Black Swan
or Red
Herring?
Low Frequency/High Severity Incidents: Black Swan or Red Herring?
Texas Emergency Management Conference 2012
Randy Templeton (MA, CEM, MCP, MEP, MFF)
Business Continuity and Emergency
Management Coordinator
Texas Dept. of Family and Protective Services
Randy.templeton@dfps.state.tx.us
Low Frequency/High Severity Incidents: Black Swan or Red Herring?
Herring?
Texas Emergency Management Conference 2012
• To have a discussion of perspectives
and viewpoints for considering
preparation and planning for LF/HS
incidents
• Not really here to teach you
anything—I’d rather stimulate your
thinking!
Low Frequency/High Severity Incidents: Black Swan or Red Herring?
Texas Emergency Management Conference 2012
“The first responsibility for any
leader is to define reality” –John Maxwell
Low Frequency/High Severity Incidents: Black Swan or Red Herring?
Texas Emergency Management Conference 2012
Impact
Q1 incidents, though severe, are also frequent. The implications of
frequency are that organizations are likely to have devoted
substantial resources to address the problem; and, by reason of
practice, personnel are typically skilled in making corrections quickly
to restore function.
Q1
Frequency
S
E
V
E
R
I
T
Y
High
+
Low
Q2 (+,-)
Q1 (+,+)
Q3 (-,-)
Q4 (-,+)
-
+
FREQUENCY
Low Frequency/High Severity Incidents: Black Swan or Red Herring?
Texas Emergency Management Conference 2012
High
Q2 incidents are infrequent and severe--a dangerous
combination. The lack of frequency often means that protocols,
tools & equipment, procedures may not be in place, & personnel
may not have developed KSAs. These reasons make Q2-type
incidents the ideal models for training and exercise.
Impact
High
+
Q2
Frequency
S
E
V
E
R
I
T
Y
Low
Q2 (+,-)
Q1 (+,+)
Q3 (-,-)
Q4 (-,+)
-
+
FREQUENCY
Low Frequency/High Severity Incidents: Black Swan or Red Herring?
Texas Emergency Management Conference 2012
High
Q3 incidents are neither severe nor frequent, and rise
only to the level of "occasional nuisance." Few
resources or attention should be devoted to Q3
problems.
High
Impact
+
Q3
Frequency
S
E
V
E
R
I
T
Y
Low
Q2 (+,-)
Q1 (+,+)
Q3 (-,-)
Q4 (-,+)
-
+
FREQUENCY
Low Frequency/High Severity Incidents: Black Swan or Red Herring?
Texas Emergency Management Conference 2012
High
Q4 issues are not severe, though frequent. These often
justify improvement/mitigation projects to decrease
frequency of occurrence, thus converting them to Q3
occasional nuisances.
Impact
High
+
Q4
Frequency
S
E
V
E
R
I
T
Y
Low
Q2 (+,-)
Q1 (+,+)
Q3 (-,-)
Q4 (-,+)
-
+
FREQUENCY
Low Frequency/High Severity Incidents: Black Swan or Red Herring?
Texas Emergency Management Conference 2012
High
These are “Wild Card” or “Black Swan” incidents.
Whether local or global, these incidents are profoundly
severe in some aspect of their nature that they change
the society, the culture, or even the course of human
life/history.
Impact
Q5
Frequency
Low Frequency/High Severity Incidents: Black Swan or Red Herring?
Texas Emergency Management Conference 2012
Impact
These incidents are not severe or frequent, but they
are impactful—typically cultural or attitudinal.
(Example: Kennedy assassination, Woodstock, moon
landing, etc.)
Q6
Frequency
Low Frequency/High Severity Incidents: Black Swan or Red Herring?
Texas Emergency Management Conference 2012
• “Low probability, high impact
[incidents] that, were they to occur,
would severely impact the human
condition” (John Peterson, “Out of the Blue”);
• “…An [incident] that is believed to be of
low probability of materializing but if it
does…will produce a harm so great and
sudden as to seem discontinuous with
the flow of events that preceded it”
(Richard A. Posner, “Catastrophe”;
Low Frequency/High Severity Incidents: Black Swan or Red Herring?
Texas Emergency Management Conference 2012
• When we say “Low probability…” we
typically add the qualifying elliptical
clauses, “…in my lifetime” and/or “…in
my experience;”
• Catastrophes on a global scale are an
established part of earth’s history;
• “Low probability” is more appropriately
“Unknown probability” in many cases.
