Harvard Business Publishing

Larry -- Interesting that Taleb thinks that "predictions are pointless in the face of life's nonlinear structure." Paul Ormerod, an economist an author of "Why Most Things Fail" makes a similar point in an interview in the June HBR. He says "Executives overestimate the control they have over the fate of their organizations" and adds "Companies should embrace the inherent randommess that drives success and failure and that no amount of cleverness and information can overcome." If Taleb and Ormerod are right, organizational outcomes are more the result of chance than carefully devised strategy. If that's true, it suggests that companies should devote more energy to random experimentation and less to strategy development.

Larry - I agree with you completely about the "Black Swan". It is a totally mesmerizing work that has my head swimming both day and night. The main ideas are as slippery as they are enticing. The more deep my attempt to fully understand and apply these ideas the more they seem to slip away. This, too, is a confirmation of the ideas in the book that we are hardwired to not think about and understand uncertainty in the ways suggested by Taleb.

I would love to be involved with an actual discussion group about this book, to delve deeply into each chapter. So far I have not found any such thing. Please let me know if you are aware of any such group.

As an aside, the title of your upcoming book seems interestingly related to the “Black Swan”. I would like to know more about it, too.

After finishing the book and having written a note on the book myself, I set out to read various reviews on Black Swan. What strucks me most is that people whose daily lives are affected by randomness tend to see a kindred spirit in Taleb while most professional book reviewers tend not to recognise the signifcant of Taleb's thesis and points to other much less relevant point such as the book's lack of clear structure.

Dear Larry,

Taleb's book, though written as a polemic and much too much irreverance, has a very vital thesis. What it tells us is to come to terms with uncertainty rather than "manage it".

I offer the prospect of "anticipation" - rather than prediction - as a means to "deal with" (not manage) uncertainty in life, markets, industry etc. If there were a systemic anticipation that we could come up with, there may yet be a smart and intelligent way of tinkering - something that Taleb advocates very fervently.

Talebs' discounting of most of the factors which are often retroactively applied to explain success has some weight, and the explanations are often specious.
His attributing the results to luck though seems to be just replacing these justifications with one equally shallow.
To take an example, suppose we have a group of musicians, one of who attains substantial success.
Taleb's argument is that random distribution can explain that, and so the usually attributes are not relevant.
However, it is also true that of classical musicians, successful solo artists have done around twice the hours of practise as those who end up in an orchestra.
You could therefore re-select the initial group, and weight it by the hours of practise, and you would still get the same result of just one ultra-successful person, however the chances would be high that they were from the smaller, more select group which did more practise.
Most of those who did a lot of practise would still not be successful though, so should we attribute the success of the one who did purely to luck?
We surely have some clues from our earlier categorisation.
We might perhaps come up with other criteria which might help, from the age which they started study or the degree of application and so on.
Is the residue due to luck though?
It would seem equally probable that many other factors of which we are unaware may come into play, IOW instead of mere chance the sample is not homogenous, and we just cannot fully categorise all the factors.
Because some explanations were unreasonable does not mean that all explanations are unreasonable, although we may never be able to fully explain all the criteria, and an underlying randomness may still come into play at the end.
It doesn't help though to class all those factors as 'luck'.

David,

I think Taleb would agree with you and that you have misunderstood the thesis. Taleb's thesis is much more "we don't know" than "it's all luck". He said in several place that luck plays a larger role that we assume not that it is 100% the cause. His emphasis is much more our our failure to attribute any or even a little to luck that is the problem. He makes many attempts to credit talent and effort but warns the reader not to tunnel into these and asymmetrically apply our knowledge.

What we don't know does not meant it wasn't known. The simplification of "we" in "we don't know" is equally invalid as confirmatory statement of general knowledge.

Participants of 9-11 and many of their terrorist cohorts have foreknowledge of 9-11 on 9-10; Hitler and his believers have foreknowledge of war before “we do”; Japanese Kamikaze attackers have foreknowledge of 12-7 before "we do". . .I can go on and on with examples. Successes of these impacting history events were, in fact, involve considerable luck. However, they were meticulously planned and executed otherwise considerable luck wouldn't have changed history.