We’ve all read loads of prognostications about how the coronavirus outbreak will change the world – or not. But it got us thinking more generally about “wildcards” and what to do about them. Serious “wildcards” tend to be high impact low probability events. These are generally the most difficult risks to justify a business case for investment in preparedness, given there will always be competing requirement for more likely events. However, they also have a very high reputational risk for both Governments and the private sector. Dealing with such issues has been the subject of Government thinking for some time, including the 2011 Blackett Review of “High Impact Low Probability Risks”.
Most good horizon scanning will throw up things which, although not actually “black swans” in the sense we would never have thought about them, are remote possibilities with extreme consequences. Pandemics have long been high on this list. In SAMI’s recent newsletter we noted that both the US National Intelligence Council, in “Global Trends 2025: A Transformed World” (November 2008) and the UK Cabinet Office in the 2017 National Risk Register, identified viral infections very similar to the current one as a high risk.
Some wildcards can be even more extreme – asteroid hits and alien landings. Others are not very “wild” at all – an outsider winning the next election, a new competitor with disruptive technology. Some you will not think worth worrying about – unless you are SETI; others you really should develop contingency plans for.
If you are the Government and your teams have identified a pandemic as a serious enough wildcard to worry about, then you will have developed a contingency plan. Similarly, as a business you will have built a Business Continuity Plan to deal with risks you’ve identified (you have done that, right? Did it include “lockdown”?).
So when a wildcard hits, what do you do? Let’s use coronavirus to explore that – but looking at the principles that apply more generally.
Detect: you should have systems in place that identify the “weak signals” that one of your wildcards was about to land. Make sure you flag this up. With the virus, news emerged early November, warning papers were in the Lancet in January.
Review your contingency plan: determine whether it addresses what seems to be emerging. Unless you are lucky, the reality probably differs in several ways from what you postulated. Even for repeat events (such as foot and mouth disease) what worked last time may not be appropriate in the future due to changing environments. So it is critical you don’t just blindly roll out the plan. Dealing with pandemic flu is not exactly the same as dealing with coronavirus. There is still a lot we don’t know about how it will behave, we can’t assume it will be the same as flu. In business, a new competitor may break the conventional rules.
Determine speed of action: can you watch how things develop, or do you need to act now? Don’t just put things off until the crisis hits – try to pre-empt the problem. How far up a chain of command does it need to be escalated? Identify key trigger points – eg the virus reaching Europe – and actions to go with them.
Keep monitoring: things may not be developing the way you thought they would; it’s unlikely they will be. Make sure decision-makers are listening. In this case, testing for the virus is vital.
Adapt the plan: remember the old adage that no plan survives contact with the enemy. If possible, learn from how others are reacting; South Korea did well to stem the spread, probably because of their recent experience with MERS – they are watching for a second wave, we should watch and plan too.
Remember the distinction between forecasts and scenarios: Forecasts are based on assumptions, usually taken from previous experience. Mathematical models are not magic Oracles, simply encoded assumptions. But this event may be different. What don’t you know? What else could go wrong? Will the virus mutate into a more deadly strain? What are the second-order effects? If the whole Cabinet is taken seriously ill, can you cope? If half the NHS workforce is sick, what do we do then?
ACT!! And communicate – you need to bring people with you. But also listen because you are going to need to be flexible. Don’t be afraid of making U-turns. Make sure you protect the long-term as well as coping with the crisis.
Re-configure: determine new priorities, re-deploy resources, adapt facilities to new needs.
Keep monitoring and ACT some more. Keep communicating, keep moving.
Pick up the pieces: when the crisis subsides (which hopefully it does), plan your way to getting back on track; or change your direction entirely. How do you decide which? Think through different scenarios of what you could do.
Review and reflect
What else could you have done to react? What could you have done before the crisis hit?
You almost certainly could have built more resilience into your systems beforehand – becoming “anti-fragile”. Should you replace “Just in Time” with “Just in Case”? The systemic fragility exposed by the financial crisis of 2008; the pandemic showing up the vulnerability of globally distributed supply chains, combined with health systems suffering from austerity. These are not examples to follow.
You could also become more agile and responsive. If you can procure ventilators rapidly, that’s fine – if you can’t, you need to work on it. Do you have too rigid a command and control structure that doesn’t like bad news (like China at the start)?
Is this now a “new normal”? Will we face the same problem again soon? Or has it all gone away, and old certainties returned? How will you know? Are there now new opportunities, have you developed new capabilities, identified redundant processes?
How does it affect your other contingency plans? Are there new scenarios you need to be thinking about?
You know now that “stuff happens”. SAMI’s experienced and expert consultants can help you think about the future and develop plans that enable you to react to changing circumstances, to survive and thrive. Get in touch and let us help you take:
robust decisions in uncertain times.
Written by Huw Williams, SAMI Principal
The views expressed are those of the author(s) and not necessarily of SAMI Consulting.
SAMI Consulting was founded in 1989 by Shell and St Andrews University. They have undertaken scenario planning projects for a wide range of UK and international organisations. Their core skill is providing the link between futures research and strategy.
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