Thinking in the Age of the Unthinkable Reut Methodology Day

How we Currently Think: Bell Curve Most data around averageAbility to Predict Events: Pretty Good Likelihood of Outliers / Deviations – very rareSelective Generalizations Work – Patterns Exist

Reality: Power Law : 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 World Dominated by these ‘Improbable’ Black Swans

We live in an Age of the Unthinkable World Full of Irreducible Unknowns Number of Actors Power of States “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) 'once in a hundred years' events every few months. Pace of Change

Relevancy Gap: The Story So Far… Mindset Extremistan: Revolutionary Age of Change Mediocristan: World ‘Ordered’: Models Useful Prediction Possible (Changes Linear) Power Law Bell Curve Disorder: Complex Systems (Sandpile) Black Swans + Tipping Points

Hardwired for Mediocre, not Extreme World 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 Humans are not programmed to understand black swans We have Retrospective Predictability – seeing the world as safe, structured and comprehendible

Dealing with Inability to Predict Monitor Thoughts Cultivate Art of Overhearing Integratively Complex Re-Examine Assumptions

Thinking in the Age of the Unthinkable Mashup Logic Give away power Resilience Adopting Deep Security 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 Learning to focus on our own resilience & the “incredible power of an indirect approach”. Understanding mashup logic is... the first step toward a new, deep security in which our ideas match the world around us

What it means for Reut Policy Units: Structure which facilitates adaptation ‘Sensoring’ to Identify Relevancy Gaps Expertise in Process not Content Working in Teams