Black Swan Thinking and the 3 Mindsets

This week, words like surprise or surreal were used when Russia invaded the whole of Ukraine. Many people, even experts, were caught off guard. It is what you would call a Black Swan event. What is happening to Ukraine is extremely unfortunate and probable even though we were hoping that it would not happen, but it did.?

According to Investopedia , a black swan event is defined as :

“An unpredictable event that is beyond what is normally expected of a situation and has potentially severe consequences.

Black swan events are characterized by their extreme rarity, severe impact, and the widespread insistence they were obvious in hindsight.”

Whenever I conduct a strategy workshop for clients, my team and I prepare a section of considerations known as the Operating Dimension(OP). The OP examines the probable trends, changing realities in politics, technology, social issues, and competition. These 4 aspects explore whether the current OP is likely to be advantageous to the business model or highly detrimental to its existence. The OP is built on our 18 years of insights advising governments, businesses and non-profits globally. We keep updating our view of the world to note changing realities. This is always an interesting part for me as it tends to provoke strong reactions as few leaders have even holistically contemplated their operating dimension.?

Over the years after we presented the OP, I have observed that leaders tend to exhibit the following three kinds of mindsets :

1. The Supremo Mindset: Highly dismissive as they assume they will reign supreme?

This group of leaders is confident that their business model will always be relevant and that nothing can ever cut it down to size. Their response to the OP is always, “I have seen this, and my experience tells me the trends you mention here will never happen!“ They will not give room for any discussion as they have the last word.?

2. The Defeatist Mindset: Fully cognizant but defeatist mindset?

Then there is another group of leaders who are fully aware and agree with the OP presented. But they go to the extreme and assume that reality cannot be shaped or changed, and they are doomed! They will not entertain further discussion because they have written themselves off.?

3. The Strategic Mindset: Full awareness and strategic in thinking

Then there are the few who are fully aware of the vulnerabilities and their strengths. They are determined to face the realities but refuse to accept them as inevitables and work towards overcoming them.

An excellent example of this mindset in business would be Steve Jobs, who did not accept that Apple will always be the small fry in the personal computer business by using its strengths to go after the mobile phone business: this paved the way for Apple to be the titan it is today.

In nation-building, the example would be Singapore, where Prime Minister Lee Kuan Yew and his colleagues such as Goh Keng Swee thought of creative ways to help Singapore survive and thrive. They saw that it is possible to convert smallness into an advantage by proving to be agile and innovative to fit the needs of global investors. Their moves proved that size does not matter; mindset does. As a result, Singapore can punch above its weight today because of its strategic moves.

So whatever life may throw at you, it is not inevitable or a done deal; what matters is your mindset. Be strategic, not a defeatist, worse do not be a supremo. Being strategic in all things means never assuming. All events are possible, good or bad. In truth, there are few black swans that we will not notice; rather we choose not to consider them.?

#blackswan #strategicthinking #scenarios?

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