Ready for Darkening Skies: The Power of Black Swan Preparation
In the field of risk management, the term “Black Swan” is often associated with events that are hard to predict, carry a high impact, and after occurrence, are rationalized by hindsight as if they could have been expected. This term first surfaced in reference to the perceived impossibility of the existence of a black swan in 1697 and popularized by scholar and statistician Nassim Nicholas Taleb, provides a useful conceptual tool for crisis communication planning.
Many organizations neglect the importance of preparing for Black Swan events in their crisis communication planning, considering them improbable and hence, not a priority. However, it is precisely this improbability that underscores their potential impact. When they do occur, these rare and unexpected incidents can cause significant damage to an organization’s reputation and stakeholder relationships.
Examples of Black Swan events:
1. The COVID-19 Pandemic: Its impact was felt globally, affecting all aspects of life and business. The sheer scale and universality of the crisis left many businesses scrambling to communicate effectively with their stakeholders. What effect did it have on commercial real estate and the workplace in general, with work from home becoming normalized? What about the Great Resignation? Nobody saw it coming.
2. The 2008 Financial Crisis: Triggered by the collapse of the subprime mortgage market in the United States, it quickly spread across the globe. Failure to communicate effectively during the crisis led to a significant loss of trust in many major banks and financial institutions. Certainly there were warnings, but banks and mortgage lenders were drunk on easy profits and chose to ignore the red flags.
3. The Fukushima Nuclear Disaster: In 2011, a magnitude 9.0 earthquake off the coast of Japan triggered a tsunami that led to a major nuclear accident at the Fukushima Daiichi Nuclear Power Plant. The company TEPCO was heavily criticized for its handling of the crisis communication, which exacerbated the loss of trust and reputation. Sure, earthquakes are to be expected — but their preparedness measures were found to be insufficient in handling the magnitude of such a disaster.