Black Swan Proof-World? What About the Swine?

Authors

Diane Osgood, Ph.D.

A few weeks ago the Financial Times ran a tidy opinion piece on 10 principles for a Black Swan-proof world. I chuckled as I read the headline as a Black Swan is, by definition, unpredictable.

Black Swan refers to a large-impact, hard-to-predict, and rare event beyond the realm of normal expectations. World War I, September 11th, and SARS were all Black Swans. While perhaps the Financial Time’s headline oversold the piece by Nassim Nicholas Taleb (who is also the originator of the Black Swan theory) on restructuring our financial markets to prevent another meltdown, today’s headlines nonetheless herald our next potential Black Swan: the swine flu.

As the news of the swine flu epidemic spreads faster than the virus, I am reminded that our job as leaders in corporate responsibility is to ensure our companies are prepared for the eventuality of uncertainty, calamity, and crisis. Shockingly most of us are not prepared at all. A recent Harris survey of 52 senior executives of Fortune 1000 companies found that only 15 percent said they were prepared for a worse-case scenario. Does that leave the other 85 percent out with the swans when handling a crisis?

It’s all of our responsibility to be prepared for emergencies and crisis. Check out the BSR Weekly article by BSR’s Pharmaceutical and Biotechnology Director Larry Mondschein for six steps to reduce risk if we do face another major disruption. (Note: you need to be a BSR member to read Mondschein's article.)

As of today, the WHO director general assures us that the likelihood of a swine flu pandemic has increased but that a pandemic is not inevitable. To push the metaphor, we may globally experience only a black gosling this time—and avoid further disruption of travel, trade, and loss of life. In either case, I’d prefer to be ready for the unpredictable.