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A few years back Daymark embarked on an exercise to develop a product that could predict rare but severely damaging events to an organisation’s reputation, a so-called ‘black swan’ event.
Some consider the current COVID-19 pandemic as a black swan event, although better crisis management scenarios have pandemics in their mix.
It is of course, by definition, an impossible task to uncover black swan events. But how do you get close? In corporate affairs we have all seen them – those damaging events that come from left field with an immediate impact on reputation.
In this time of COVID-19, we thought we would share the three things we learnt about black swan events as we built our reputation risk product Foresight.
- Forecasting and thinking about potentially reputation damaging events is essential preparation for when that unpredictable event occurs. Even though organisations may never have considered how they would respond to COVID-19, the ones who have responded well and quickly already knew how to respond. It was in their DNA and in some respects the nature of the disruption was secondary.
- People laugh at the term ‘unknown unknowns’, made famous more recently by Donald Rumsfeld. Taking time to look at the full Johari window, as it is known, is insightful beyond the mockery. In addition to unknown unknowns, there are things you know about yourself that others don’t know (known unknowns) and things unknown by you that are known by others (unknown knowns).
- Black swan events look entirely predictable with hindsight. In the reputation game, dissecting the events leading to a reputation damaging event with a review is crucial. It’s not so much about what could have been done better, but what are the patterns here that were missed? Always review your crisis after an event. Why did you miss the predictable?
We used these insights to build Foresight. In the current context it would be wrong to think of COVID-19 as an unknown unknown, so the challenge becomes how do to get that outside view or knowledge into your organisation. Our solution was to look at how employees believe a reputation event would be managed by an organisation, no matter how obscure or remote, and compare it with how the public believes the organisation would respond.
As we all emerge from COVID-19, resist taking comfort in that it was all predictable and ask what else are we missing that are pressing reputation risks.
DID YOU KNOW? The term ‘black swan’ has a unique link to Australia. It was originally a metaphor for things being as rare as a black swan. When first coined, black swans were presumed to not exist until Dutch explorers in 1697 became the first Europeans to see black swans, in Western Australia. The term grew to mean how something impossible might be disproved. And so the task of predicting the unpredictable remains. But as time has gone on, it’s not so much predicting the black swan event as it is being ready to respond to one.
