Black Swan – an unwarranted excuse for management failure and its implications
The impact of COVID-19 has led managers world-over to use the terms black swan at their will, often without any reservations. This however isn't surprising, given the increasing popularity of the word since the financial crisis of 2008. But the question risk managers have to ask themselves is whether, is this pandemic really a black swan event? It is therefore imperative to truly understand the essence of the Black Swan Theory to answer our question. Nassim Nicholas Taleb, the person credited for popularising the term, in his book ‘The Black Swan’ highlights 3 attributes of a black swan event, First, it is an outlier, as it lies outside the realm of regular expectations, because nothing in the past can convincingly point to its possibility. Second, it carries an extreme 'impact'. Third, in spite of its outlier status, human nature makes us concoct explanations for its occurrence after the fact, making it explainable and predictable Taleb summarises the attr...
