Black Swans and the Rise of the Outsider

I was lucky enough to get to present at GALA 2019 in Munich a couple of weeks ago. I travelled to Munich with Malon Hamoen, the CEO and founder of Ludejo. Ludejo organised a fundraiser for Translators Without Borders, which I have to be honest, took a lot of my focus in the lead up to the conference. Thankfully I received plenty of support from Malon as well as the moderators for my session, Dave Ruane and Latha Sukumar (both founts of knowledge). I also want to thank the the program committee at GALA for taking a chance on me (thanks Sabina)!

My name is Andrew Hickson and I am helping to organise the fundraiser for TWB – but I don’t work for TWB. If you don’t have a ticket…

I work for Ludejo

Ludejo means 'Playground' in Esperanto.

What was the best decade for music? If you had to choose, which decade would you go for? What era do you yearn for? I’d like to get a quick show of hands. Who here thinks the best music comes from the 1980’s? What about the 1970’s? Anybody here in favour of the 1990’s?

The central thesis of my presentation today is that:

Localization companies have to be able to adapt to change, and ideally, they will learn to be proactive in their implementation of new policies

It can be summed up in this quote from the scholar and statistician Nassim Nicholas Taleb:

“If the past, by bringing surprises, did not resemble the past previous to it”, what we can call past's past, “then why should our future resemble our current past?” - Nassim Nicholas Taleb

I was born and raised in the Republic of Ireland, and I moved to the Netherlands in 2001. My academic background is in cross-cultural management. I have a Master of science from the Radboud University in Nijmegen, where I did my thesis on work ethic and burnout. When I finished my studies, I opened a bar in the Netherlands and spent 6 years keeping my head above water. I went bankrupt.

I decided that after the years of study, and a failed business, I should try put my degrees to use. I applied for a job as an in-house translator with another Dutch LSP. Got the job. Discovered I was a pretty poor excuse for a translator, but thankfully I was given the opportunity to prove my worth elsewhere in the company, specifically sales and marketing.

I don’t have a linguistic background. I’m not a translator or a project manager. But I have always felt “international”. Change, if it is driven by a personal choice, can be incredibly powerful. It was exhilarating to find myself in an industry where I was free to explore other cultures and working with someone who encouraged me to engage my creative side as much as possible. When Malon decided to start Ludejo, I was more than happy to follow her into the unknown. It was a choice I made for myself. It was exhilarating and it was terrifying, and I’d do it again in a heartbeat. That, in a nut shell is how I ended up working in the Localization industry.

I was born and raised in Tralee, Co. Kerry in the southwest of Ireland. My dad is from Auckland New Zealand, and so I am lucky enough to have duel citizenship. I’m Irish and I’m a Kiwi. 

My claim to fame when I was growing up was that my granddad had sat next to Sir Edmund Hillary all the way through high-school. Kids at Auckland Grammar School kids were seated alphabetically so Hillary and Hickson… 

How many of you jog/run/pound the pavement etc?

I want to introduce you to another Kiwi today. Arthur Lydiard.

Arthur was born in 1917 (2 years before Sir Edmund or my granddad).

I would be amazed if anybody here has ever heard of Arthur (Dave knew of him, which I was very impressed by - see, Dave Ruane, an absolute fount of knowledge!)

Arthur invented the concept of jogging… well, as we know it today – regular people running on the streets.

He drove the police mad initially.

Think how weird it looked to the police. You suddenly see someone running in the street. Or a group of people running in the street…

Lydiard was a strong promoter of running for health, encouraging easy distance running for its cardiovascular health benefits at a time when people thought distance running was unhealthy and potentially dangerous. In 1961, with his group of followers, Lydiard organised the Auckland Jogging Club, a world first. During Bill Bowerman’s (NIKE) New Zealand visit with his world class 4×1 mile team, Lydiard organised for Bowerman to go on a jog with one of his members, three time heart attack-recovered Andy Steedman. Bowerman in his fifties struggled to keep up with a man twenty years his senior, and following his return to America took jogging to Hayward Field and eventually the masses. 

Black Swan Theory

Until Australia was discovered, people were convinced that all swans were white. Before 1770, the idea that swans were not white, had simply not been challenged, and so the belief in the certainty that swans were white was absolute.

The Black Swan Theory is a metaphor that 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 phrase "black swan" derives from a Latin expression; its oldest known occurrence is from the 2nd-century Roman poet Juvenal's characterization of something being "a rare bird in the lands and very much like a black swan". When the phrase was coined, the black swan was presumed not to exist. The importance of the metaphor lies in its analogy to the fragility of any system of thought.

