Dr William Edwards Deming
Dr William Edwards Deming is known as the father of the Japanese post-war industrial revival and was regarded by many as the leading quality guru in the United States. He was invited to Japan at the end of World War II by Japanese industrial leaders and engineers. They asked Dr. Deming how long it would take to shift the perception of the world from the existing paradigm that Japan produced cheap, shoddy imitations to one of producing innovative quality products.
Dr. Deming told the group that if they would follow his directions, they could achieve the desired outcome in five years. Few of the leaders believed him. But they were ashamed to say so and would be embarrassed if they failed to follow his suggestions. As Dr. Deming mentioned, "They surprised me and did it in four years". For his efforts he was awarded the Second Order of the Sacred Treasure by the former Emperor Hirohito.
Dr Deming used to say “The most important things are unknown or unknowable". The factors that have the greatest impact, long term, can be quite surprising. Analogous to an earthquake that disrupts service, other "earth-shattering" events that most affect an organization will be unknown or unknowable, in advance. Other examples of important things would be: a drastic change in technology, or new investment capital.
The Black Swan – Nassim Taleb
Nassim Taleb is the author of the book "Black Swan" that discusses the massive and pervasive impact of highly improbable event. Taleb was a pioneer of complex financial derivatives and was a senior trader at Wall Street. Taleb regards many scientific discoveries as black swans—"undirected" and unpredicted. He gives the September 11, 2001 attacks as an example of a Black Swan event. For hundreds of years, it was accepted that the color of swans was white. However, in the 17th century, swans with black color were discovered in Australia - thus the name "Black Swan" - that denotes an improbable event that no one had predicted but came to pass.
Taleb claims that almost all consequential events in history come from the unexpected - while humans convince themselves that these events are explainable in hindsight. He argues that forecasting methods (statistics, fractals, power law, etc) have not been able to predict major events. By just focusing on past events (to predict the future), we tend to ignore other possibilities.
A black swan is an outlier, an event that lies beyond the realm of normal expectations. How would an understanding of the world on June 27, 1914, have helped anyone guess what was to happen next? The rise of Hitler, the demise of the Soviet bloc, the spread of Islamic fundamentalism, the Internet bubble, 9/11: not only were these events unpredictable, but anyone who correctly forecast any of them would have been deemed a lunatic (indeed, some were).
Law of Karma
In contrast to the randomness that Taleb talks about, the Hindus subscribe to the “Law of Karma”. The effects of all deeds actively create past, present and future experiences, thus making one responsible for one's own life, and the pain and joy it brings to others. Karma extends through past life, this lifetime and future lives. The net effect is that you sow what you reap (except that there is a time-lag (that sometimes spans lifetimes) between action and result).
In Conclusion
Hence, the recommendation for us is to keep an open mind and be open to idea that you may not be always able to forecast correctly. The "Black Swan" may be right under your nose and you might miss it completely!!!! In that sense, Deming and Taleb are saying the same thing - be open to the impossible and do not necessarily look to history to predict the future. The past does not necessarily equal or point to the future.
Dr William Edwards Deming is known as the father of the Japanese post-war industrial revival and was regarded by many as the leading quality guru in the United States. He was invited to Japan at the end of World War II by Japanese industrial leaders and engineers. They asked Dr. Deming how long it would take to shift the perception of the world from the existing paradigm that Japan produced cheap, shoddy imitations to one of producing innovative quality products.
Dr. Deming told the group that if they would follow his directions, they could achieve the desired outcome in five years. Few of the leaders believed him. But they were ashamed to say so and would be embarrassed if they failed to follow his suggestions. As Dr. Deming mentioned, "They surprised me and did it in four years". For his efforts he was awarded the Second Order of the Sacred Treasure by the former Emperor Hirohito.
Dr Deming used to say “The most important things are unknown or unknowable". The factors that have the greatest impact, long term, can be quite surprising. Analogous to an earthquake that disrupts service, other "earth-shattering" events that most affect an organization will be unknown or unknowable, in advance. Other examples of important things would be: a drastic change in technology, or new investment capital.
The Black Swan – Nassim Taleb
Nassim Taleb is the author of the book "Black Swan" that discusses the massive and pervasive impact of highly improbable event. Taleb was a pioneer of complex financial derivatives and was a senior trader at Wall Street. Taleb regards many scientific discoveries as black swans—"undirected" and unpredicted. He gives the September 11, 2001 attacks as an example of a Black Swan event. For hundreds of years, it was accepted that the color of swans was white. However, in the 17th century, swans with black color were discovered in Australia - thus the name "Black Swan" - that denotes an improbable event that no one had predicted but came to pass.
Taleb claims that almost all consequential events in history come from the unexpected - while humans convince themselves that these events are explainable in hindsight. He argues that forecasting methods (statistics, fractals, power law, etc) have not been able to predict major events. By just focusing on past events (to predict the future), we tend to ignore other possibilities.
A black swan is an outlier, an event that lies beyond the realm of normal expectations. How would an understanding of the world on June 27, 1914, have helped anyone guess what was to happen next? The rise of Hitler, the demise of the Soviet bloc, the spread of Islamic fundamentalism, the Internet bubble, 9/11: not only were these events unpredictable, but anyone who correctly forecast any of them would have been deemed a lunatic (indeed, some were).
Law of Karma
In contrast to the randomness that Taleb talks about, the Hindus subscribe to the “Law of Karma”. The effects of all deeds actively create past, present and future experiences, thus making one responsible for one's own life, and the pain and joy it brings to others. Karma extends through past life, this lifetime and future lives. The net effect is that you sow what you reap (except that there is a time-lag (that sometimes spans lifetimes) between action and result).
In Conclusion
Hence, the recommendation for us is to keep an open mind and be open to idea that you may not be always able to forecast correctly. The "Black Swan" may be right under your nose and you might miss it completely!!!! In that sense, Deming and Taleb are saying the same thing - be open to the impossible and do not necessarily look to history to predict the future. The past does not necessarily equal or point to the future.
1 comment:
And you so tried?
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