Long before Bollywood assigned to pigeons the privilege of carrying Cupid’s messages (remember the Salman Khan starrer, Maine Pyar Kiya and that immortal song Kabootar Ja, Ja, Ja sung by Lata Mangeshkar?), the role was filled to perfection by swans. Or so one should think, if the ancient Indian classics are anything to go by.
For thousands of people from an earlier generation, the life and tortuous path of mutual love between Damayanthi, the princess of Vidharba, and Nala, the king of Naishadha, that nestled somewhere in present-day Bundelkhand, in Uttar Pradesh, is all too familiar.
The white swan
Raja Ravi Varma captured a slice of this love story in an oil painting, where Damayanthi is receiving her first intimations of Nala’s interest in her through a message conveyed by a swan from the latter’s royal garden. It is perhaps not fashionable art by modern standards. But there was a time when no middle-class home was deemed complete without a framed lithographic replica of that oil painting adorning its walls.
Such was the effect of Ravi Varma’s painting in popular imagination that the average Indian, even today, thinks of swans as bedecked in feathers and coated with such a vivid shade of white as to be the envy of any modern-day detergent manufacturer.
The reality
In this, they were of a piece with 18th century Europeans who, too, thought swans were synonymous with the colour ‘white’. It required an Austrian mariner and explorer to put them wise to the fact that regions of Western and Eastern Australia are home to a rare sub-species of swans, whose plumes are streaked in jet black, barring the wing tips.
‘Black swan’ or, rather, an association of the colour ‘black’ with ‘swans’, would thus have remained, at best, at the periphery of public consciousness of all but a small community of ornithologists and the most avid bird-watchers.
But the phrase has since acquired an altogether different meaning, thanks to Nassim Nicholas Taleb, the well-known US-based statistician and professional analyst of ‘risk’. His book Black Swan appeared, quite propitiously, months before the global financial crisis shook the entire world. Not just in financial terms but in political terms as well.
What it actually means
Today, the expression ‘Black swan’ has come to denote three things.
One : It refers to all outlier events which, by their very nature, defy prediction (at least, using conventional tools of forecasting/estimation).
Two : When they do occur, their impact on society tends be extremely large.
Three : Human nature makes us come up with explanations for its occurrence and more importantly, come up with answers as to how it could have been prevented. This last bit is particularly significant. Our tendency to assume that even outliers are, by some magic, capable of being fitted into models of conventional analysis is endemic.
The example: Global financial crisis
We saw that in the case of the global financial crisis. After the crisis erupted, every analyst and critic worth his salt chimed in with the claim that if only banks had had better risk management systems, or if regulators had been more vigilant and increased the capital adequacy norms for banks commensurate with their exposure to outstanding derivatives contracts, the crisis would not have happened.
But the reality is quite the opposite. Bankers could no more have been restrained from taking on more exposure than if they had been lemmings trying to run away to a distant land (even if it meant falling off a cliff into water) because they think there is food aplenty. Similarly, regulators could no more have seen the size of the problem than a blind man see his way forward if a torch had lit his path.
Same with Chennai rains
And so it is with all those experts and the rains in Chennai.
No sooner had the rains taken a restful pause of a day, than these critics were out in full force, full of claims on ‘what if’ and ‘what might have been’, instead of recognising the rains for what they actually were: A ‘black swan’ event, no less.
The moment you refuse to see it as such, it was only a matter of time before one came up with theories on how all this was perfectly capable of being anticipated and conventional tools would have easily provided an acceptable solution to handle it.
One such claim is with regard to the water level at one of the city reservoirs for supply of water. If only the water level at the ‘Chembarambakkam’ lake had been kept at two feet lower than what it was maintained at, the city wouldn’t have been flooded to the extent that it did, claimed many. A simple calculation of water accumulation based on the rate of water flow can easily show how flawed this assertion is.
If water was flowing in at the rate of 25,000 cusecs for well over 36 hours into the lake during those fateful days in the first week of December, effectively, the water equivalent to a full reservoir would have accumulated and pretty much all of that would have had to be let out as the water level reached close to its maximum. At that rate of flow (25,000 cubic feet of water per second), the lake would have accumulated 0.5 tmcft (thousand million cubic feet) of water in the space of just six hours — that is, roughly, a fifth of the reservoir’s storage capacity.
The other angle
We can also look at this phenomenon from another angle. A huge amount of rain water was dumped in a narrow stretch of land comprising the metropolitan area of Chennai and its surrounding districts, registering a near 100-year record. The moisture-laden winds coming in from the North-East, feeding the trough of low atmospheric pressure, had this narrow funnel of land into which all that water had to be dumped.
On the other hand, if the ridge of high pressure been even a degree to the north of the Chennai latitude, the winds would have had a larger area of land mass to spread out and the precipitation would have been diffused around a wider arc of land, sparing Chennai just that bit more. Now, who could have predicted that the ridge of high atmospheric pressure sitting above the Chennai latitude would have stayed as long as it did? The best that climatologists would have been able to say is that as long as that ridge stayed the way it did, the city would experience heavy rainfall. But that is small comfort when it comes to decisions on the level of water that could safely be maintained in a reservoir supplying drinking water to the residents of Chennai.
Not a clean chit
However, none of this should be construed as giving a clean chit to the local administration in the matter of mounting rescue and relief operations or in restoring civic infrastructure to minimum functional levels. Heaven knows, there was a lot more that could have been done by public officials but just didn’t get done adequately enough or in time.
But that shouldn’t obscure us to a simple fact that there are times when one can manage the external environment and other times when we must just hunker down and allow the storm to pass us by. The existence of outlier events (‘black swans’) does not negate the utility of structured models explaining real world behaviour in the business arena and rational methods of countering it.
Simultaneously, managers must also acquire the sensitivity to recognise when events happening around them are not played out from an established business model.
The recent Chennai floods have only served to reinforce the validity of that dictum.