CMCE Virtual Showcase: Living in the Land of the Black Swan

January is when many organisations run kick-off events to brief and prepare their teams for the challenges of the coming year.

Few at the start of 2020 would have anticipated a global pandemic and the devastating effect of the measures to contain it on business, society, individuals and government. So in planning for 2021 should we recalibrate? Should we now provide for the possibility of low probability/high impact events – what are sometimes called ‘black swan events’ – and if we do, what provision should be made?

Throughout 2020 we have become armchair experts in the strengths and weaknesses of statistical analysis but come to varying conclusions that have led to accusations of scaremongering on the one hand and complacency on the other.

The Centre for Management Consulting Excellence runs evening symposia we call Showcases, whose purpose to share leading edge thinking of interest to management consultants and their clients. It was fitting that our first Showcase of 2021 should consider what provision if any organisations should make in their planning for black swan events.

We had three experts to shed light on this. Two of them were from The Centre for the Study of Existential Risk (CSER), an interdisciplinary research centre within the University of Cambridge dedicated to the study and mitigation of risks that could lead to human extinction or civilisational collapse. Despite the considerable impact of COVID 19, this scarcely features on a scale of existential risk, but the techniques and understanding developed by the Centre are of value to organisations at large.

Dr Simon Beard is Academic Programme Manager at CSER and works across all CSER's research projects and leads the work on developing new methods to study existential risk. Much of his work focuses on developing methods to assess and manage global systemic risks, such as those relating to climate change as well as matters of global justice and sustainable finance. Simon will be commenting on realistic risk assessment under the title 'Black Swan or Ugly Duckling? Assessing COVID-19 and other 21st century risks'.

Simon notes that just because we weren't prepared for an event does mean it was unlikely or unexpected. COVID-19 fits into a pattern both of global pandemics and other global disruptions that while not exactly regular is nevertheless expectable over the long term. And a significant proportion of the harm they do is shaped by how society responds to them. The story of COVID-19 is a story as much about the impact of pandemic restrictions as the pandemic itself - but it could have been very different. By thinking about how we would respond to a global disaster and learning lessons from the past we can still reduce the cost of these events.

Dr Lara Mani is also at CSER where she is a Research Associate in Communication, building an empirical evidence base for a variety of outreach and communication techniques adopted to present global risk. She also works to understand how an improved knowledge of global risk can translate to action. For her, a key question is ‘How can we increase our resilience towards these high-impact low probability events and ensure we are ready for the unpredictable?’ There are significant challenges with communicating such risks and inspiring action, particularly in relation to their inherent uncertainties in the context of short terms of office and public attitudes of ‘not-in-my-lifetime’.

Lara presented some of the techniques and methods for understanding these risks and for their effective communication developed by CSER, including foresight, participatory processes, scenario-based exercises, gaming and narratives.

Our third speaker was Guy Ferguson, a former Borough Commander with the Metropolitan Police, who is now Chief Executive Officer of Police Crime Prevention Initiatives Limited (Secured by Design), a not-for -profit Police related organisation which aims to be a major catalyst for Crime Prevention in the UK. Police have to deal with a wide range of crises and methods of policing have developed from ‘dealing with a crisis well’ to building capacity and resilience to be better able to address crises logged on a regularly updated risk register. Guy will be speaking about how this translates into practice.

A synopsis of the event can be found below.