Oracles in the age of black swans

February 12, 2017 2:38 pm

Are humans capable of detecting real life black swans? (Image: Alamy)

Have you read the work of Nassim Nicholas Taleb? If you haven’t, you should. He’s Lebanese, which should appeal to the patriotic amongst us, although he prefers the tag ‘Levantine’. Maybe because the connotations are less problematic and less complex.

He’s a rare, if controversial, intellect.

In 2007 he published a book called Black Swan: The Impact of the Highly Improbable, in which he argued that our blindness with respect to randomness, particularly large deviations, renders predictions pointless and sometimes perilous. Why? Because of what he calls ‘Black Swans’. That is, those unexpected events or happenings that have an extreme impact (either positive or negative) on the world around us, and yet are made to seem predictable in hindsight. “Prediction, not narration, is the real test of our understanding of the world,” he wrote.

In short, humans don’t do well with randomness, probability and uncertainty. Our thinking is limited in scope, he argues, whilst we make assumptions based on the immediate world around us and those things we already know. He offers up examples of Black Swan events, including 9/11 and the First World War, but arguably the most pertinent for our industry is the rise of the internet. Who knew, or foresaw, the extent to which Google and Facebook would come to dominate the media environment? Who amongst us would’ve predicted the disintegration of old agency models? The old world order is in retreat, and yet none of us can put our hands up and say – with hand on heart – that we saw it coming.

As Taleb wrote, we are affected by a chronic underestimation of the possibility of the future straying from the course initially envisioned. And yet year-after-year, sometimes month-after-month, we are subjected to bolts of lightning from the future courtesy of industry soothsayers. You know the ones. Those who feel obliged to justify their titles. The innovators and visionaries and technologists amongst us. Those who believe that data provides the answers to everything. Which, of course, it doesn’t.

Sure, data and statistics can give you an idea of the here and now, but why do we attach such importance to statistics when they tell us so little about what is to come? A single set of data can lead you down very different paths, depending on interpretation.

The list of false predictions is endless. The founder of IBM concluded that the world would need no more than a handful of computers; Western Union said the telephone had too many shortcomings to be seriously considered as a means of communication; Time magazine once ran an article stating “remote shopping, while entirely feasible, will flop – because women like to get out of the house, like to handle merchandise, like to be able to change their minds”. Besides being overtly sexist, the latter (indeed all three) also indicate how – even when aware of what’s happening – we too often underestimate potential impact. Conversely, we are also prone to overestimation.

We are obsessed with predictions. But how many come true? It’s easy to say that regional war and the price of oil will continue to negatively impact the advertising industry, or that the suffering of traditional media will only heighten, or that 2017 will be the year of mobile and social influencers, but shouldn’t we be checking our facts first? If you were to go back over the past few years and re-read the predictions, how many do you think will have proved prescient? In an era of so-called “alternative facts”, are we only adding to the barrage of misinformation?

Forget predictions. We all know the oracles only exist in Greek myths. We are in constant beta. Nothing is permanent, everything is ephemeral. Does the idea of long-term planning in today’s fast moving world even make sense anymore? We should be in perpetual test mode, constantly questioning how any given thing can be achieved more efficiently and more effectively. How we can better gauge consumer behaviour. How we can react more quickly and more precisely. How we can thrive – eaven survive – in an environment that is frequently hostile and increasingly alien.

Shouldn’t we be recognising that the improbable regularly becomes the probable, and that known unknowns – or unknown unknowns – are impacting our industry more than we care to admit, and that we can do nothing about it?

Therefore, as agencies we should be pre-occupied with evolution, not predictions of what may or may not be. The need for agility and nimbleness has never been more pronounced. This requires a level of coming togetherness that our industry has traditionally excelled in. And togetherness – I believe – breeds preparedness for all eventualities.


AMEinfo Staff
By AMEinfo Staff
AMEinfo staff members report business news and views from across the Middle East and North Africa region, and analyse global events impacting the region today.