Dear friends, users and members of the Strategy Tools global community
A unique situation
We are in challenging times.
Our families, communities, cities and countries are all going through or about to go through a once-in-a-generation-crisis, with the combination of Corona, high debt levels and oil wars. Economic activity will come to a grinding halt and companies will immediately start laying off people. Many will go out of business. Many, many more will struggle through. At the same time, economic activity will go on, (some) companies will need to stay open and governments will have to inject massive stimuli to try to keep the wheels spinning. See Germany’s massive ‘Bazooka’ package. A recovery is already underway. The question is which shape it takes and what timeline it is on.
Double Black Swan
The situation many countries now are in can best be understood as a ‘Double Black Swan’. The COVID19 situation, that Bill Gates has been warning the world about for since mid-2000’s is now unfolding as we speak. His 2015 TED Talk stands out today as a clear and present warning – that few western countries paid much attention to.
Combined with that, the unprecedented moves by Russia and Saudi Arabia to leave OPEC and kick of an oil war, further accelerating an economic downturn in numerous countries – including US, Brazil, Norway.
The theory of black swan events
In 2001 Nassim Taleb first discussed the principles of the black swan events. This was expanded upon in his 2007 book, The Black Swan: the impact of the highly improbable. It is an excellent read and highly recommended – even more so if you find yourself in complete lock-down for the coming weeks.
In it, Taleb describes the concepts of Black Swans and how we can both understand and prepare for them. According to Taleb, “First, it is an outlier, as it lies outside the realm of regular expectations, because nothing in the past can convincingly point to its possibility. Second, it carries an extreme ‘impact’. Third, in spite of its outlier status, human nature makes us concoct explanations for its occurrence after the fact, making it explainable and predictable”.
How to sense disruption – understand scenario thinking
In the recent report, Building the Transformational Company, we list the 10 Principles of Transformation. Principle #1 Understand Your Industry Shifts.
These shifts can come slowly, but also suddenly, potentially leaving companies increasingly exposed to these sudden shifts. Now, the double black swan events is playing out a real-time disruption scenario few thought ever would come to life.
- Learn how to sense weak signals
- Identify strategic dilemmas in industry level scenarios.
- Align your management teams around key industry shifts
A key recommendation here is to develop and work through a multitude of potential scenarios and try to understand how they can come to play out. Today, more than ever, this is going to be a critical skill for companies in the coming weeks and months. The current situation is rapidly unfolding and will continue to throw challenges and surprises at nations, companies and leaders in the coming months.
Strategy Tools Digital Solutions – work remotely – stay safe – 100% online
At our end, we are now launching a series of new initiatives under the Strategy Tools Digital Solutions initiative. Together with our team, partners, users and global community, we are shifting all work, programs, projects, workshops and client delivery to 100% online.
We are quickly ramping up an end-to-end Digital Solution, allowing our community to continue working, but in the digital space. Staying safe and delivering remotely.
Strategy & transformation advisor to companies, innovation clusters, ecosystems and governments around the world.