happen. Let’s just say, if they cut back on or overlooked anything that in some way contributed to the explosion and spill, that will turn out to be the most costly, cost-saving measure ever taken – ever!

The standards for diligence are soaring, and you must be very vigilant about your cost-cutting or efficiency efforts. What conventional wisdom says is enormously unlikely to lead to something disastrous, might in fact end up crippling you permanently, or at best for years to come. You might find it useful to ignore the box, re-open your eyes toward any black swans lurking in your organization, and begin thinking about and acting on them with a different sense of urgency.

Steve

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