Dilbert - Doing Nothing

One of my intellectual heroes (see side bar on right) and inspiration on the topic of risk is Nassim Taleb. And a while back, Taleb penned a piece for the Sunday Times that united both embracing failure as well as leadership and management upside/downside balance – “Do noting: it’s the answer to so many problems. From medicine to the economy, we should realise and stick to the limits of our knowledge.”

“Psychologists make a distinction between acts of commission (what we do) and acts of omission. Although these are economically equivalent for the bottom line – a dollar not lost is a dollar earned – they are not treated equally in our minds. We have a psychological hang-up preventing us from accepting negative advice. People do not realise that success consists mainly of avoiding losses, not of trying to derive profits. How do you live long? By avoiding death. Positive advice is usually the province of the charlatan. Bookshops are full of books on how someone became successful; there are almost no books with the title ‘What I Learnt Going Bust’.”

While he spotlights the oft neglected or even maligned avoidance of downside (the ‘Manager Myth’), he doesn’t advocate a big redirection of resources to the downside, just common sense. In fact, he is against regulation (often applied by well or not well meaning individuals to protect against the downside). He cites the brilliant term of ‘iatrogenic’ which is “harm caused by the healer”. Often not calculated in the introduction of protective measures.

Instead, he advocates some common sense in managing risk though some tasty metaphors. His lessons in embracing doing-nothing-ness…

  • “People who were driving a school bus blindfolded (and crashed it) should never be given a new bus.”
  • “Don’t let people making an ‘incentive’ bonus manage a nuclear plant – or your financial risks.”
  • “Don’t give children sticks of dynamite – even if they come with a complex warning label.”
  • “Don’t give an addict more drugs if he has withdrawal pains.”
  • “Don’t depend on financial assets as a repository of value and rely on fallible ‘expert’ advice for retirement.”