March 7th, 2013

What Can We Learn From Nassim Nicholas Taleb, Shell Oil, and Derek Jeter?

By Ron Nakamoto

nnicholastalebNassim Nicholas Taleb warns that much of modern life is subject to randomness and unpredictable events. His new book “Antifragile” points out that many of our daily living strategies are “fragile” in the face of this randomness and unpredictability. He juxtaposes these “fragile” elements with “robust” elements that are resilient and “antifragile” elements that gain from disorder. The question then becomes how do we structure our lives to become more robust and antifragile? The answer to this question may lie in a planning strategy developed by Shell Oil.


Shell has developed its planning methodology called “Scenario Planning” in an effort to address the randomness, disorder, and unpredictability it faces as a global energy company. “The Era of Volatile Transitions” described in the video above, holds the promise for potentially positive and negative outcomes; it all depends upon how events, technology, politics, economics, and a myriad of other influences unfold in the future. I believe that human beings are pattern-recognition, story-telling, questioning creatures. Scenario planning is a method based upon these human traits in order expand perception and thinking.

If we were to apply scenario planning to entrepreneurs and their families, it would alter the way planning is traditionally done. Existing planning is based largely on observation and logic, using mathematics and/or statistical analysis to project current reality into the future. And while there is great value in these techniques, there remains an inability to adequately address randomness, disorder, and unpredictability by using them. Scenario planning holds the potential to address this inadequacy. It also has the potential to address another trait of entrepreneurs: one exemplified by Derek Jeter, the future-Hall-of-Fame shortstop for the New York Yankees.


This is an excerpt from the article, “Derek Jeter’s Secret Sauce” http://goodmenproject.com/sports-2/derek-jeters-secret-sauce/

“…Derek Jeter uses a secret weapon that perhaps he might not even be able to describe. A sauce more powerful than whatever (Alex) Rodriguez has allegedly been putting into his body. His secret sauce is unwavering optimism—more specifically a strong optimism bias that causes a person to believe they are less at risk of experiencing a bad outcome compared to others.

Tali Sharot, a leading expert on optimism bias, points out in this great TED Talk, that optimism bias causes people to grossly underestimate their chance of getting divorced, losing their job or being diagnosed with cancer, for example. In Jeter’s case, I would contend that he’s mastered the mental part of the game by convincing himself that despite the reality that he’ll fail 70% of the time, every time he goes to the plate it’s more likely that he will succeed and the pitcher will fail. The difference between Jeter and Rodriguez (and many other players) is that Jeter never wavers in his belief; he’s always a tough out because he’s always locked-in…

… There exists, however, as Sharot points out, a major downside to optimism bias, if it is left unchecked. The same optimism that can drive a person to achieve something they didn’t think possible could also lead to disaster via unrealistic planning or forecasts…In Jeter’s case, optimism that he could play and contribute through his clearly debilitating ankle injury during September/October of last season led to him breaking his ankle on a routine play in Game 1 against the Detroit Tigers in the League Championship Series, and major off-season surgery.”

Many successful entrepreneurs suffer from this optimism bias. That’s where Shell Oil and Nassim Nicholas Taleb can help. By building scenarios that tell stories that go beyond data and logic, we can begin to visualize more tangibly the dangers and opportunities that we might not ordinarily notice or take seriously. In turn, this sets the stage for proactive planning and action.

The alternative is to base one’s strategy on the logical extension of the present, subject to a range of foreseeable probabilities…and a good dose of hope. But as the future becomes more volatile and uncertain, the emphasis in this sort of strategy shifts from logic more to hope. And is hope really a strategy?

One Response to “What Can We Learn From Nassim Nicholas Taleb, Shell Oil, and Derek Jeter?”

  1. Jay Paterson

    I hope I have optimistically covered all the scenarios

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