Navigate Knowing of Black Swans

New York University risk engineering professor Nassim Nicholas Taleb defines a Black Swan as a large event which is both unexpected and highly consequential. Based on his studies, Prof. Taleb argues that, if you navigate your business environment knowing of Black Swans, these events can improve your profitability by weakening your competition and offering you opportunities to learn.
     Analyzing Prof. Taleb’s thesis motivated me to develop my own version, incorporating organizational psychology findings:

• Maintain dependent independence. Coordinate your business actions with your stakeholders. Take into account customers’ preferences, suppliers’ plans, regulatory trends, and so on. But keep enough independence so that you are not dragged down by failures of your stakeholders and so you can exercise leadership. Don’t undertake initiatives based on preferences of a highly limited set of key customers, don’t tie yourself to only one or two suppliers, and don’t assume regulatory trends are immutable. 
• Recognize the economies of small. Business researchers point to the economies of scale. But they too often gloss over the advantages of small. Small retail businesses can change course more quickly than large retailers, and there’s usually more entrepreneurial accountability in smaller retail businesses. To realize the nimbleness of small, your retail business requires adequate cash and credit cushions, though. Prof. Taleb makes a case for relying on equity rather than debt. To realize the accountability benefits, have you and your staff involved in as many of the various retailing tasks as possible. Prof. Taleb writes that in Roman times, when an engineer designed a bridge, the engineer was forced to sleep under the completed structure. As I see it, the logic of that tactic depends on the engineer also being intimately involved in the construction. 
• Plan for unpredictable cycles. A characteristic of black swans is that after we’ve navigated by one, our brains fool us into thinking we should have been able to anticipate it. Mostly, we can’t. So how do you plan for the unpredictable? By having adequate reserves of money and expertise. How do you emotionally traverse the unpredictable setback? By knowing that economies, organizations, and individuals almost invariably go through cycles. What is down will come up again at some point. Black swan advice assumes that your existing strengths when encountering each destructive event allow you to outlast the enfeebled competition. 

For your profitability: Sell Well: What Really Moves Your Shoppers

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