“There’ll be white blackbirds before I ….”

One single observation can invalidate a general statement derived from millennia of confirmatory sightings of millions of white swans. All you need is one single black bird. The term subsequently metamorphosed to connote the idea that a perceived impossibility might later be disproven.

As Nassim Nicolas Taleb explained, a Black Swan is an event with the following three attributes:

·     A black swan event is an event that is unpredictable to the observer.

·     A black swan event results in severe and widespread consequences.

·     After the occurrence of a black swan event, people will rationalise the event as having been predictable (known as the hindsight bias).

Taleb regards almost all major scientific discoveries, historical events, and artistic accomplishments as "black swans"—undirected and unpredicted. He gives the rise of the Internet, the personal computer, World War I, the dissolution of the Soviet Union, and the partial meltdown of the reactors at Fukushima in 2011, as examples of black swan events.

Real Life Examples of Black Swan Events:

1.    9/11 Attacks

Nobody imagined that multiple commercial jet liners could be hijacked and effectively turned into missiles. But in 2011 they were, with catastrophic effect. The attack on the Twin Towers of New York’s World Trade Centre prompted the closure of the NYSE and NASDAQ on the morning of September 11, 2001. Stocks plummeted during the first trading week after 9/11 – $1.4 trillion dollars in stock market value were lost within a week.

2.    The 2008 Global Financial Crisis

The global financial crisis in 2008 caused Lehman Brothers to file for bankruptcy – the largest bankruptcy filing in history. Over 25,000 Lehman employees went jobless and more than $46 billions of Lehman’s market value was wiped out. In total, over $10 trillion dollars was eventually wiped out in the global equity markets.

3.    Brexit

In June 2016, news of the British referendum result to leave the European Union caught many by surprise. It caused the British pound to sharply drop to a 31-year low against the dollar. The Brexit vote wiped out nearly $2 trillion of value in global markets.

Change Management

When we talk about personal change, or self- transformation, it’s often spoken of in glowing terms. I mean look at self-help books: “Awaken The Giant Within”; “Learned Optimism, How to Change Your Mind and Your Life”. I know the changes I have undergone over the last 6 years have been literally life-changing. But we’re not here to talk about personal change. I want to talk about organisational change. 

There are a lot of theories as to why change management in an organisation can be difficult. If I talk about transformation in an organisation, or just mention the phrase “change management”, its sounds awfully like a euphemism for “layoffs”, right? We’re undergoing internal transformation with a focus on streamlining our synergistic strengths to better service our shareholders and energize our people to do more.

If I can generalize for a minute, people are slow to embrace change. Change is hard. Especially when it is imposed on people. If leaders wait for Black Swan events to take place, any change that you implement will be reactive. It will come from a place of chaos. Crisis management. Sure, you can focus on the question and fix the problem in the short term, but it doesn’t address the issue of change long-term, and it will be exhausting. Constantly working from a reactive place will leave your employees exhausted, demotivated and on the verge of burnout. All you’re doing is working with the hope that you can go back to “business as usual” sometime soon… 

Punch magazine – Tyranny of the Telephone

In the early 1970s people were genuinely worried that having a personal phone in your office would destroy productivity. 

I just want to briefly introduce the concept of nostalgia.

The word nostalgia is learned formation of a Greek compound, consisting of nóstos , which means "to return home", and álgos , which means "pain" or "ache". The term was coined by a 17th-century medical student, Johannes Hofer, to describe the anxieties displayed by Swiss mercenaries fighting away from home. Nostalgia is associated with a wistful yearning for the past, its personalities, and events, especially the "good old days" or a "warm childhood". The idea that that’s not how we do things around here. People can get very comfortable in their set routines. Have you ever heard someone talk about the good old days in translation, when a translator was paid a decent wage and machines weren’t destroying the job?

The music we hear today from the 60s, 70s etc is filtered down to the best examples from those decades. Don’t forget there was loads of shit in those decades as well. “Do do do, da da da…” “my ting-a-ling… etc”… For every Bohemian Rhapsodies, there are 50 songs like “I’d Rather Jack by the Reynolds Girls. Simply awful.

Let’s jump back to NZ for a second. Imagine you can time travel.

1917 – Arthur Lydiate has just been born.

68% of the population are employed in agriculture related jobs.

Today that figure is a little less than 7%...

What kind of reaction do you think you would get from people in 1917 if you told them in 100 years’ time only 7% of the population would be working in agriculture? How do you think the other 61% would have reacted?!

Do you think you could explain to someone from 1917 what it is that you do?

