‘Black swan’ events are a metaphor for unforeseen, rare, economic and geopolitical shocks that have a major impact, and are then rationalised with hindsight. But the table below shows that black swans are in fact increasingly common. They’re not the white swans of regular occurrence, since they’re now turning more grey than black.
Over the past 20 years there have been at least 10 black swan events (we may have missed some), averaging out at 1 every 2 years. That is not exactly rare.
In our interconnected world they seem to have become both more common and intense. So what should we do about it?
We’re not trying to say that you should be able to predict black swans, rather that it illustrates the importance of thinking about the future, alternative scenarios and possibilities and acquiring a futures mindset.
This will be essential if companies are to address the next grey swan which could be only 2 years from now. It’s obviously impossible to have perfect foresight about these things, but it is possible to build a futures orientated organisation which if far more flexible and agile, envisaging alternative future scenarios and how to respond to them.
You don’t have to be perfect at forward thinking, but you do have to be better than your competitors.
Whether we like to admit it or not, short-term thinking is entrenched in many organisations’ outlooks. In a crisis this is partly understandable, yet is no way to either a) develop solutions for escaping the worst of the COVID-19 crisis nor b) prevent similar future ‘wild cards’ from impacting business. Rules governing politics, economics, social norms, work and more are being rewritten at pace, leaving yesterdays’ assumptions increasingly invalid. Tactics needs to be augmented by a strategic view of change.
Forces larger and more complex than many standard industry-level trends that are interrogated by tools such as Five Forces are a part of our operating environment, as COVID-19 has demonstrated. The long-term view, although imperfect and beyond many leaders’ likely job tenure, is a key facet of organisational sustainability.