Keys to Success in Managing a Black Swan Event
Keys to Success in Managing a
Black Swan Event
(Ignore the Naysayers - It is Possible to
Prepare)
Nancy Green, CPCU, ARM
Executive Vice President
Strategic Account Management
Aon Risk Solutions
© 2011 – Aon Corporation
1
Keys to Success in Managing Black Swan Events
Executive Summary
The term “Black Swan” is on many people’s lips, and not just because the
“The key to addressing lead actress in a movie by that name won an Academy Award in 2011. a Black Swan is not just
While events of this type have occurred since the dawn of time, Black Swan mounting an effective gained its place in our vernacular when Nassim Nicholas Taleb, a finance response; it is mounting professor and former Wall Street trader, wrote the 2007 bestseller “The that response while
Black Swan”. The topic weighs heavily on the minds of many board simultaneously dealing members as well as those of leadership teams, and if it hasn’t been discussed yet in your organization, it soon will be. A Black Swan event with the psychological refers to a highly improbable occurrence with three characteristics: It is impact of being shocked impossible to predict, it carries a massive impact and its shock value is by an inconceivable stunning because people could never conceive of such an event occurring. event of staggering
Why does it matter? It can kill your organization if it isn’t managed well.
proportions.
Understanding the influence of survivor psychology provides great insight into why some organizations fail and others survive, or perhaps even thrive, in a Black Swan event.”
Some people equate the term “Black Swan” with “crisis” and believe that crisis management plans, effective public relations strategy, business continuity planning and supply chain risk management will enable their organization to successfully address any eventuality. While that may be true, not all Black Swans are crises (for example, winning the lottery is a positive Black Swan). Perhaps more importantly, not all crises are
Black Swan Event
(Ignore the Naysayers - It is Possible to
Prepare)
Nancy Green, CPCU, ARM
Executive Vice President
Strategic Account Management
Aon Risk Solutions
© 2011 – Aon Corporation
1
Keys to Success in Managing Black Swan Events
Executive Summary
The term “Black Swan” is on many people’s lips, and not just because the
“The key to addressing lead actress in a movie by that name won an Academy Award in 2011. a Black Swan is not just
While events of this type have occurred since the dawn of time, Black Swan mounting an effective gained its place in our vernacular when Nassim Nicholas Taleb, a finance response; it is mounting professor and former Wall Street trader, wrote the 2007 bestseller “The that response while
Black Swan”. The topic weighs heavily on the minds of many board simultaneously dealing members as well as those of leadership teams, and if it hasn’t been discussed yet in your organization, it soon will be. A Black Swan event with the psychological refers to a highly improbable occurrence with three characteristics: It is impact of being shocked impossible to predict, it carries a massive impact and its shock value is by an inconceivable stunning because people could never conceive of such an event occurring. event of staggering
Why does it matter? It can kill your organization if it isn’t managed well.
proportions.
Understanding the influence of survivor psychology provides great insight into why some organizations fail and others survive, or perhaps even thrive, in a Black Swan event.”
Some people equate the term “Black Swan” with “crisis” and believe that crisis management plans, effective public relations strategy, business continuity planning and supply chain risk management will enable their organization to successfully address any eventuality. While that may be true, not all Black Swans are crises (for example, winning the lottery is a positive Black Swan). Perhaps more importantly, not all crises are