2020 Review in Black Swan and White – #1

This 2020 review could not have started without mentioning the pandemic upfront. It has completely transformed our lives and the world as we knew it at the beginning of the year. However, I like to take a bird’s eye view of things. Consequently, let us take help of the ‘Black Swan’ to touch upon the aspect of managing risks. This will be more fruitful, rather than outlining the minutiae of the pandemic. We are all too familiar with the latter, since it has occupied our collective mindspace for almost the entire year.

The Pandemic – A Black Swan?

The first point that we need to understand is people’s reaction to the pandemic. Almost everyone was taken by surprise and even the most advanced countries and organizations found it challenging to deal with this. Even in December, the number of daily deaths recorded in the United States is setting new records.

Many people have rushed in to call the Corona virus pandemic a “Black Swan” event. In other words, an event that could not be foreseen. And, in doing so, in our minds, we exonerated everyone involved from the blame of being unable to deal with it. The essence of a Black Swan is that it could not be predicted and hence we could not have been planned for. Consequently, we should forgive ourselves for our lack of preparedness and the poor show that we put up in our battle against the virus.

Nassim Taleb and the Black Swan

Before I give you my views, let me introduce you to Nassim Taleb, author of the famous book, “Black Swan”. He is an authority on Risk Management and in fact, wrote this book in 2007 just before the global financial crisis of 2008. Taleb has been a busy man in 2020 and it is partly because people have incorrectly labelled the pandemic as a Black Swan event.

Nassim Taleb has spent much of 2020 explaining to the world that the pandemic was NOT a Black Swan event. In fact, he did write in his book in 2007 that “as we travel more on this planet, epidemics will become more acute. The successful killer will travel vastly more effectively. I see the risks of a strange acute virus spreading throughout the planet“. According to his logical mind, this was a foregone conclusion and well documented too. Alas, this was not obvious to the rest of the world!

Risks and Cognition during this Black Swan

There are several reasons that can be identified for the above phenomenon. But, the root cause lies in our cognition i.e. the way we think about things. Our minds trick us into believing that the patterns that we see in our routine lives will continue. A study of the anatomy of the brain has revealed that the neural pathways that carry these messages keep getting stronger each time this message is reinforced. As a result, we have to make a conscious mental effort to bypass these regular thinking patterns and think differently.

Well, this is easier said than done! But, is it too late to bother asking this question now?

2020 – Black Swan or White?

The turn of the year provides us the best possible opportunity to reset our cognitive processes. This is a time for introspection and to bypass our regular neural circuitry. This will allow us to truly understand our own minds, if not the world around us. We should not rush into 2021 bemoaning that some unforeseeable black swan event hit us in 2020.

On the contrary, the year 2020 should serve as a reminder of the failure of our collective cognitive processes. We should take some introspection breaks at regular intervals to make sense of the world around us. How we perceive things around us shapes our reality. Let us not continue to spread false narratives as we step into 2021.

Creative Destruction and the Upside of Risks

Instead, let us put things in perspective, as we conclude the first part of Review 2020. We have been consumed by the negative consequences of the pandemic during 2020. All of us have played the victim card for most part of the year. But, let us not forget the Laws of Nature.

The process of creation of something new requires destruction of the old. I leave it up to your creative abilities to fill in the gaps and figure out what has been destroyed in 2020 and what can be created in 2021.

There are several answers to such questions, and I will share the same over the course of the remaining posts of this series. Do remember to bookmark this master post – “2020 – Year in Review” containing the links to 20 thoughts and lessons from 2020.

In addition, you can also watch this Keynote Address that I delivered at a GRC (Governance, Risk and Compliance) summit earlier this year. It delves deeper into the above subject.

About The Author

Rajiv Maheshwari is a business and start-up advisor, and the co-founder of From The Experts Mouth. He is a management professional with over 25 years of experience, and worked as CEO for a decade, and in leadership roles with NYSE listed companies such as Accenture and WNS.

He is a Chartered Accountant and MBA (Director’s Merit List from IIM Bangalore) and an autodidact, who is on the path of self-directed life long learning and sharing. He is a thought leader, author and keynote speaker and has developed several frameworks to bridge the gap between academia and industry.