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

Reviewed by Rudy Karsan – CEO, Kenexa

The sighting of the first black swan contradicted the ‘unassailable’ belief that all swans are white, showing that sometimes one event or observation can invalidate what has hitherto seemed a watertight fact. Using this analogy, Nassim Nicholas Taleb argues that most significant events in our world are unpredictable, and that when predicting the future, we place too much weight on the likelihood of events repeating themselves. Taleb defines a ‘black swan event’ as one that “lies out of the realm of regular expectations,” which carries an extreme impact, and for which we tend to “concoct explanations for its occurrence after the fact, making it explainable and predictable.”

The basic message of the book is that humans tend to make decisions based on normal statistical distribution. For example, we assume that things will fall within a certain range of outcomes and make decisions accordingly, often ignoring the tails of very low probability outcomes. The reality of the situation, according to the author, is that life is more about low probability outcomes; it makes a huge difference in not just financial circles, but also in the way that people lead their lives. Taleb has drawn on examples of ‘black swan events’ such as 9/11, stock market crashes and the break-up of Lebanon. In a sense, Taleb’s argument brings to mind Malcolm Gladwell’s book The Tipping Point, which talks about how certain events keep developing slowly until they suddenly reach a point where they take off—whether it is a social or a marketing trend. The Black Swan makes excellent reading for someone who is curious about how events are shaped and someone who thinks about the world from a completely different perspective.

Taleb also coins the concept of Mediocristan versus Extremistan. According to Taleb, in Mediocristan everything is plotted on the Gaussian bell curve, while in Extremistan, chaos reigns, the wholly unexpected happens, and we are in extreme mode. The latter, he says, happens more often than we expect. This book is a very enjoyable and thought-provoking read because it breaks you from your normal thought processes and forces you to think. Portions of the book may test your knowledge of math, but overall, it is written in an anecdotal style that is easy to follow and appreciate.

About the Reviewer
Nooruddin (Rudy) Karsan is the Chairman and CEO of Kenexa, a leading provider of employee hiring and retention solutions with over 1,300 employees operating in more than 10 countries. Co-founded by Karsan in 1987, Kenexa has grown organically and through strategic acquisitions, with clients numbering among the largest and most prominent companies in the world. Kenexa’s products have received numerous prestigious awards.

Karsan began his career as an actuary with Mercantile & General Insurance Company in Toronto, after earning a B. Math in actuarial science from the University of Waterloo. At the age of 25, he earned the title of Fellow in the Society of Actuaries. He moved on to co-found Kenexa. Karsan has been publicly recognized for his entrepreneurial achievements and has held a number of leadership roles in the community, including Chairman of Junior Achievement’s board of directors in the Delaware Valley, and President of the Aga Khan Northeast Council for USA.