5 things you need to know about Black Swans, Resilience and Agility

Ten years ago, John Casti and Leena Ilmola called together a group of us to discuss Black Swans. This led to the creation of the https://globalxnetwork.com/ and since then we have jointly and separately worked on a theory of surprise, and its implications for organisational resilience and agility. Let me briefly summarise 5 major conclusions I draw from this work by our global network:

  1. Black swans are essential to life and growth. In the midst of a pandemic, it sounds harsh to say this. But black swans – precisely because they have a hefty impact – are what we need to jolt our systems out of the sub-optimising equilibria they get locked into. The status quo will always be defended by vested interests, and those powerful forces usually seek to maximise their own short term good, not the long term common good. Only a big external shock can cause the change required to force change, and to burn away the deadwood of processes, institutions and habits which are no longer needed, but which are too difficult to abolish otherwise. Black swans are an opportunity, and we must seize them – both on a societal and on a personal level.
  2. Do not waste time trying to guess what the next black swan will be. Black swans are merely the trigger. They open the door to substantial change. But the key determinant of how much change will happen, is usually not the strength of the black swan itself. To understand why this is so, imagine a ball perched on the peak of a mountain, versus a ball at the bottom of a deep circular pit. In the former, if the ball is even slightly blown, it is may roll for miles – and in any direction! In the second case, almost any amount of force will not shift it. So, when looking to the future, do not focus on what the surprise will be. Focus on the social mood around you: how fragile are the structures surrounding and within your organisation?
  3. Black swans, are often white swans that we spray paint black afterwards. We Like to think that COVID-19 was a black swan. True, global pandemics were not headline news in 2019. But that does not mean they were very unlikely (as a black swan is supposed to be). Rather, for all too long, we have chosen to ignore the possibility of a pandemic. And there are many other similar events that could still strike us in the same category: for instance, another Carrington event could fry our electricity transformers. Thanks to the data we have gathered over the last few centuries, we know that that such events have happened before – and will likely happen again – it is only a question of when. But we disregard them, as “unlikely” as they have not happened in our living memory/in an area that is geographically relevant/to our industry (delete as appropriate!).
  4. Resilience is a paradigm shift, antithetical to our focus on efficiency. Our societies, and especially our corporations, aim to maximise short term profit, and to be as efficient and lean in their use of resources as possible. On the one hand, this is tremendous: imagine the ecological damage if we were less efficient! On the other hand, it means we are vulnerable: floods in Thailand stop car factories in Germany, export bans suddenly leave us short of Personal Protective Equipment… But resilience is not just about shortening supply chains. It is about changing the incentive systems to reward those who invest in flexibility, and long-term returns, rather than in short term bean-counting logics. Resilience is the ability to bounce forward after an extreme event, and to do so with a continued sense of identity (i.e. it is not a totally different organisation that bounces forward).
  5. Agility is Aikido, not boxing. The role-model is not a boxer, who picks him (or her)-self up, again and again after a pummelling. Tough objects may be robust – they withstand a battering for a long time – but they are finally brittle – when they break, it is a catastrophic breakage. So robust is not resilient – and certainly not agile. The role-model is an Aikidoka: when the hit comes, the Aikidoka is no longer there to take it. She uses the energy of the incoming blow to cause the opponent to fall… That requires super agility, which in turn requires a depth of space to move in – and very rapid decision making (which requires decentralised empowerment and a common sense of what we are trying to achieve together when talking about an organisation rather than an individual person). It also requires a lot of practice, and for that role playing through alternative futures, and pre-identifying different strategic options are a great way to develop this organisational agility.