Black Swans and what the Military can do to avoid them

The military — the Army specifically — discusses framing a problem correctly in order to solve it. As W. Edwards Deming (the process guru who made Toyota what it is) stated, “If you do not know how to ask the right questions, you discover nothing.” In the Army’s effort to frame a problem correctly and ask the right questions, they have applied Design to the most recent version of FM 5-0. The problem is that Design applies to an unscalable world, and as I will explain below, we live and fight in a scalable world.

First off, what is the difference between scalable and unscalable? Scalable is easily defined by the life of a typical hourly worker. If they work 35 hours a week, they get paid their hourly rate times 35 hours. The laws of scalability dictate that input will produce corresponding results, and additional input will produce additional corresponding results. Unscalability has no such laws. Additional work might generate negative results just as easily as it might generate exponential results. Bill Gubman (fictitious person) spends a few years designing a clever software program and sells 8 copies to family and friends. Bill Gates spends a few years designing a clever (and occasionally frustrating) program, and becomes the richest person in America. Proponents of social justice claim that “it’s not fair,” but there is no Fairness law in the unscalable world.

Whereas the scalable world provides us a consistent, predictive environment, the unscalable world is characterized by persistent unscalable activity which, due to its persistent nature, we believe is scalable (i.e. the prevalence of dot-com millionaires in the ‘90s). But the persistent unscalable activity occasionally rocks the establishment with disruptive, unexpected events. These events are called Black Swans.

Tassim Nicholas Taleb introduced “black swans” in his 2006 book aptly titled The Black Swan. These black swans have three characteristics: they are completely unexpected, make a disproportionate impact, and will cause “experts” to try to fully explain their occurrence after the fact.

To clarify, these are not outliers. Outliers are unexpected – sometimes extremely so – but they do not make a disproportionate impact. If a product off a manufacturing line is in the 3d sigma to either side of the mean, then it is an outlier, but it does not impact the rest of the products, the manufacturing line itself, or the employees. It is merely assessed for the nature and genesis of the error and promptly discarded.

Black swans, on the other hand, are like nuclear sucker punches. They come out of the blue and knock you on your ass. And while you’re sitting there counting stars or little birdies, people gather and talk about from where that nuclear sucker punch may have come.

There are two distinct types of black swans: productive and destructive. Productive black swans take years to develop. Google and the internet are examples of the productive type. Destructive black swans take mere moments: 9/11 and Black Friday. As the axiom tells us: it is always easier to destroy than to create. I add that it is always quicker to destroy than to create. It takes about 15 years to raise a child. It takes the squeezing of a trigger to extinguish that life. The critical thing to remember about both types of Black Swans is that they are both disruptive.

So how must the military confront black swans? First, they must realize that black swans exist and that they cause many global conflicts and areas of instability. Remember, black swans can only exist in a world of scalability. If Iran was unscalable – meaning the only way they could wage war was to amass a land force and march on the U.S. – we wouldn’t fear them at all. But Iran is scalable. One motivated leader with a penchant for chaos and a hankering for a seat at the nuclear poker table makes Iran a threat to those outside the reach of a standard land force. Couple that with Ahmadinejad’s access to global media, and he’s a bonafide hero to millions…maybe even billions.

There is no current method for soothsaying the occurrence of black swans with any accuracy. Black swans will occur. They are on par with death and taxes. Knowledge can mitigate their occurrence, and greater amounts of knowledge can mitigate them to a lesser degree…but not to a scalably lesser degree. Why does Bill Gates say that his greatest fear isn’t Google or Apple but the guy in the garage tinkering at 3 a.m.? Because Mr. Gates can imagine, plan, and strategize for a tete-a-tete with Google and Apple. But the dude in the garage is an unknown. No one knows what that guy is making, and by being unknown, he instills fear in others.

So how does the military predict black swans? They don’t. The only way to avoid the impact of a black swan is to be prepared for the impact of the black swan, not the black swan itself. In 2004, the governor of Indiana started a painful process to turn a $400+ million deficit into a $1.6 billion surplus. That allowed Indiana to weather the storm of the recession which began in 2008. Indiana didn’t avoid the black swan, but they mitigated its impact.

The military must understand where its own weaknesses are and strengthen them. But this defensive posture is not enough. The military must take its knowledge (intel) and disrupt the potential origins of black swans. The military may not prevent them all, but it doesn’t take many black swans to cause a whole lot of hate and discontent.

Then how is this different from what the military is doing right now? It’s not. Not really. The military must continue its efforts around the world to mitigate the occurrences of black swans and their impacts, but the military must realize that they can’t get them all. There is a freedom that comes from acknowledging the extent to ones knowledge or awareness, but it can never become a cause for inaction, especially for our military.

Leave a Reply

*