Another Black Swan event, 12 years since the last one and potentially just as devastating, but for totally different reasons.
Coronavirus has been called a Black Swan event. The term was popularised by Nassim Nicholas Taleb and refers to an unexpected event, one that could not have been predicted, and that has a very large impact. It is also an event that people like to explain afterwards as predictable – “the signs were there” – but which is really just a product of randomness. For example, World War One has been analysed as predictable, yet financial bond prices right up to the beginning of it gave no indication that anything was amiss.
The origin of the term is that centuries ago, Europeans believed that swans could only be white and that a black swan was an impossibility. Then a Dutch sailor came across one in Western Australia.
Black Swan events are usually the result of the completely random and also the highly complex, where there are a multitude of factors at play. The impact of coronavirus has probably been exacerbated by the increased complexity of supply chains around the world, and by the increased amount of travel. Chinese people made 34.7 million overseas visits in 2003, and 253.8 million in 2018 – this is not saying that Chinese visits are the root of the problem, it is simply to illustrate the degree to which international travel has increased.
So what can you do? Resilience is usually voiced as the answer, however what is resilient may resist a shock, but it stays the same afterwards. The answer proposed by Taleb is “anti-fragility”: something that gets stronger following a shock. And it is easier to work out if your systems or processes are fragile, and therefore likely to be broken by an event, than it is to try and predict the occurrence of the event itself.
The multi-headed Hydra of Greek mythology is an example of anti-fragility: if you cut off one of her/his heads, she/he grew another two. Airliners are another example: generally, after a crash, there follow improvements in aircraft design or construction.
Organisations, like individuals, need to submit themselves to stresses to strengthen themselves. At the very least, studying incidents and near misses both in your own organisation and in others can help you build anti-fragility.
The Symbiant Risk Modules include incident reporting as part of the risk set, users can log incidents which can then be analysed and if needs be have an action plans put in place to remedy or escalate the issue. See the Risk Modules overview video https://www.symbiant.co.uk/solutions/risk-management-software/
Data Sources: The Black Swan – Nassim Nicholas Taleb, Fortune magazine, Wikipedia.