Business and coronavirus: are we really facing a “black swan”?

The term “black swan” was popularized by Nassim Taleb (Lebanese financial specialist, American nationalized) to refer to the occurrence of high impact events, highly improbable and only predictable in retrospect.

Intuitively, we all think we know how to recognize a “black swan” when we face one, but the truth is that not all the events that we qualify as such, really are.

The same event can be a “black swan” for some and something perfectly expected for others.

After all, what distinguishes one version or another is the level of knowledge, or ignorance, that one has about the phenomenon under analysis.

The 2008 financial crisis, for example, may have seemed surprising to families who had mortgaged their homes, those who had no idea of ​​the type of risk they faced by borrowing at a variable rate, while for large financial market operators, it was simply a speculative activity that went wrong.

Blaming a “black swan” is easier and safer than admitting that one has failed to anticipate a crisis.

And we only talk about crisis, because it is very rare that someone attributes a sudden success to chance, or to the unexpected.

When things are done well, there is always a human candidate willing to receive the praise, while it is the poor feathered animals who end up taking the blame for many misfortunes.

Pandemic time

By the time this article is being written, a new pandemic has spread across the planet, threatening lives and fortunes.

Stock markets are suffering from consecutive days of declines, and many industries have begun to suffer the effects of the crisis, either experiencing strong declines in demand, or difficulties to continue producing due to interruptions in their supply chains.

The first to be affected, in addition to the human victims, were airlines, cruise ships, hotels, large tourist centers and organizers of large mass events.

But the list goes on and grows day by day, reaching practically all aspects of economic activity.

Are we facing a new “black swan” or is it something that could have been anticipated?

In an interconnected world, in which a person can travel half the circumference of the planet in less than 12 hours, it should not surprise us that a virus spreads very quickly and in a few days reaches Europe and the Americas.

From a health point of view, this situation is not only not new, but it will be repeated sooner or later. History accounts for at least six pandemics in the past hundred years.

But neither should the unleashed economic crisis fall under this definition, unless we want to deceive ourselves by attributing to an external factor something that is our sole responsibility.

Diversify risks

A recent report notes that 75 percent of American companies have had problems in their supply chain due to the coronavirus crisis.

Being able to work more and better in risk diversification, these companies, as well as many others around the world, preferred to bet on the advantage of the low costs of the present, postponing strategic decisions that, had they been contemplated, would have avoided many of the negative consequences of this crisis.

Does anyone remember that not putting all the eggs in one basket?

It is not surprising, then, that in the event of a catalyst episode, such as the appearance of this pandemic, precisely in the region of the planet considered as the “factory of the world”, the system entered into crisis.

We are definitely not facing a “black swan”.

It is difficult to predict when and how the next economic crisis will appear, but we do know that it will happen sooner or later, and probably with a more devastating effect.

Actually, that is not the question that should matter to us at the moment, but rather to know if the business community will end up learning something from everything that is happening.

Once this crisis is over, it is very likely that the world will resume its original path and companies will continue to concentrate their plants and suppliers in regions of high population density, attracted by low flexible labor regimes and lower costs, once again neglecting due to the extremely fragile situation in which this can leave their supply chains.

Can we predict what will happen in the future? Obviously not, but we can try to speculate on things that could happen and act accordingly.

It is just a matter of using your imagination a little and losing your fear of thinking the unthinkable.

We don’t know when the next pandemic will be, nor do we know when the dreaded one will occur. big one in the San Andrés fault or which coastal cities will be swept by the next category 5 hurricane.

But we do know that these things are going to happen sooner or later, and when this happens, we cannot blame its consequences on a “black swan”.

* Director of the Master in Business Administration and Technological Applications in Business of the 21st Century University