In Review
Name: The Black Swan
Author:Nassim Nicholas Taleb
Publisher: Penguin
This book, first published in 2007, has already become a business classic. Nassim Nicholas Taleb was born in Lebanon and lived much of his childhood years through the Lebanese Civil War. These experiences caused him to view life and events in a very different way from most people. Indeed his experiences made him question many of society’s holy cows, particularly in the area of statistics, which forms the basis for so many business and economic decisions.
The term ‘black swan’, coined by Taleb, is being used more and more in business to denote major unexpected events or happenings that have a fundamental impact on society, the economy, business or the planet. Black swans can be positive or negative. Examples include the subprime crisis, the 9/11 attacks, a serious earthquake, the emergence of the internet or cell phones.
Taleb suggests that the event may be viewed differently by different observers. In a simple example he says a turkey that wakes each day to a bowl of food would be justified in thinking that life is great and will continue that way, since his experiences only encompass a good life. He does not know that in fact he is being fattened up for thanksgiving dinner. When one day wakes to find the butcher with an axe in hand he will see the experience as a ‘black swan event’. The butcher on the other hand will see it as fulfilling his thanksgiving plan.
In life, we are frequently confronted by ‘black swan events’, which seem to arrive out of the blue. Part of the problem is that we use very poor predictive techniques and our risk identification processes are hugely deficient. Taleb is not convinced you can predict them because he believes in randomness. He is pretty scathing about the abilities of economists to forecast the future as he says their models are fundamentally flawed. He is equally scathing of tools like the bell-curve and portfolio theory as they, like the turkey, use experience as the basis for decision-making. They are designed to ignore ‘black swan events’, so we shouldn’t be surprised that they don’t predict them. He labels most statistics as just ‘bad mathematics’. Taleb, now an academic, writer and consultant, spent many years as a portfolio manager in New York, so he does have plenty of experience in these areas.
Read it for yourself. This is truly a worthwhile book to read. Much of the book is technical so you can leave out some chapters. However, I can guarantee that once you have read it, you will become much more of a skeptic, and you will look at risk management in a totally different light.
Name: Beyond the Business Handshake
Author: Karl Smith
Publisher: Mind Power Publications
Price: R175.00 (Postage included)
“If there is any secret to success, it lies in my ability to get another person’s point of view and see things from their angle as well as your own”
Karl Smith gives you tips on how to move from the business handshake to build a relationship with your associates. The book goes beyond the normal rules of giving business cards and having a business handshake to a more human angle. He talks about setting your networking goals and making “every conversation an opportunity for success.” He demonstrates the importance of people’s skills and emphasises that business men and women are still and have always been normal people.
As he explores the human angle of building business relationships he also emphasises some of the fundamental rules of business, such as integrity, intent, capabilities, results and, of course, business ethics.