What’s it going to be like in 100 year’s time?

Apps photo - Let’s bring it closer to home:

Spotify, ipads, Bitcoin etc… none of these existed in 2007.

What companies or technologies are going to exist in 10 years time? Are you going to be at a conference talking about the threat of MT, or the price per word for your translation services? 

“If the past, by bringing surprises, did not resemble the past previous to it”, what we can call past's past, “then why should our future resemble our current past?”

Personal vs corporate change

The reality of our world, and for our industry in particular, is that because of advances and developments in technology, we exist at a time which calls for companies to adapt to the default position of being in “constant change”. We all need to realise that we are living in an era of constant transformation.  

    4 things to remember

So what do we need to do when you want to implement changes that are empowering and energizing, rather than exhausting?

Put people first

·   Inspire through purpose – not money/operational goals

Inspire through purpose – most transformations have financial and operational goals, these are important and they can be energizing, to leaders, but in order to motivate more broadly, your transformation needs to connect with a deeper sense of purpose. LEGO

Close to being taken over in the early 2000s, they underwent a massive transformation and as of 2017 were one of the leading brands in the world. This transformation was centered on their mission statement:

“Inspire and develop the builders of tomorrow”.

Not, about producing new products.. however:

LEGO has taken a bit of a nosedive since 2017. In fact you could now argue that they are an example of the opposite of the point I am trying to make. They have let 1400 people go in order to streamline and save money because they were producing too many toys that weren't being sold fast enough, and then needed to be stored in warehouses, driving up costs. “There wasn’t enough room to get 2017 toys into the stores, and the toy trade is driven by newness,” the spokeswoman said.

·   Create content

Create content that has the primary purpose of improving the lives of the people in your network and a secondary purpose of driving the sales pipeline. NIMDZI are an amazing example of a company which has clearly bought into this philosophy. From their exhaustive research into the language industry right across the globe, to their podcasts, vlogs and regular articles, everything is aimed at providing value for "the masses" within the localization industry.

·   Enable people to develop the skills necessary to work & continuous learning

Make use of the appropriate capabilities needed during the transformation period and beyond – real change requires different capabilities, different tools, different skills, different techniques. When transforming organizations, leaders need to be sure that they’re giving their people the skills and tools they need along the entire way.

Instil a culture of continuous learning – includes changes to strategy, the organization and its culture. GROOVE in Silicon Valley has a wonderful culture of putting their staffs training and constant knowledge gathering to the fore of their business strategy.

·   It’s not about speed, it’s about momentum – run a marathon (lose weight/cut costs will not be enough)

Go all in – rather than just cutting costs, leaders and managers alike need to think about initiatives that will enable the organization to win in the medium term, initiatives that drive growth, actions that will fundamentally change the way the company operates, and finally, about investments to develop leadership and talent. Burn the boats – but remember, "everyone has a plan until they get punched in the mouth". Surround yourself with a team you trust, both at work and in your private life. Make the most of the connections you can make at events like GALA. Many of the people in these rooms are in the same boat as you. Look beyond the narrow "he's my competitor" viewpoint and engage with people. Share your experiences,  and be open to hear theirs.

A Black Swan event depends on the observer. For example, what may be a Black Swan surprise for a turkey is not a Black Swan surprise to its butcher; hence the objective should be to "avoid being the turkey" by identifying areas of vulnerability in order to "turn the Black Swans grey".

Ultimately there is always likely to be a need to produce localized content in the manner in which it is currently being produced, albeit technology will continue to have a far greater influence on how this occurs. However, as the world becomes a truly more intimate, collaborative, familiar and ultimately smaller, solutions will come to the fore that will change the way we communicate forever. These will not signal the death knell for the localization industry but will likely open up a whole new category of innovation, opportunity and application.

Language service partners need to recognize the changes that are occurring around them, if they are going to be able to move from the rather antiquated price per word business model which is seemingly on a constant downward spiral, and move towards a model which is adaptive, flexible, and entirely more representative of the actual value we can generate for our partners. Key to this will be the necessary recognition of our own creativity. Create content that has the primary purpose of improving the lives of the people in your network and a secondary purpose of driving the sales pipeline. We cannot predict the unpredictable, but we can build robust, adaptive companies that are willing to embrace changes enforced by negative events while still exploiting positive opportunities which arise from these Black Swans. Avoid being the turkey!

Thank you to everyone who attended #GALAMunich, and thank you in particular to Allison, Manuela, Jessica and Alicia for organizing another wonderful edition of GALA! I hope to see you all in San Diego next year!