What is the best way to prepare for black swans, events with low probability but considerable consequences? It is all about flexibility, says Nassim Taleb. According to the researcher, nothing is served by trying to control every risk. Instead, leaders should focus on developing the overall resilience of their organization to the most unlikely crises.
Natural hazards, revolutionary new technologies, global recession… The past ten years have witnessed an upsurge in “black swans,” as christened by philosopher and Risk Engineering professor Nassim Taleb.
How can organizations increase their resilience to unforeseen crises? By accepting that many events are unforeseeable rather than trying to predict the catalyst event.
Why do leaders ignore black swans?
Leaders tend to downplay and misinterpret black swans because they want to continue believing that “the world is structured, understandable, and therefore predictable.” Factors that contribute to the risk of blindness in the face of such events include “it will never happen to me” syndrome; mental fatigue when dealing with a succession of disasters; the unconscious tendency to repress past unpleasant experiences; and overly short-term thinking.
How to increase resilience within the organization
Although the catalysts of a black swan are often external, much of the damage sustained is under the control of internal management.
1. Aligning rules and behaviors, because informal practices often incite teams to ignore formal procedures
2. Developing flexibility: a tactical tool for stress testing an organization and assessing its capacity to withstand a black swan
3. Preparing leadership to assert itself when crisis hits
What they think, and what they say
For Emmanuelle Tran, crisis prevention, management, and communication expert, as much as for Edward Lazo, Deputy Division Head for Radiation Protection at the Nuclear Energy Agency, considering a wide variety of scenarios and thoroughly preparing teams for such unlikely events are the best ways to ensure flexibility and resilience in a storm.
Read our Dossier
Black swans: Using agility to face the unexpected
Business Digest no. 221, November 2011.
A synthesis of several publications, accompanied by interviews with Emmanuelle Tran, founder and managing director of Acyan, a consulting firm specialized in crisis prevention, management, and communication, and Edward Lazo, Deputy Division Head for Radiation Protection, OECD Nuclear Energy Agency, October 2011.