Low Frequency/High Severity Incidents: Black Swan or Red Herring?
Texas Emergency Management Conference 2012
•
•
•
•
•
•
•
•
•
(Usually) Sudden onset
May be foreseeable or not, warning or not
Solutions (if any) are often complex
Difficult to visualize; Hard to imagine response
Punctuations in the system
Can originate anywhere, but effect everywhere
Can be driven by perceptions
Can be either/both positive and negative
Difficult to convince others
Low Frequency/High Severity Incidents: Black Swan or Red Herring?
Texas Emergency Management Conference 2012
• Can catalyze or have synergistic effects on
other wildcards
• We are inventing the possibility of new
wildcards
• Some wildcards are “too big to let happen”
• Challenge conventional wisdom, the “official
future”
• Are game-changers in the biggest sense
Low Frequency/High Severity Incidents: Black Swan or Red Herring?
Texas Emergency Management Conference 2012
• If you don’t think about wildcards before
they happen, all of the value of thinking
about them is lost!
• Understanding how to think about
problems is as important (or more!) than
solving all problems.
• Accessing and understanding information
beforehand is key!
• Extraordinary events require extraordinary
approaches.
Low Frequency/High Severity Incidents: Black Swan or Red Herring?
Texas Emergency Management Conference 2012
The Law of Apocalyptic Limitation: “No
prediction of doomsday can be accurate
except the last one.”
Low Frequency/High Severity Incidents: Black Swan or Red Herring?
Texas Emergency Management Conference 2012
1. The nature of human cognition
– Shared mental models of how the world works
– Difficulty of discounting the value of events that
will take place in the indeterminate future
2. Poor or missing incentives to prepare
– Hedging against the future is costly
– Long-term payoff vs. immediate comfort
3. Institutional barriers
– Solutions require collective action where there is
no basis for trust
– No theory of sharing the load, pooling resources
or decision-making authority
Low Frequency/High Severity Incidents: Black Swan or Red Herring?
Texas Emergency Management Conference 2012
4. Imagination costs: mental exertion to think
about what we have not experienced
5. Induction fallacy (“I’ve never seen a black swan,
therefore they do not exist”)
6. Optimism bias/technological optimism
7. Short-sighted world view (20thvs. 21st century)
8. Short-term world view (“Not in my lifetime…”
9. Confusing “frequency” and “probability”
10. Chicken Little Syndrome (“doomsters”)
Low Frequency/High Severity Incidents: Black Swan or Red Herring?
Texas Emergency Management Conference 2012
11. Full plates: tyranny of the urgent
12. Resource scarcity
13. Cultural Conditioning (e.g., “science fiction,”
optimism backlash)
14. “One Risk at a time” fallacy (Either/Or thinking)
15. Dominant risk fallacy: “If risk A is > B, no
attention should be paid to B.”
16. “Probability Neglect”—inability to respond
rationally to very-low-probability risks.
17. Collective action difficulties
Low Frequency/High Severity Incidents: Black Swan or Red Herring?
Texas Emergency Management Conference 2012
“A related distinction to bear in mind is
between notional and motivational belief.
It is possible to affirm a proposition on
which one would never act, simply because
the proposition was not felt deeply enough
to impel action. Everyone knows that he or
she will die someday, but a great many
people do not act as if they know it.”
Low Frequency/High Severity Incidents: Black Swan or Red Herring?
Texas Emergency Management Conference 2012
“Imaginative thinking must also be able to
cope with issues that are possible but are
also, by their nature, unthinkable. Perhaps
their consequences would be
horrible…[perhaps] not so bad anyway.
Hope vacates judgment. The faster we get
over denial, the sooner we can deal with the
issue.”
Low Frequency/High Severity Incidents: Black Swan or Red Herring?
Texas Emergency Management Conference 2012
You know, there are some things
that you just never think of...
Like Mt. Rushmore
from the Canadian
side:
“In theory, there is no difference between theory
and practice. In practice there is.”
--Yogi Berra
Low Frequency/High Severity Incidents: Black Swan or Red Herring?
Texas Emergency Management Conference 2012
• The more critical your organization’s
mission to life, health and well-being, the
more time, resources and variety of your
Q2 planning.
• In a crisis, should your agency do more, or
less, or the same?
• Is there ever a time when it is appropriate/
acceptable to turn out the lights and go
home? (BOKYAG Principle)
Low Frequency/High Severity Incidents: Black Swan or Red Herring?
