Characteristic #22: Dealing with Unknown Unknowns

By | October 17, 2013

[October 17, 2013]  Unpredictable major events, good or bad, that have a major effect on people, organizations, or society are often justified as destiny after their occurrence.  While we cannot predict such events, we can certainly put into place mechanisms that prepare us better to take advantage of them.  Taleb called these events “Black Swans.”1

The Honorable Donald Rumsfeld2 began speaking about these many years before Taleb’s book.  Rumsfeld notes that with respect to significant events, knowledge of them falls into three categories.  There are things about them we know we know, there are things we know we don’t know, and there are “things you don’t know you don’t know.”  Rumsfeld calls them “unknown unknowns.”  We only know about them after they have occurred.

The main idea of both Rumsfeld and Taleb is that we should not attempt to predict such events, but should build robust systems to protect ourselves against negative ones and be able to exploit positive ones.

There will always be a gap in our knowledge and as senior leaders we should at least know that the potential exists for a such a surprise from the unknown.  This is where having as much knowledge as possible and the flexibility to “connect the dots” helps us cognitively to put together procedures to handle the evitable outcome.

We can do this in several ways.

First, by developing a staff of personnel who are regularly challenged to “think out of the box,” to be innovative, to develop and work solutions not tried before, and to be provided the time to engineer new, flexible methodologies to problem solving.  While we cannot prepare for these unknown unknowns, we can certainly have the talent who have been tested and are available for such an event.

Second, by having the most amount of up-to-date and organized information possible and readily accessible to the senior leadership and staff.  If there is the possibility that an event in another business can affect your organization, then the information should be sought after.  The emphasis here is organized information – but beware that problems can often result from information overload.

Third, avoid operating from a preconceived mindset.  This will limit options and place us on the path to failure.  Any existing plan, procedure, policy, or standard operating procedure can be ineffective despite being up-to-date simply because they are built on assumptions that turn out to be wrong.

Fourth, when the inevitable unknown unknown does occur, we should not take the normal response by trying to find out who is at fault and waste precious time trying to fix blame.  There will be time for that later.

As senior executives leaders we need to remain nimble and agile.  By developing our employees and staffs and keeping communication open, will put us on the path to being able to take advantage of those Black Swan events.

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[1] Fooled by Randomness.  Nassim Nicholas Taleb. 2001.  Black Swan is a metaphor that describes an event that comes as a surprise, has a major effect, and is often inappropriately rationalized after the fact with the benefit of hindsight.  Nassim Taleb’s 2007 book The Black Swan extended the metaphor to events outside of financial markets.  Taleb regards almost all major scientific discoveries, historical events, and artistic accomplishments as “black swans”—undirected and unpredicted.  He gives the following as examples of black swan events: rise of the Internet, the personal computer, World War I, dissolution of the Soviet Union, and the September 2001 attacks.

[2] Rumsfeld’s Rules: Leadership Lessons in Business, Politics, War, and Life, Donald Rumsfeld, 2013.

 

 

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Author: Douglas R. Satterfield

Hello. I'm Doug and I provide at least one article everyday on some leadership topic. I welcome comments and also guests who would like to write an article. Thanks for reading my blog.