Life is full of surprises and uncertainty. There often happen things which we haven’t expected. This applies also to our work and the business world. Some of these unforeseen situations may be good. Yet others may be negative. One of them is the black swan effect.
But what is the black swan effect and what does it have in common with businesses? Either large or small companies? Follow up to find out and avoid its consequences. In today’s article, we present how to deal with this problem.
Black Swan Theory
In general, black swan effect is a metaphor which “describes an event that comes as a surprise, has a major effect, and is often inappropriately rationalized after the fact with the benefit of hindsight. The term is based on an ancient saying which presumed black swans did not exist, but the saying was rewritten after black swans were discovered in the wild.”
So what does it have in common with business? Quite a lot. The black swan theory applied to business emerged from the book, written by Nassim Nicolas Tebbem, titled “The Black Swan: The Impact of the Highly Improbable.” Even though the metaphor of the black swan has been in use for centuries, only now with the interpretation of Tebbem it sheds a new light on the business world.
Nassim Nicolas Tebbem is a scholar, statistician, and risk analyst among others. In his book, he applies his approach – analyzing uncertainty and randomness. And this is what contributes to the black swan effect. It’s important to mention that the effect happens in the business world as something that nobody has expected or predicted. The author’s idea of the black swan effect touching the economic market can be described in the following way:
- The unforeseen event takes place.
- The event has a major effect (for example, on a company).
- After the event has happened, there is a hindsight – it is perceived as the happening that could have been expected. However, there was no data available at that time in order to maintain the risk and minimize it.
Why can this concept be applied to a company’s success prediction? Simply, because it can help in avoiding the failure. Especially that in contemporary time it is possible to gather sufficient enough information in order to forecast the risk. Otherwise, the black swan effect can contribute to a company’s failure or even bankruptcy.
How to Avoid the Black Swan Effect?
If the black swan effect is such a devastating for the business, how can a company avoid it? According to Tebbem, it’s important to focus on the positive sides of the company. This can help in avoiding the black swan effect. However, it may be too late for a company to find these positive sides if it doesn’t have enough data, so important in evaluating and managing the risk. So how to avoid the black swan effect? What measures should a company take?
One of the best solutions is the implementation of time tracking software. It may seem quite irrelevant. Time tracking software and the black swan effect? What could possibly these two elements have in common? But, in fact, using time tracking software can be crucial in predicting the risk and preventing the black swan effect.
Time Tracking vs the Black Swan Effect
With the use of the proper time tracking, such as TimeCamp, you can effectively prevent the black swan effect. Here’s how.
TimeCamp can serve as your personal data collector, especially if you’re the company’s CEO, project manager, or a leader. Because it’s not only a simple time tracking software. It gathers all information considering your company’s performance. TimeCamp tracks your team’s work, their productivity, and work progress. Extensive and comprehensive reports provide you with insight into what’s happening so that you can always change the due date of particular projects, delegate tasks, and allocate work hours to specific people on the team. The feature of budgeting and billable and non-billable hours helps you to keep a hand on company’s funds.
So no matter what happens, you always stay on top of your work. This helps in keeping things balanced and you don’t have to worry about anything unexpected.
Wonder how TimeCamp works? Watch the video below!
Conclusion
Time tracking software can be extremely helpful in assessing the company’s risk. And when you know what are the risks, you can make adequate and, most of all, smart decisions. It is worth to invest in such a tool and keep the company under control than be the victim of the black swan effect.