Be wary of the "grey rhinoceros" crisis

Be wary of the "grey rhinoceros" crisis

Enron incident, Kodak incident, BlackBerry incident...

About the Author:

Michelle Mark, winner of the 2007 Guggenheim Scholar Award, "Young Leaders" of the 2009 World Economic Forum, she has several roles as Director of the International Policy Institute based in New York and the Chicago Council Global Affairs Deputy Director of the Research Center and Director of the Latin American Office of the International Finance Review. He has written articles for the New York Times, The Washington Post, and International Policy.

Relative to the unpredictability and sporadic nature of the Black Swan event, the Grey Rhino event is not a random emergency, but a high probability event that occurs after a series of warning signs and signs. For example: the 2008 US real estate bubble burst and the bursting of many bubbles before; the devastating aftermath of Hurricane Katrina and Sandy and other natural disasters; the subversion of the traditional digital reality of digital technology; the collapse of the bridge and the crumbling city Infrastructure; the rapid decline of the Soviet Union and the chaos in the Middle East have shown obvious signs beforehand.

Why are leaders and policymakers unable to lift the crisis before the situation is out of control? How should people identify and effectively respond to obvious, high-probability crisis events?

Michelle Mark

(This article was published in China Economic Weekly, Issue 30, 2017)

Editor: Zhou Qi

In today's era, companies, organizations, government agencies and various industries face some obvious and high-risk dangers, and some of them are dangerously devastating to those who are unprepared. Each of us faces at least one gray rhinoceros crisis, sometimes even more: in your personal life and family life, in the organization or business where you work. As a part of society and the inhabitants of the world, the challenges we face – both individual and collective – are how to find and succeed in avoiding dangers, the dangers that are most likely to occur, the very obvious dangers, and the dangers of destructive power. - Both are obvious and imminent dangers, but at the same time they are all dangerous to be ignored.

It is unwise to ignore the existence of "grey rhinoceros"

The Black Swan theory draws attention to unexpected events and makes people aware of the possibilities. Behind every black swan event, there is a huge gray rhinoceros crisis. You might think that we don't need to pay attention to those obvious crisis events; or that we are already dealing with these obvious crises. However, the opposite is true. We rarely pay attention to events that can be expected. Sometimes, the more serious the gray rhinoceros crisis, the more we can see its existence, the harder it is to escape its offensive line.

Once you know what the gray rhinoceros crisis means, you will find that they are everywhere. Enron Inc., Kodak Incident, BlackBerry Incident, Samsung Mobile Explosion Crisis... The company that failed to respond to the gray rhinoceros crisis in time is too numerous to mention.

We don't know when or how these gray rhinoceros crises will appear in front of us, but what we know is that it is unwise to ignore their existence. Looking back at history, digital cameras have had a huge impact on traditional camera technology, and the Internet has had a huge impact on TV networks and traditional media. So, will the rapid development of 3D printing technology cause a huge impact on some manufacturing industries? How should we deal with the huge changes in employment structure brought about by artificial intelligence? Faced with the social and political stability crisis brought about by the growing income distribution gap, and the future human resource needs, how can a leader help his organization improve the well-being of all its members? How can an emerging giant city properly address the enormous pressures on the urban infrastructure and living resources caused by a rapidly growing population? How can an aging city solve its demographic changes, how to upgrade its urban infrastructure – and how other cities can stop young people from leaving? What impact will the rise of the sharing economy have on traditional industries? How can related companies respond to the new situation and stand out in the industry? How can Japan, Europe and the United States get rid of its economic and political difficulties and the social impact of an aging population? How can urban leaders and residents cope with increasingly severe resources such as lack of drinking water, food and important mineral resources, and the catastrophic effects of resource scarcity on supply chains, social and political stability, and even their own survival? When floods occur once every 10,000 years, and now every 100 years, Hurricane Katrina and Hurricane Sandy, Flint Storm and Hayes Storm regularly attack the relevant coasts, those coastal residents How should we deal with the impact of rising sea levels?

How should we deal with the gray rhinoceros crisis – a problem hidden under our decision-making mechanisms and political institutional mechanisms. The existence of these problems makes us unable to do anything about other very obvious and significant risks. How should companies, families and individuals cope with a major crisis that seriously jeopardizes their survival?

Distinguish between "grey rhinoceros" and "black swan"

Just as the Black Swan theory can help us focus on those low-probability crisis events, the Grey Rhinoceros theory can also help us focus on high-probability and obvious crisis events. Such incidents are taken for granted by us, or they are pushed to the side, ignored, or even criticized by us. The result of our doing this is to make ourselves pay a heavy price. Directly recognizing the existence of the gray rhinoceros crisis can not only help us avoid its attacks, but also help us turn crisis events into opportunities. Everyone saw the elephant in the room, the danger of everyone avoiding it, but everyone would not mention it, because it would be unsettling to mention it. The gray rhinoceros crisis is similar to the elephant in this room, but it is more dangerous than it.

The first stage of dealing with the gray rhino crisis - the phase of the denial of the conflict - is the easiest to confuse with the black swan theory. Considering a high-probability gray rhinoceros crisis event as a low-probability black swan-like crisis event is just a self-protection mechanism that people establish themselves to avoid recognizing disturbing realities. You can dispute the definition of "high probability" and the timing of its occurrence. The most important thing is not to think too much about the details. If an extremely bad thing is likely to happen, it is necessary and worthwhile to go to it now.

If we can recognize the existence of the gray rhinoceros crisis as soon as possible, then we can quickly find the factors that hinder us from knowing its existence. Because our thinking structure and our social mechanisms will motivate us to avoid things we don't want to see, we will stick to those less reliable predictions and ignore the events that are most likely to happen. For answers we don't want to know, we won't ask questions. There is a concept of ignorance, innocence, and indecent in our organizations, in our families, in our government, and in our minds.

Be brave enough to question the words of suspicious people, don't be afraid to make mistakes, and be brave enough to make mistakes. Don't think that everything will be natural because the authorities say nothing. They are profitable in the status quo, so they will resist anything that might destroy the status quo. Be sure to constantly look for and ask serious questions. Be sure to always guard against group thinking and resolutely resist its influence. When making major decisions in your organization, make sure that people with different opinions and opinions are able to participate and that they are treated with a welcome and acceptable attitude. As we saw in the experiments of Charlie Buss and Simmons, when you are told that there is a ape monkey there, you will see it easily. By the same token, when you start looking for a gray rhinoceros crisis, you may see it.

(The article is excerpted from the main body of the book, with the deletion and title added by the editor)

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