Guess What? Your Business Isn’t Invulnerable

Fooled By Randomness

In his 2001 book, Fooled By Randomness, Nassim Nicholas Taleb deploys the concept of “alternative histories,” the things that could have happened as a result of chance but did not. Had these things occurred, one’s own history would have been very different. There are certain events, through the application of conscious effort, that we can avoid. In this way, we actively shape our own futures and can take responsibility for them.

There are myriad things, however, that have an enormous impact on our lives over which we do not exert any conscious control. This is generally a disagreeable thought to most people. They don’t like the notion that their very life or success is dependent upon contingency and so most everyone exerts a great deal of mental and emotional effort trying to deny this reality. Dealing with insecurity and ambiguity in a constructive manner is not, to put it lightly, one of the strengths of humanity. Better to do something, even if it is wrong or destructive, rather than nothing at all.

Part of the reason for this is the fundamental narcissism of individuals. This is a critical part of our evolutionary adaptation but doesn’t serve us well in appraising our own abilities. We like to think that there is some special about us that enables us to succeed. I think this stems from the fear of uncertainty. We like to believe that we are capable of pulling ourselves out of a failure or overcoming uncertainty if we encounter it. This faith in our own capacities leads to all sorts of stupid decisions, particularly through the act of ignoring something. We don’t like to consider that we may have missed something.

But this is an absolutely critical thing to do. Indeed, it wasn’t curiosity, but ego, that killed the cat. Contrary to our most passionate beliefs, we are not always right. We are often wrong or right because of different reasons. We are not omniscient and so can’t see everything coming. Effective thinking, therefore, requires puncturing of the ego that leads us to think that we are always right or possess a full understanding of a problem.

The Power of a Red Team

This is hard, if not impossible, to fully do. There are some organizations that dedicate themselves to the removal of ego from decision-making processes. My former employer, Bridgewater Associates, is one of them. But if you are not willing to invest the requisite amount of energy into processes that do so, and it is a very significant amount of energy, then you have to find out a way to harness egoism to puncture certainty. I think there is a very helpful tool that can be applied: the red team.

A red team is an individual or group of people within a company or organization, that attempt to punch holes in the assumptions and arguments that justify or underlie the core initiatives of that company or organization. It is a group that exists to demolish idols. It pitches the ego of the red team against that of the organization and in doing so deflates both. This can help decision-making immensely. Unless you believe your organization is invulnerable, (news flash: it isn’t) then you can benefit from a red team. This is especially true in the cybersecurity space, and it is not a coincidence that one of the great users of red teams is the US intelligence community.

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