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Thinking in the Age of the Unthinkable. Reut Methodology Day. How we Currently Think: Bell Curve. Most data around average. Ability to Predict Events: Pretty Good. Likelihood of Outliers / Deviations – very rare. Selective Generalizations Work – Patterns Exist. Reality: Power Law.
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Thinking in the Age of the Unthinkable Reut Methodology Day
How we Currently Think: Bell Curve Most data around average Ability to Predict Events: Pretty Good Likelihood of Outliers / Deviations – very rare Selective Generalizations Work – Patterns Exist
Reality: Power Law World Dominated by these ‘Improbable’ Black Swans Most Nodes: Handful of Links ‘Average’ not useful in describing distribution : Few Products or People: Possess bulk share (Hubs) Selective Generalizations Dangerous Outliers / Large Deviations not exception: happen more often than we think
We live in an Age of the Unthinkable Number of Actors Power of States Pace of Change World Full of Irreducible Unknowns 'once in a hundred years' events every few months. “most marked feature is a departure from the idea that our world can be reduced to simple models, that the real dynamics of the world make prediction nearly impossible” (Joshua Cooper Ramo)
Relevancy Gap: The Story So Far… Mediocristan: Extremistan: Revolutionary Age of Change Black Swans + Tipping Points Prediction Possible (Changes Linear) Disorder: Complex Systems (Sandpile) World ‘Ordered’: Models Useful Power Law Bell Curve Mindset
Hardwired for Mediocre, not Extreme World Humans are not programmed to understand black swans We have Retrospective Predictability – seeing the world as safe, structured and comprehendible Confirmation Bias Tendency to Reaffirm beliefs rather than contradict them Narrative Fallacy Our weakness for compelling stories (patterns where they aren't there) Silent Evidence Failure to account for what we don’t see (history hides Black Swans) Ludic Fallacy Willingness to oversimplify & take games or models too seriously Epistemic Arrogance Habit of Overestimating Knowledge & Underestimating Ignorance
Dealing with Inability to Predict Monitor Thoughts Integratively Complex Cultivate Art of Overhearing Re-Examine Assumptions
Thinking in the Age of the Unthinkable Adopting Deep Security Give away power Mashup Logic Resilience Understanding mashup logic is ... the first step toward a new, deep security in which our ideas match the world around us Learning to focus on our own resilience & the “incredible power of an indirect approach”. Radically refiguring the balance sheet of power in such a way that the aim isn’t to hoard power but to give away as much of it as possible
What it means for Reut Policy Units: Structure which facilitates adaptation ‘Sensoring’ to Identify Relevancy Gaps Expertise in Process not Content Working in Teams