Pearl Harbor

 

Pearl Harbor Day. The unthinkable attack.

Many strategies in military history have been successful merely by dint of their sheer audacity. German Blitzkrieg, Hannibal at Cannae, Ulysses S Grant’s Vicksburg campaign,

Historians love to regale such bold innovations crediting the leaders who conceive them with plaudits of guile and courage. But who remembers the managers who anticipated such outliers of possibility and in so doing thwarted them? In fact, very little attention gets paid to unthinkable downsides.

About the only person who has, Nassim Taleb, has risen to prominence of late. His Black Swan is the definitive treatise on the unthinkable downside. It should be more of a ‘Managers Handbook’ than anything by Tom Peters or Michael Porter. He passes the test of the adage ‘if you’re so smart, why aren’t you rich’ with his highly lucrative investment fund whose strategy bets on such unthinkables. In short, most people are poor assessors of risk, especially downside risk. Therefore, to most people a ‘once in a thousand’ event is as unthinkable as a ‘once in a million’ event. Taleb bets on the latter at prices of the former and makes a three-orders of magnitude profit.

In fact, our most recent times seemed defined by the unthinkable. A Bernie Madoff investment losing money (never mind being a complete sham). A Fortune 500 company going bankrupt. A country going bankrupt! A continent going bankrupt!!

Leaders envision the unimaginable; Managers prepare for the unthinkable. Both together secure new possibilities.

Are you thinking the unthinkable?

Advertisements