Is the Coronavirus Outbreak a Black Swan Event and the Lessons from It to All of Us?

Is the Coronavirus Outbreak a Black Swan Event that Took Us by Surprise?

Typically business planners use the past as a guide to plan for the future and manage the present. For instance, it is common for corporate planners to extrapolate the past occurrences of “catalyzing events” and model the future consequences from them.

However, the Coronavirus Outbreak represents an entirely new challenge as barring the Spanish Flu of 2018, there are no reliable past occurrences of viral outbreaks of this magnitude.

Moreover, even the Spanish Flu happened more than a Hundred Years ago when the world was much simpler and less integrated as it is now.

This is the reason why many experts are comparing the Covid 19 outbreak to a Black Swan Event much like the Global Financial Crisis of 2008.

A Black Swan event is the phenomenon of a rare occurrence that happens every once in a while and the effects of which blindside even the most seasoned experts.

Coined by Nicholas Naseem Taleb, the pioneering author and financial expert, it takes its name from the spotting of a Black Swan in Australia where conventional wisdom has always held that Swans are White and cannot be Black.

Just as the spotting of a Black Swan is a once in a lifetime event, similarly events such as the Covid 19 Outbreak too happen once in a while and catch everyone by surprise.

Did We Ignore the Early Warning Signs and Mock those who cautioned us?

Having said that, there is also evidence that there were early warning signals about the Covid 19 Outbreak both from within the United States and more importantly, inside China as well.

As is the wont, mainstream experts and mostly politicians worldwide dismissed the threat from Covid 19 early on, with some likening it to the Flu and nothing to worry about. Among the list of leaders around the world who made such comparisons are President Trump and the Brazilian leadership.

However, as we can see now, it is anything but an ordinary outbreak and the complacency with which it was dismissed initially is now responsible for the havoc it has brought on the world.

Moreover, Defence experts and leading business leaders such as Bill Gates have been warning us for a while about the dangers of a Pandemic such as Covid 19.

Indeed, in such conference last year, they explicitly warned the Western leaders about how a Pandemic such as the Covid 19 can disrupt the Global Economy in unimaginable ways.

In addition, in India opposition leaders such as Rahul Gandhi were imploring the government in February to take serious note of the approaching pandemic only to be mocked at.

The lesson from this is that it pays to not ignore dissenting voices and be so full of hubris that it eventually leads to one’s downfall.

Sometimes it Pays to Listen to Cassandra and Learn from Past Disasters

There is a term for such early voices that warn of disaster and it is Cassandra. It refers to the mythical character from Greek History who had a habit of making gloomy predictions and issuing warnings about events to come.

Just like the Black Swan events, Cassandra too kept on warning the Greeks of Impending Doom only to be dismissed outright and then later realising that the predictions was right.

Therefore, in the present context it is important to note that the Covid 19 Outbreak was anything but a Black Swan event and hence, countries such as Singapore and South Korea that were preparing for such events are now in a comfortable position whereas those ignored the early warning signs are now facing peril.

Indeed, there are past occurrences such as the SARS Outbreak, Ebola, and Nipah Virus in the last couple of decades and hence, world leaders cannot say that they did not have any reason to prepare for such eventualities.

Thus, this is another lesson that one must learn from the present Covid 19 Outbreak.

The Perils of Overreaction and Why Groupthink Can Lead to Doom

On the other hand, to be fair to the mainstream experts and our elected representatives, it is not always possible to prepare and implement drastic measures without a major crisis.

Imagine what would have happened if the world locked down at the first sign of trouble. So, one must also given the benefit of doubt to our leaders and hope that it is Better Late than Never.

Having said that, there is another lesson to be learnt from the present Covid 19 Outbreak and that has to do with not allowing Groupthink to take over.

Groupthink is a term that refers to the nearly unanimous and conformity that happens whenever there is a consensus among groups of people where dissenters are sidelined and everyone goes with whatever the leader and the followers decide.

While it is good to be disciplined, at the same time, one cannot have a Culture of Acquiescence wherein even bad decisions are implemented with any opposition.

This is especially the case in Asian countries and especially India, as culturally we are used to obeying authority and hence, remaining silent even when we know that we are on the wrong path.

Thus, the Covid 19 Outbreak teaches us that not every decision by our leaders is always the correct one.

Conclusion

Last, as the body counts mount and as the Infection spreads, a key learning is that in our hyper connected world, panic and mass hysteria sets in quickly and hence, we need leaders who can reassure us and make us feel calm with their poise.

To conclude, let’s hope for the sake of humanity and ourselves that the Covid 19 Outbreak would dissipate and peter out.


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The article is Written By “Prachi Juneja” and Reviewed By Management Study Guide Content Team. MSG Content Team comprises experienced Faculty Member, Professionals and Subject Matter Experts. We are a ISO 2001:2015 Certified Education Provider. To Know more, click on About Us. The use of this material is free for learning and education purpose. Please reference authorship of content used, including link(s) to ManagementStudyGuide.com and the content page url.


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