I think my favorite part of this book was the reference to the W. Edwards Deming quote “In God We Trust, All Others Bring Data”. Davenport and Harris take a survey approach to what companies are doing with statistical analysis of data in order to base their decision making. What I do wonder, and I think its the Taleb influence, is how much of the statistical analysis that the authors site are misappropriating Gaussian distributions to non-Gaussian phenomena, and thereby increasing profitability in the short to medium term, but exposing the companies to great losses in the long term.
That aside, I do agree with the concept of looking at data to help guide what the best course of action would be. One of the topics they bring up (though not nearly as entertainingly as Moneyball by Michael Lewis) is the current usage of statistics in determining the value of players in sports. This certainly appeals to me, as a proponent of a meritocracy.
Now when I heard the title of Nassim Nicholas Taleb’s latest book, The Black Swan: The Impact of the Highly Improbable for the first time, my mind quickly went to the incredible juggling catch by Lynn Swann in Superbowl X over the sprawled out Dallas defender. The impact of that highly improbable catch led to an eventual win for the Steelers. The impact of the highly improbable Black Swans that Taleb mentions here, are far more devastating or exhilarating, except perhaps to Steeler and Cowboy fans.
Complete aside for those of you, who like me, wanted to see some of Lynn Swann’s incredible catches again, it turns out the NFL is rather protective of their rights to their images (I do seem to recall the phrase without the express written consent of the National Football League is strictly prohibited being thrown at me a few times). Anyway, if you go to this NFL.com link, and then search on Lynn Swann, choose the Baryshnikov in Cleats video, you wont be disappointed, unless you grew up a Cowboy fan.