Texas Emergency Management Conference 2012
• Purposeful/Intentional monitoring of the
internal and external environments.
• Reaching out to individuals and sources
from multiple disciplines who think
differently and use a variety of filters to
make sense of information (open source
fusion).
• Used for detecting early signs of both
opportunities and threats.
Low Frequency/High Severity Incidents: Black Swan or Red Herring?
Texas Emergency Management Conference 2012
• Three Questions:
– What are the three most important wildcards for me,
my family, community, society or organization?
– Can they be anticipated?
– Is there anything we can do to prepare?
• STEEP Model: social, technological,
environmental, economic and political.
• “Scenario thinking”
• “Choice Structuring”
Low Frequency/High Severity Incidents: Black Swan or Red Herring?
Texas Emergency Management Conference 2012
• Deal with the paradox.
• EMs should routinely examine themselves:
“What am I not seeing?”
• Practice changing before you have to.
• Allot/Guard some wildcard reflection and
planning time.
• Ashby’s Law of Requisite Variety: “The
capacity to accommodate environmental
change depends on the variety available
inside the organization.”
Low Frequency/High Severity Incidents: Black Swan or Red Herring?
Texas Emergency Management Conference 2012
• Wildcards are by their nature “unthinkable.”
• EMs should guard against blinders that affect
others
• EMs should develop strategies for making a
case for some form of wildcard planning
• “Eyes wide open” because we do not know
from where the next threat will come.
Low Frequency/High Severity Incidents: Black Swan or Red Herring?
Texas Emergency Management Conference 2012
• Ability to survive in the long-term; bending without
breaking; “ evolvable.”
• Capability to turn threats into opportunities prior to
their becoming either.
• Defining dimensions are resourcefulness, robustness,
and adaptiveness
– Resourcefulness: “Work-arounds” for technology
– Robustness: Redundancy and diversification
– Adaptiveness: “Big Chief tablets and fat pencils”
• “Resilience Gap” Analysis: Fault Tree
– “The world becoming more turbulent faster than we can
build our resilience.”
– “The essence of being resilient is to learn without
experience.”
Low Frequency/High Severity Incidents: Black Swan or Red Herring?
Texas Emergency Management Conference 2012
•
•
•
•
•
Imaginative thinking
Resource-scarce innovation
Robust design
Adaptive fitness
Sisu (collective toughness, inner
strength—scrapiness!)
Low Frequency/High Severity Incidents: Black Swan or Red Herring?
Texas Emergency Management Conference 2012
Resource Requirements: What Do We Need
to Function?
AND
People
Factors
Circumstances
Factors
Tools
Factors
Performance Factors
(How Well/To What Degree)
AND
AND
AND
AND
Training/Specialty/Certification
Appropriate Authority/
Authority/Licensure
Licensure
Number Sufficiency
 Safety/Health/Nature of Threat
 Mobility/Access Dependent
 Communication Dependent
 Client/Customer Centeredness (e.g., clients
present vs. evacuated)
 Administrative Support Dependant
 Urgency/Danger to Clients
 Task Volume/Calls for Service
 Adversarial/Non-Adversarial/Regulatory
 Public/Transparency
Lowof Government
Frequency/High
 Computer/Internet vs. Paper Record(s)
 Telephone/Cell Phone
 Vehicle Appropriate for the Circumstance
 Shields/Barriers Available
 Facilities/Office Space
 Access to System Records (secondary)
 Stocked Resources (diapers, formula, car
seats, walking canes, etc.)
 State and Federal Statutory Mandate
 Mission Essential Functions
 Business Continuity Plans and
Measures
 Necessary to "Safeguard Life and
Health"
 Favorable Public Opinion
Severity Incidents: Black Swan or Red Herring?
Texas Emergency Management Conference 2012
“The more varied and intense the
challenges that the organization can cope
with, the more robust it is. Robustness is
the capacity to accommodate multiple,
different futures.” Liisa Valikangas
Low Frequency/High Severity Incidents: Black Swan or Red Herring?
Texas Emergency Management Conference 2012
References:
Peterson, John L., Out of the Blue
Posner, Richard A., Catastrophe: Risk and Response
Taleb, N., The Black Swan: The Impact of the Highly
Improbable
That’s All Folks!!!
Low Frequency/High Severity Incidents: Black Swan or Red Herring?
Texas Emergency Management Conference 2012