The (Resilience) Elephant in the Room

I’ve been pondering a problem with the whole proposition of resilient organisations. In particular I’ve been considering the potential dilemma of those who build such resilience. For who would employ a CEO (or an aspiring one, or any senior manager, to be honest) that has no solid record of dealing with crisis, disaster and a great deal of general awfulness?

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If the individual has built a resilient little empire that has been very successful, then while they can use the success in their next job or investment application, they’d have a harder time demonstrating they could also steer the ship through a major storm, would they not?

Nassim Nicholas Taleb (2007) explains it better than I.  Thankfully, he also provides starting blocks for an answer!

The Black Swan: The Impact of the Highly Improbable (Taleb, 2007) was one of the first books I read cover to cover for my MSc course.  It doesn’t pretend to be an academic book, but it references the literature well and remains one of my favourites for its accessibility of writing style and for usefulness. Along with Dan Gardner’s Risk, it remains in my go-to pile of books that have the most notes pencilled in the margins and most post-it pointers in their pages.   The black swan of the title refers to a surprise that’s a result of a false assumption: in this case, most of the world had only seen white swans and assumed all swans were white.  Then Australia was ‘discovered’, along with some black swans, and the assumption had to be thrown out the window.  (Malcolm Gladwell might refer to these as ‘Outliers’) Here’s how Taleb helped me today:

My problem, this time in Taleb’s words:

“Assume that a legislator with courage, influence, intellect, vision and perseverance manages to enact a law that goes into universal effect and employment on September 10, 2001; it imposes continuously locked bullet-proofed doors in every cockpit (at high cost to the struggling airlines) just in case terrorists decide to use planes…. This legislation is not a popular measure among the airline personnel, as it complicates their lives.  But it certainly would have prevented 9/11.  The person who imposed locks… gets no statues in public squares, not so much as a quick mention… in his obituary, “Joe Smith, who helped avoid the disaster of 9/11 died of complications of liver disease”.  Seeing how superfluous his measure was, and how it squandered resources, the public with great help from airline pilots, might well boot him out of office… He will retire, depressed, with a great sense of failure. I wish I could go to his funeral but, reader, i can’t find him.   And yet, recognition can be quite a pump.  Believe me, even those who genuinely claim that they do not believe in recognition, and that they separate labour from the fruits of labour, actually get a serotonin kick from it.  See how the silent hero is rewarded: even his own hormonal system will conspire to offer no reward.” (Taleb, 2007)

So I had to start considering why, in the real world, whether it’s actually in a senior manager’s best interest to create a resilient, crisis free, environment.  But here, thankfully, are the beginnings of an answer:

1. Resilience can’t prevent everything.  Risks must be balanced, and besides, many risks are completely beyond the control of your company, for example, the envivironment: “In all my experience, I have never been in any accident… of any sort worth speaking about.  I have never seen but one vessel in distress in all my many years at sea. I never saw a wreck and never have been wrecked nor was I ever in any predicament that threatened to end in disaster of any sort” (Probably E.J. Smith, 1907, Captain of RMS Titanic, quoted in Taleb (2007)
2. And stability (including that created by resilience, presumably) lowers awareness and encourages risk taking: “The economist Hyman Minsky sees the cycles of risk taking in the economy as following a pattern: stability and absence of crises encourage risk taking, complacency, and lowered awareness of the probability of problems. Then a crisis occurs…” (Taleb, 2007).

So there we have it.  Like most things, or so I seem to find, it’s a circle.  Probably one that’s worthy of a diagram in my dissertation. Though, of course, now I have new questions… but isn’t that what this is all about?!

So that elephant that was my big elephant in the room, and I think I have the beginning of the argument with which to overcome it.   Though maybe it wasn’t an elephant, but a swan.  And a black one at that.

Tagged: 9/11, black swan, dan gardner, no heroes, prevention, risk, Taleb

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