Golden Swans and Strategic Thinking

I just bought a Lotto ticket. Yes, I know, Lotto is a tax on people who don’t understand statistics. I have a different take on this saying – statistics are a tax on people who don’t understand random possibility!

Buying a ticket for a few dollars is one way in which I can expose myself to a Golden Swan with very little cost…in fact a large portion of it will go to charity anyway. A golden swan is a sudden unexpected event or series of events of huge benefit. It is the positive version of a Black Swan – a term coined by Nassim Taleb in his book ‘The Black Swan’.  To be fair, Taleb refers to Black Swans as both positive and negative possibilities although he explores the negative version at more length. I prefer the term Golden Swan* – Black always sounds so negative.

There are lots of golden swans; we often call them ‘luck’. Well, even though luck is a random possibility, it only strikes if you are in the right place at the right time! Positioning for possibility is something that we rarely do but can pay off. For example, statistically, the chances of becoming a billionaire by writing books is even less than winning lotto. JK Rowling wrote a book – if she hadn’t, we wouldn’t know about her. Some of you are now going to protest that JK Rowling is a very good writer and that it is nothing like buying a lotto ticket. Well there are millions of good writers with great ideas – you have never heard of them. It is never enough to have good skills and a great subject alone. If you have any talent – do something with it!

Every personal and business strategy should identify potential areas for catching golden swans as they fly past. It is about being in the right place at the right time; ‘you have to be in to win’ or as Woody Allen once said ‘Showing up is 90% of success’. We tend to notice the disasters more than the opportunities and yet they are both randomly delivered. A black swan hits us whether we want it or not – a golden swan can be caught by those who think it could come and make a plan to catch it.

 

Planning to deal with future potential negative black swans is another whole area for strategic thinking and isn’t just about risk management. Interestingly, Black Swans also usually lay golden eggs; that is there can be positive opportunities in the wake of disastrous events - but they are both the subject for another article!

Golden swans are about taking action as well as a position. They do not visit those who do nothing! Have a dream and start it. Some people believe that luck will just visit them if it is their turn or if they believe enough or if they deserve it; but it won’t. The ancient Chinese had a great saying ‘Man stand long time with mouth open waiting for roast duck to fly in’. Perhaps we should change that to ‘roast golden swan to fly in’.

For me, I’m buying the lotto tickets to expose myself to the potential of a Golden Swan. For everyone, a key part of business or personal planning is to: Avoid or limit the impact of black swans; look for and collect golden eggs from black swans and position and act to take advantage of golden swans.

Notes:

 

*In his book ‘The Black Swan’ Taleb defines a black swan as an event with three characteristics:

• Low predictability. It is an ‘outlier’. Low statistical likelihood.
• It has an extreme impact, often life changing.
• It can be rationalised later. It has retrospective predictability!

* Golden Swan – an idea introduced to me by Jane Francis

Read a review of the book The Black Swan here:

http://brightbrainforwisdom.blogspot.com/p/book-reviews.html