The expression ‘black swan’ derives from the mistaken medieval belief that swans could only have white feathers, since all known historical records of swans demonstrated that to be the case. That was until the Dutch explorer Willem de Vlamingh discovered large number of black swans living in Western Australia in 1697. After that momentous event, the term came to represent a perceived impossibility that was subsequently disproven.
The black swan idea was turned into a theory by professor of risk engineering Nicolas Taleb in his 2001 book ‘Fooled by Randomness’, which talked about the upheaval in the financial markets in the wake of the 9/11 attacks in New York. He subsequently extended the theory to events outside financial markets in his 2007 book ‘The Black Swan’. For Taleb, black swan incidents are totally unexpected events of large magnitude that subsequently have a dominant role in shaping history. For him the terrorist attacks of 9/11 were one such event, but others included the outbreak of World War I and the break-up of the Soviet Union. He also includes positive history changing events, such as the discovery of penicillin.
Taleb criticizes fixed models of decision theory that consider ‘known unknowns’ but fail to take account of ‘unknown unknowns’. The infamous press briefing by US Defence Secretary, Donald Rumsfeld, in 2002 referring to this idea is believed to have been inspired by a presentation Taleb gave to the Department of Defence on just this subject.
Where I am going with all of this? Well, the final characteristic of such events might give you an indication. According to Taleb, the last attribute of black swan events is the tendency of human nature to concoct explanations for the events with hindsight, claiming to make them explainable and predictable. Sounds familiar? For me, Taleb could easily be describing a business disruption event that was not predicted, had a catastrophic impact on a business, but was subsequently explained away by those inside the business as foreseeable.
I am sure you can see the danger of such an approach is that we fail to learn from history and continue to believe that all business disruption events can be predicted if we do enough risk analysis. This post-rationalising approach risks leaves us vulnerable to being hit unexpectedly by another black swan event. The main thrust of Taleb’s books is not an attempt to predict such events, but rather to assist in building robustness in systems and organisations, so that they can survive negative black swan events and take advantage of positive ones. Sounds a bit like the new trend for organisational resilience doesn’t it?
This is precisely the concept behind the Crises Control mobile app. Although we identify over 200 possible business disruption events in our incident library, we recognise that there are just as many black swan type events that we have not identified and cannot predict. What we do is to help companies build organisational resilience by making it easy for them to capture evidence and review how they respond to disruptive events, and then adjust their processes as a preventative measure for the future. This means that when a black swan event does occur then the company will be in the best possible position to survive and even prosper from it.