Someone recently asked if was possible to plan for a Black Swan event. I’m not sure if he was serious, but I suppose it’s a question that’s occurred to many planners. Can you plan for a Black Swan event? To answer that question it’s important we agree on what constitutes a Black Swan*:
- It must be unanticipated – falling outside the realm of usual expectation
- It must have a major, if not historical, impact
- With the benefit of hindsight it can be rationalized as something that could have been foreseen had the facts been examined carefully enough.
So the short answer to the original question is: No. If you can’t anticipate it, therefore you can’t plan for it.
Could you predict the possibility of a specific Black Swan event?
Forecasting (prediction) utilizes statistical reasoning. Statistical reasoning relies on history. If a black swan has never occurred before, there’s no history to enable predicting its possibility. That doesn’t mean a specific Black Swan event is not possible; its possibility cannot be zero. But a true Black Swan is not only unpredictable, it is unanticipated. If you don’t expect it, you can’t predict it. If you could predict the possibility, by definition it would no longer be a Black Swan.
So, you can’t plan for a Black Swan, and you can’t predict its possibility. Is your only hope to stock up on good luck charms and keep your fingers perpetually crossed? Isn’t there anything you can do?
The bad news: as a Risk Manager there’s little else you can do. The good news: as a Business Continuity Manager there’s plenty you can do!
First, stop planning for scenarios. We’ve discussed this in one or two previous articles. If you plan for scenarios you only plan for those events you believe are important if they were to occur. What about all the other events you haven’t planned for? That mythical Black Swan is one of those events you didn’t plan for – as are a thousand other events that might take place, but which you haven’t got time to consider.
Instead, you should Plan for the disruption of critical assets: facilities, technology, people, processes and supply chain components. Understand what’s critical (that’s why you do a BIA), what those critical business processes and IT systems rely on (their assets) – and plan for the loss or disruption of those assets.
By focusing on critical assets (instead of scenarios) your Plans can be used for anything – even to respond to a Black Swan event. You can’t plan for the actual event (remember, you can’t anticipate a Black Swan) – but you can plan for its impact by creating strategies to recovery the critical assets your most important Business Processes (and IT Systems and Applications) rely upon.
So if you’re a Business Continuity Manager or Planner, don’t worry; you can plan to respond to any event – even a Black Swan.
If you’re a Risk Manager, try not to think about Black Swans – it’ll help you get some sleep.
*For purposes of this discussion the definition used is an amalgamation of the common components of several published definitions
