The “Black Swan” of COVID is phasing out in the U.S. Like other Black Swans (unpredictable events that are beyond what is normally expected) cited by Nassim Taleb, who introduced the concept in 2007 in his book by that title, it has disrupted civilization.
Now, businesses are preoccupied with the challenges emerging “post-COVID.” How long a timeframe the term “post-COVID” will designate is open-ended. The pandemic’s impact has been such a game-changer that the language of post-COVID could become a permanent marker, like “A.D.” or after-the-birth-of-Christ, to signify a new era.
Of course, the experts have been busy publishing reports about how post-Covid will play out. They range from McKinsey’s “How COVID-19 is changing consumer behavior – now and forever” to Euromonitor International’s “Top Global Consumer Trends 2021.”
The reality is that no one knows what will occur in any sector post-COVID. There are too many new variables and they create additional new variables as they interact with each other. For example, the acceleration of automation during COVID forces more early retirements which can glut the market with houses for sale.
But one thing is known. And that is that the trends created primarily or in part by COVID are what businesses are struggling to accommodate. At the top of the list are the new kinds of branding, operations, political, legal, governance and stock price questions generated by the mandate in the court of public opinion for corporate social justice. That one issue in itself can come to symbolize how effectively or ineptly the public relations industry serves clients in a time of so much change and myriad uncertainties.
As is well-known, Starbucks stumbled when banning Black Lives Matter logo apparel. Coca-Cola became embroiled in unwanted controversy in how it managed its diversity initiative. Both were creamed in the media. U.S. Senate Minority Leader Mitch McConnell had threated businesses with “serious consequences” if they continued to leverage their economic power in support of “far-left causes,” such as opposing the voting law in Georgia. In addition, in a polarized society, there is the potential for violence.
One way to override that turbulence with calm problem-solving is to apply the framework of that Black Swan derivative—the “Grey Swan.”
Essentially, as Investopedia defines the term, “Grey Swan” designates a development which is considered possible but not probable. That is unlike a Black Swan which was never even conceivable. No one anticipated an internet or a pandemic which took the form of COVID—both Black Swans. Also, unlike Black Swans, the Grey ones are not game-changers but can have significant impacts. Social activism could change a lot but is unlikely to have the scope of the coming of the internet.
Black and Grey Swans are such useful concepts because they let society off the hook from regret, blame and shame—at least the lion’s share of those kinds of distraction. How could business X or Y prepare for the internet if imagining the existence of such an entity was downright impossible? With Grey Swans, who can expect a business to include in its strategic planning everything that could be possible, but not probable? The risk analysis would be downright comical. So, internally and in the media, if public relations loops in successfully, the context could be blame-free.
Professional services firm Aon already leverages the concept of the Grey Swan. In an article in Business Insider, for example, it discusses how companies can approach the challenges in their supply chains created by COVID as Grey Swans. Obviously, that puts the focus directly on solutions. It is total pragmatism: Here is what the pandemic created. Now deal.
There are all kinds of ways in which a Grey Swan can form. And will form post-COVID.
For social activism, a key driver had been that the pandemic fostered a strong social cohesiveness in communities. The meme was: We are in this together. As Deloitte’s “Covid-19 Induced Business Trends: Preparing for the new normal” documents, business was integrated into that collective consciousness. The expectation was that it would have a political and social stance, just like humans. That value system was to be transparent. Other sources triggering corporate social activism range from socially conscious consumers, especially Millennials, to socially conscious investment firms. Regarding the latter, that way of screening investing, called ESG (Environmental, Social, Governance) in itself is a Grey Swan.
Obviously social activism introduces complex risk factors, including legalities. No surprise then, business is aligning with law firms on this one. Major law firms such as Paul Weiss launched practices to help their clients address the emerging realities. Paul Weiss’ Sustainability & Environmental, Social and Governance (ESG) Advisory Practice has as its mission: “to increase [clients’] resilience while simultaneously addressing social issues of importance to stakeholders.” Those stakeholders are not just investors. They include employees, contract workers, business partners, communities and planet earth.
However, the play-out of Grey Swans is not limited to managing risk. There is also the potential for huge opportunity. A classic example is when Grey Swan international competition upended the U.S. auto industry in the late 1970s. In response, at what was then called “Chrysler,” Chief Executive Officer Lee Iacocca adapted new systems such as just-in-time supply chains, installed an organizational culture in which all employees understood their job was to sell cars and put on the market the breakthrough minivan.
Sure, along the way there was bad press, including lots of doom and gloom that Chrysler was going to go out of business. But the leadership at Chrysler shook that off and put their attention on experimenting, doing course correction and developing best practices. Regret, blame, shame—there was not much of that. Optimism dominated. And top business schools did case studies on the lessons learned.
The combination of public relations and other sectors including law can guide business through Grey Swans such as social activism. Leveraging the Grey Swan concept for how to view the moving parts and address wrenches in the works can replace the old notion of “a crisis.” There might no longer be crises. Instead, those guiding business will size up the situation as simply a Grey Swan. “Crisis” has negative connotations, imposing blame on the business. Gray Swan is positioned and packaged as neutral.
Jane Genova is a ghostwriter, marcom results-getter and coach ([email protected]).