The seemingly
indestructible baseball legend Satchel Paige asked, “How old would you be, if
you didn’t know your age?” *

I’ve worked during
this summer vacation to review and refresh the syllabus of my MBA-level course
in risk management and decision-making, where the related question is, “How
smart can you be, if you don’t know your own ignorance?”

At its core, the
course seeks to identify potentials for success, from the lessons of failure. Recent
weeks have provided an abundance of “teaching moments”:

• Tony
  Hayward’s long-postponed but inevitable defenestration as CEO of BP – another
  demonstration that public perception of a tone-deaf executive’s culpability
  will prevail – incidentally inflicting major collateral harm to what had been
  an advancing discussion on the benefits of splitting the roles of corporate
  chairman and chief executive.
• By
  contrast, Goldman Sach’s achievement of a speedy and affordable settlement of
  the SEC’s suit over a toxic subprime mortgage-based derivative product, for the
  relative pittance of $550 million. Love or despise the “vampire squid” –
  Goldman will survive and thrive in no little part for its ability to maintain
  both calm and quiet under pressure, keeping beneath the flame-throwing and appreciating
  the benefit of avoiding additional fueling of the short-lived news cycle.
  
• The
  release by WikiLeaks of a massive volume of raw documentation from the Afghanistan
  war. The trove will be well-combed by future historians, but even on a
  superficial reading of the official manipulations, naïveté and mendacity, the
  fundamental lessons remain unlearned — from China, Algeria, Viet Nam and
  Afghanistan itself — that short of annihilation, no level of mighty foreign
  military technology will prevail in a house-to-house conflict against forces
  able to blend seamlessly into a village-level local population.

Thinking with
students about these scenarios, with special concern for the availability of
awareness and action in time to actually affect an outcome – that is, before
the inflection point at which a threat tips over to become a disaster – there emerges a
kind of hierarchy of learning opportunities. Consider: 

• As the
  last of the helpless dinosaur population dwindled around the tar pits, while
  tiny furry mammals disported at their feet, the combination of climate change
  and evolution reduced their survival chances to zero.
• Innocent
  species lacking defensive measures were equally doomed – including those wiped
  out by humans, from carrier pigeons to the great whales.
  
• Human
  societies also innocent in their ignorance have doomed their viability –
  whether the Easter Islander destroying their only timber sources to replace
  their great canoes, or the Greenland settlers unwilling to adopt the diets and
  hunting techniques of the natives (see
  Jared Diamond’s “Collapse,” 2005).
• Further
  up the ladder of chargeable responsibility is the blinkered denial built into
  herd behavior – no better exemplified than by the last-gasp claim of
  Citigroup’s Chuck Prince in the summer of 2007, that, “As long as the music is
  playing, you’ve got to get up and dance.”
  
• And
  finally – or at least to stop just short of conduct warranting indictment –
  there is the evidently deliberate and self-interested exploitation of the
  credulous, wrought by Goldman and its now-isolated foot soldier, Fabrice
  Tourre, in designing a financial derivative with characteristics maximizing its
  likelihood of failure.

As I would like my
students to learn from such an array, in daily life no less than in the classroom,
the ability to avoid the next problem is measured by the capacity to take heed
from the last. 

*My review last May of Larry Tye's delightful biography of Paige is here. 

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