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Principles and protocols for responding to unexpected catastrophic events, a Black Swan
Black Swans are defined as rare, random, and high-impact events and are characterized to be catastrophic and broad. However, many argue these events are occurring more and more frequently: massive earthquake in Haiti (2010), coal ash spill in Tennessee (2008), and Hurricane Katrina (2005). Some skeptics believe, in hindsight, that these events should have been identified because post event investigations found warning signs that signaled such an event was likely to occur that experts failed to see in their predictions. In reality, Black Swan events still continue to be unpredictable and unpreventable. Although you can’t prepare for every scenario, but you can establish principles and protocols to be better prepared for the unexpected. A recent thought paper by Ernst & Young explains how to do that.
Principles for Preparing for and Responding to a Black Swan
The paper provides broad based principles that can be applied to any organization. Having these principles in place before the Black Swan event occurs is crucial to an effective recovery. Here is brief summary of the core principles:
1. Establish response goals, assigning leadership to meet those goals and establishing reporting channels during the crisis.
2. Establish immediate response goals and values in order to limit the impact before a formalized plan is developed.
3. Empower local leadership and personnel to recognize and mitigate emerging catastrophic risks.
4. Plan and execute redundant mitigation responses in case the primary response fails.
5. Know your resources and how to use them during a catastrophe. Leaders should keep track of internal and external resources including personnel, financial, and physical resources.
6. Incorporate outside perspectives and experiences into their response strategy.
7. Remain objective throughout the process when analyzing, discussing, and responding to catastrophic risks.
8. Maintain the moral high ground by planning and executing responses based on what is right, rather than planning for only the company’s best interest.
9. Challenge your response strategy with an independent perspective to help identify weaknesses before the Black Swan does.