As a preface to this blog entry, forget about the strict definition of redundancy found in the Oxford English dictionary that tells you redundancy means ‘no longer needed or useful’. As will become clear – I hope -, redundancy is needed to have an option to maneuver when things happen that you could not possibly have predicted. In other words, redundancy gives you optionality. See redundancy not as superfluous but as an insurance. Or, as an investment even.
Projects fail to meet deadlines and budgets all the time. While rereading random passages in Nassim Taleb’s stimulating and provocative books The Black Swan and Antifragile, it struck me that I always try to build a little redundancy in project plans because ‘you never know what will happen’. Almost never taking time to consider the rationale behind my sub-conscious whispering ‘you never know what will happen’.
Taleb shares some nice insights on the reasons why redundancy (in general) is useful. I hope reading this blog entry will make you look at redundancy – and the world – from a somewhat different angle. (In a way, it is what this blog is all about: discussing concepts and tools that change the way you look at the world. Remember Proust? ‘My destination is no longer a place, rather a new way of seeing.’)
I will discuss two of Taleb’s concepts that will make it easier for you to include some well contemplated redundancy in your future projects. Including redundancy will definitely increase the success rate of your projects. But, you need to be able to explain why you included it in your budget. Here’s how to do that.
Concept 1: the world is more random than you think
Taleb constantly challenges you on how you look at the world. One of the main themes in his books is that the world is more random than we think, and that we are often fooled by this randomness. In Antifragile he argues:
Black Swans (…) are large-scale unpredictable and irregular events of massive consequence – unpredicted by a certain observer (…). I have made the claim that most of history comes from Black Swan events, while we worry about fine-tuning our understanding of the ordinary, and hence develop models, theories, or representations that cannot possibly track them or measure the possibility of these shocks.
Black Swans hijack our brains, making us feel we “sort of” or “almost” predicted them, because they are retrospectively explainable. (…) Life is more, a lot more, labyrinthine than shown in our memory – our minds are in the business of turning history into something smooth and linear, which makes us underestimate randomness.
In The Black Swan, Taleb claims that large scale events cannot be predicted (and are in effect random to the observer):
I discovered (…) that no researcher has tested whether large deviations in economics can be predicted from past large deviations – whether large deviations have predecessors, that is. (…) My results were that regular events can predict regular events, but that extreme events, perhaps because they are more acute when people are unprepared, are almost never predicted from narrow reliance on the past. The fact that this notion is not obvious to people is shocking to me. It is particularly shocking that people do what are called “stress tests” by taking the worst possible past deviation as an anchor event to project the worst possible future deviation, not thinking that they would have failed to account for that past deviation had they used the same method on the day before the occurrence of that past anchor event.
In Antifragile, he goes as far to call this a mental defect:
I have called this mental defect the Lucretius problem, after the Latin poetic philosopher who wrote that the fool believes that the tallest mountain in the world will be equal to the tallest one he has observed. (Note: Read the wonderful poem on science and philosophy by Lucretius called On the Nature of Things. In the 2007 Penguin edition, the translation of the passage Taleb is referring to actually reads as follows: “And any stream will seem to be, to one who’s never seen a larger, the greatest of rivers (…). Indeed, anything we see, we shall imagine, is the largest specimen of its kind if it’s the largest we’ve laid eyes on.”)
So, taking into account that randomness is a fact of life and we cannot predict big events, there needs to be some redundancy to counter for this. The next time you sit down and think through the things that can hurt your project plan, think ‘randomness’ and ‘Lucretius problem’.
Concept 2: the world is more random than we lead ourselves to believe
A second reason why you need redundancy – there might be more reasons, but my aim here is to introduce two new ways of looking at the world offered by Taleb – is the narrative fallacy. Planning is nothing more and nothing less than a narrative – a story – you create around your project based on your previous experiences with projects. You want this story (the budget and the planning) to unravel according to plan. You take with you all the things – the good and the not so good – that happened in previous projects, create a narrative why this happened, and include that knowledge in your current plan. I wrote about narratives and stories before in my blog entry Successful Businesses and the Halo Effect. It’s almost as if rereading Rosenzweig’s comments on stories in the Halo Effect when Taleb writes:
We like stories, we like to summarize, and we like to simplify, i.e., to reduce the dimension of matters. The first of the problems of human nature that we examine in this section (…) is what I call the narrative fallacy. (…) The fallacy is associated with our vulnerability to overinterpretation and our predilection for compact stories over raw truths. It severely distorts our mental representation of the world; it is particularly acute when it comes to the rare event.
And:
If narrativity causes us to see past events as more predictable, more expected, and less random than they actually were, then we should be able to make it work for us as therapy against some of the stings of randomness.
Needless to say, Taleb argues that we are ill prepared for randomness and will always be fooled by our tendency to attach an explaining narrative to events in the past. The narrative, however, will never prepare you for events in the future.
Redundancy as buffer against unforeseen events
The combined effects of randomness of the environment, the Lucretius problem, and the narrative fallacy create a background where you can easily underestimate the impact of unforeseen events in your project (or business plan, or – even – life itself). Build in some redundancy and use the concepts discussed here to rationalize your hunch that tells you: ‘you never know what will happen’. It’ll make your project plans more robust and realistic, and it’ll give you options. A final word from Antifragile:
Redundancy is ambiguous because it seems like a waste if nothing unusual happens. Except that something unusual happens – usually.