Fine feathered friends.

At one time Europeans thought that all swans were white. The phrase “black swan” derives from a common 16th century English expression as a statement of impossibility. Then in 1697, Dutch explorers discovered large numbers of black swans in Western Australia.

Raining swans and dogs.

Over time, the term came to be used as a metaphor to describe statistically improbable events with profound consequences. Introduced as the “Black Swan Theory” by statistician Nassim Nicholas Taleb (2010), a black swan event is unpredictable, has extreme effects, and is inappropriately rationalized as predictable with the benefit of hindsight. According to Taleb, black swans happen more often than expected in the financial, social, and natural world.

Detrimental black swans tend to occur rapidly. Some examples include:

• Fukushima and Chernobyl nuclear disasters
• The subprime mortgage crisis (2008)
• The outbreak of Spanish Flu in 1918
• World Trade Center attack (9/11)
• The sinking of the Titanic.

Beneficial black swans tend to occur slowly. Some examples include:

• The Harry Potter craze
• Theory of relativity and quantum mechanics
• The dissolution of the Soviet Union
• Rise of the Internet and the personal computer
• Google.

The future ain’t what it used to be.

Experience shows that doo-doo happens—random, extreme events often overtake the best of plans. Nevertheless, we have a tough time accepting that many realms are beyond our power to forecast. Even retrospectively, many occurrences cannot be explained. In spite of progress and growth, the future for Gen NeXt is increasingly less stable and more unpredictable (see: The times they are a-changin’). That means more swans on the wing.

Black swans affect us personally as well. Consider the significant events, technological changes, and inventions that have taken place since you were born. How many of them did you know about in advance? Look to your choice of profession, where you work, how you met your mate, maybe a lucky windfall, or a severe health problem. How often did these things occur according to plan?

Is thinking for the birds?

Behavioral economics studies how we think influences our personal economic behavior. Since a black swan event cannot be predicted, Black Swan logic makes what we don’t know far more relevant than what we do know. The problem is most of us are content thinking only about what we know. As a result, we underestimate the impact of random chance and uncontrollable events (optimism trap*) that may change the direction and quality of our lives. We are also confident that we can react if something bad happens (superiority trap*).

As we grew older and more experienced, we tend to become more intuitive in our responses. We base more of our decisions on the gist, that is an overall sense or impression of the situation, along with its emotional meaning (see: The big picture). This approach, in which “one sees the forest more than the trees,” enables us to sense the best course of action.

Develop the power!

As events go, the extreme, the unknown, and the improbable are not uncommon. Yet, we overwhelmingly opt for certainty, regardless of whether that certainty is in the present or the future (Pfeffer and Hardisty – 2017). Why is certainty problematic? It can lull us into a false sense of security and predictability. By excessively focusing on what we are certain of, we risk being unprepared for a black swan event. Here are some things you can do:

1. Infinite vigilance is not possible, but resilience is. Developing power over an unpredictable future means being prepared for shocks and stresses that may affect you. Sometimes avoiding a certain outcome is an achievement.
2. Avoid trying to naïvely predict a specific black swan (you can’t). Instead, think about general lessons from previous events. This will help you to adapt more quickly when something radical occurs. Reading the Young Person’s Guide is an excellent first step!
3. The practical goal is not to predict unpredictable events. Rather, we want to build robustness against negative events while maximizing exposure to positive events. Talk to a tribal elder—they have experienced many black swans, good and bad.
4. Evidence shows that we do much less introspective thinking than we believe we do. Compared to your parents, success today requires a lot more imagination. Focus on what makes sense, not just on the facts. Be open to imagining the impossible.

NeXters, no one can predict the future. The aim is to prevent you from getting the future seriously wrong. Don’t be a bird brain!

* Questionable beliefs can “trap” our better judgment, leading to poor decisions and unintended consequences. In the optimism trap, we tend to underestimate the long-term impact of random chance and uncontrollable events on our lives. In the superiority trap, we overestimate our sense of control over events. Learn more about this, and other interesting topics, in the Young Person’s Guide to Wisdom, Power, and Life Success.

Image credit: “Fashion Art Portrait Of Beautiful Girl” by victorias, licensed from 123rf.com (2017).