ResilienceResilience**

*Living with the possibility of Black Swans*Living with the possibility of Black Swans

Attributes of resilient people:Attributes of resilient people:

Inner calm (Buddhist?) Inner calm (Buddhist?) High self-knowledge (“comfortable in own skin”)High self-knowledge (“comfortable in own skin”)Breadth of experience—drove a cab, worked construction, ran Alaska tours …Breadth of experience—drove a cab, worked construction, ran Alaska tours … as well as more traditional stuff as well as more traditional stuffSense of, “Ah, my moment” (Giuliani)Sense of, “Ah, my moment” (Giuliani)Lover of modestly controlled chaos (bored amidst calm—FDR)Lover of modestly controlled chaos (bored amidst calm—FDR)Reach out effortlesslyReach out effortlesslyReach out effortlessly to a wide variety of peopleReach out effortlessly to a wide variety of peopleBizarrely energeticBizarrely energeticKnown for integrity, in the sense of “straight shooter”Known for integrity, in the sense of “straight shooter”Hires resilient people Hires resilient people per seper se in key positions! ( in key positions! (AllAll senior leadership roles?) senior leadership roles?)Maintains sense of humorMaintains sense of humorEmpathy (“I feel your pain”)Empathy (“I feel your pain”)“Cruelty” (Must make tough decisions instantaneously, without looking back; not“Cruelty” (Must make tough decisions instantaneously, without looking back; not “confident,” but overwhelming sense of urgency to press ahead) “confident,” but overwhelming sense of urgency to press ahead)Decisive, but not rigidDecisive, but not rigidStrong individual, equally strong team playerStrong individual, equally strong team playerKnows herself, himselfKnows herself, himselfUnderstands the chain of command—and evades it as necessaryUnderstands the chain of command—and evades it as necessaryComfortable being challenged by thinkers, but a strong “doer” bias overallComfortable being challenged by thinkers, but a strong “doer” bias overallA person of Hope (religious or “religious-like”?)A person of Hope (religious or “religious-like”?)

Not necessarily:Not necessarily: ex-college QB, comeback rep (Why: All within the rules, within ex-college QB, comeback rep (Why: All within the rules, within the context of that which has been practiced) the context of that which has been practiced)Better:Better: Ocean sailboat racer; ER doc; public health doc; astronaut; combat Ocean sailboat racer; ER doc; public health doc; astronaut; combat experience as NCO; hostage negotiator; survived in hopeless circumstances experience as NCO; hostage negotiator; survived in hopeless circumstances through guile and grit; seeks “independent duty” through guile and grit; seeks “independent duty”

TestsTests: lights go out during interview, followed by fire alarm, etc; focus on : lights go out during interview, followed by fire alarm, etc; focus on resilience resilience per se in reference checks per se in reference checks

Attributes of resilient organizations:Attributes of resilient organizations:

Hire resilient folks at all levels and in all functions—explicit aboutHire resilient folks at all levels and in all functions—explicit about so doing so doingPromote resilience—explicit about so doingPromote resilience—explicit about so doingDecentralization!!!!!!!!! (organization structure, physical configuration,Decentralization!!!!!!!!! (organization structure, physical configuration, systems) systems)Shadow “emergency organization”Shadow “emergency organization”Redundancy!!!!!!!!!!!!!!!Redundancy!!!!!!!!!!!!!!!Culture of (1) self-starting, (2) caring and respect, (3) Execution isCulture of (1) self-starting, (2) caring and respect, (3) Execution is Priority #1, (4) Accountability-responsibility—100% of folks Priority #1, (4) Accountability-responsibility—100% of folksCulture of Resilience (as explicit “plank” of values set)Culture of Resilience (as explicit “plank” of values set)Talk it up!! Talk it up!! MBWA—e.g., great communication all the time about everythingMBWA—e.g., great communication all the time about everythingTransparency (all in the know, none in the dark)Transparency (all in the know, none in the dark)Financial paddingFinancial paddingExcellent equipmentExcellent equipmentTraining >>>>> EquipmentTraining >>>>> EquipmentAbility to get by for quite a while without IS-IT!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!Ability to get by for quite a while without IS-IT!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!Test in uncomfortable situationsTest in uncomfortable situationsPromote an unusually high share of mavericksPromote an unusually high share of mavericksDiversity per se!!!!!!!!!!!!!!!!!!!!Diversity per se!!!!!!!!!!!!!!!!!!!!

The Black Swan: The Black Swan: The Impact ofThe Impact of

the Highly the Highly ImprobableImprobable

Nassim Nicholas Taleb Nassim Nicholas Taleb

1982 1982 (-)(-) = = 200 200

Years Years (+)(+)

1982/Default Latin 1982/Default Latin

America = America = 200 200 yearsyears [Total historical [Total historical

earnings]earnings]

The The Black SwanBlack Swan: The Impact of the: The Impact of the Highly Improbable Highly Improbable, Nassim Nicholas Taleb, Nassim Nicholas Taleb

TP: This book This book willwill (should!)(should!) change change your life.your life.

Siegfried and Roy Siegfried and Roy

= = 1,000X1,000X [gambling variability][gambling variability]

The The Black SwanBlack Swan: The Impact of the: The Impact of the Highly Improbable Highly Improbable, Nassim Nicholas Taleb, Nassim Nicholas Taleb

10/50/5010/50/50**

*10 days in 50 years = 50% returns*10 days in 50 years = 50% returns

The Black Swan: The Impact of the The Black Swan: The Impact of the Highly ImprobableHighly Improbable, Nassim Nicholas Taleb, Nassim Nicholas Taleb

Forget:Forget: Normal Normal Distributions, Distributions,

Means + Medians Means + Medians + Modes + + Modes + Standard Standard DeviationDeviation

Banking: Banking: 33 = R.O.H.: = R.O.H.: 1982/Default Latin 1982/Default Latin America = Total historical earnings; 1992/S & L; America = Total historical earnings; 1992/S & L;

2002/dot.com2002/dot.com

Las Vegas:Las Vegas: Siegfried and Roy, Siegfried and Roy,

plus a handful of others = plus a handful of others = 1,000X1,000X gambling variabilitygambling variability

Wall Street:Wall Street: “In the last 50 years, the “In the last 50 years, the 1010 most extreme most extreme dadayyss in the financial markets in the financial markets represent half of the returns. Ten days in 50 represent half of the returns. Ten days in 50

years. Meanwhile, we are mired in chitchat.” years. Meanwhile, we are mired in chitchat.”

The Black Swan: The Impact of theThe Black Swan: The Impact of the Highly Improbable Highly Improbable, Nassim Nicholas Taleb, Nassim Nicholas Taleb