Articles

Preparing for the Unknown Unknowns

LONDON – We live in perilous times. Just as we seem to get our bearings, something happens to make us feel as if our legs have been knocked out from under us. Actions and events often are intertwined, and what happens on one level – affecting individuals, states, economic sectors, and companies of all sizes – may have repercussions on others.

The recent terrorist attacks in Paris are a case in point, affecting not only the families and friends of the victims, or even only the people of France. The reverberations are being felt around the world, and they will continue to have an impact – far beyond Europe – on public policy, electoral politics, media freedom, and more.

The attacks came at a time when the world traditionally tries to make sense of the year ahead – to forecast the risks that lie in wait, the opportunities that will arise, and the challenges that will have to be overcome. But what about longer-term risks? Do events like the Paris attacks show that forecasting them is impossible? Or did the attacks expose precisely the type of risk that long-term projections should identify?

The World Economic Forum has just released its “Global Risks 2015” report which attempts to predict and rank the biggest risks that the world faces over the next ten years. The WEF’s focus is squarely on the macro level. For example, “the biggest threat to the stability of the world in the next ten years comes from the risk of international conflict.” And the menace of war is followed by a raft of social, environmental, geopolitical, technological, and economic risks and trends.

But all of these risks will be felt on an organizational, and ultimately, individual level as well. That is why we spend time in conference rooms and around kitchen tables trying to identify and mitigate them. And yet we also know that the pace of change is faster than ever before, and that governments, businesses, and households are finding it increasingly difficult to keep up. Beneath all of our identifying, quantifying, and mitigating of risk lies the undeniable and timeless truth that the only constant is change.

For Heraclitus, change was the fundamental principle of life. Machiavelli referred to it as fortuna: the events that shape us and determine our wellbeing are often beyond our reason and control. Though we can attempt to plan for change, we cannot always predict the precise nature and time at which it will occur.

Moreover, for all the risks that we can and do plan for, it is those for which we cannot prepare that can do the most damage. That is why, alongside all of the identifying, quantifying, and mitigating, we must also embrace the idea that not all change can be clearly foreseen and planned for. The implication is that we must instill in our families, organizations, and states the resilience and tools needed to act effectively in times of crisis – and thus to minimize the potentially damaging impact of unexpected change.

This ethos will also help us maximize the potential benefits of such flux. After all, without unforeseen change, much of human endeavor would be fruitless, and innovation would be unnecessary.

Shocking things like the massacre at Charlie Hebdo in Paris happen, and they seem to be happening more frequently than ever. They turn our world upside down and make us question our sense of who we are. 

It is at such moments that we demonstrate our ability – or lack of it – to confront the unexplained, the unplanned, and the unfathomable. At the same time, such moments remind us that future generations ultimately will judge us not on the basis of what we accumulated – whether personally, as organizations, or as states – but by the impact we had on those around us, and by how well we responded to their needs.

In perilous times, when the emergence, timing, and diffusion of risks can have a paralyzing effect, what matters is not simply what we accomplish, but how we accomplish it. In such times, the value we create cannot be measured only in terms of money. More important is how much stronger, more capable, and more resilient we help our colleagues, partners, children, and fellow citizens become. Perhaps the main risk this year – and in the decade ahead – is that we lose sight of this fundamental truth.

Lucy P. Marcus is CEO of Marcus Venture Consulting.

Copyright: Project Syndicate, 2015.

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