(r)evolution is thrilled to welcome Steve Jones as a Principal. Steve is the former CMO of The Coca-Cola Company where he reported to the Chairman and oversaw one of the world’s most loved and recognized beverage brands. There he focused on creating growth by diversifying the product portfolio through aggressive new organic product development and acquisitions.

Steve has held many roles, both in the public and private sector, over his successful career. Early in his career, Steve managed some high growth brands, including Huggies diapers and Kleenex paper products at Kimberly-Clark. He then spent eighteen years at The Coca-Cola Company in various roles, including, Sr. Brand Manager of Diet Coke, Marketing Director of Coca-Cola Great Britain, Region Manager, President of Coca-Cola Japan, CEO of The Minute Maid Company and Chief Marketing Officer.

In addition to his marketing and business operator background, Steve brings diverse experiences with private equity deals and several small/midsize business endeavors in the past seven years. He served as CEO of Ace Bakery, a private $20 million gourmet bakery and, most recently, as CEO of Jones Soda Co., leading the turnaround of the struggling new age beverage company.

Now at (r)evolution, Steve hopes to push our thinking and further refine our practice areas to be even more relevant to the evolving business landscape. He will also help provide our clients with a new perspective on approaching growth creation and provide a range of expertise that can help us to deliver better and more actionable strategies. With his senior strategic leadership skills, diverse global experiences and recent entrepreneurial activities, Steve will help us grow stronger, smarter and more focused in order to continue our role as thought leaders in growth creation and to provide the highest quality solutions for our clients.

We welcome everyone to connect or reconnect with Steve directly. Alternatively, a member of our team will be happy to make an introduction.

“Honey, I swear—I saw black swans!” Byron was back from his journey exploring the Pacific, and was adamant about what he had seen. But his wife Patricia knew better. “No.  Everyone knows that all swans are white. It’s common knowledge.” Patricia was right because all swans in Europe were white and all empirical evidence supported her beliefs. But it turns out that everyone was wrong. Europeans couldn’t have predicted the discovery of black swans in Australia, but they had to immediately change their beliefs with one simple discovery.

So-called Black Swans - rare, unpredictable events - as described by author Nassim Taleb provide opportunities for massive gains or massive failures. Taleb describes these events as having three primary characteristics:

1)    Black Swans are outliers with low probabilities. These events lie outside the realm of normal expectations. They can’t be readily predicted, even using sophisticated models.

2)    Black Swans have extreme impact. These events change something fundamental about the world – either in terms of economic or social costs. Although the discovery of black swans in Australia might not have had this kind of impact, World War I and September 11th certainly did.

3)    In hindsight, Black Swans are very easy to explain. One example is the recent financial crisis of late 2008. As Taleb explains, today many people claim they saw the crisis coming, but these same individuals also held bank stocks, showing that indeed only hindsight is 20/20.

Black Swans are everywhere. These types of events define our modern history from stock market crashes to terrorist attacks to world wars to banking crises. But Black Swans don’t necessarily have to be negative, they can be positive as well.

Positive Black Swans might include new technologies – such as the Internet, runaway bestsellers or blockbuster drugs. Who knew that a communication protocol used by the military would transform into the World Wide Web and change the way society works? In the same manner, who knew that a potential hypertension medicine would change the love lives of millions of people around the world?

How do Black Swans factor in the business world?

Taleb is critical of many modern management and financial techniques in which companies fool themselves into thinking that they can control or predict their future with great certainty. He argues that it is impossible to predict or control Black Swan events, which are often the greatest source of value creation. Instead, he suggests organizations should try to optimize for:

•    Maximizing the chances for positive Black Swans to occur: Companies accomplish this through taking risks while minimizing the costs associated with those risks. Taleb would argue that companies should take all the “cheap” risk they can because being aggressive will ultimately create economic growth. In gambling terms, he wants to be that hyper-aggressive gambler who understands all of the best bets at the casino, always risking a small amount as long as the payoff is maximized. As Taleb says, “learn to fail cheaply, with pride, comfort, and pleasure – and do it often”.

•    Minimizing the chances for negative Black Swans: Since negative Black Swans can come in many forms such as economic crises, terrorist attacks, or even consumer backlash, it is difficult to be specific on this topic. Taleb would argue that companies should be hyper-conservative on downside risk, shying away from huge bets that have the potential to be very costly.

In short, Taleb thinks most companies have it wrong. In a recent interview, he said “Be hyper-conservative when it comes to downside risk yet hyper-aggressive when it comes to opportunities that cost you very little. Most people have the wrong instinct. They do the opposite.”

Sources:

Webb, Allen. “Taking improbable events seriously: An interview with the author of The Black Swan.” McKinsey Quarterly, December, 2008

Taleb, Nassim. “The Black Swan.” Random House, Inc., New York, 2007.

Gladwell, Malcolm. “Blowing up.” The New Yorker, April 22 & 29, 2002.

Image Source: ianmichaelthomas