World Monitor Mag, Industrial Overview WM_November_2018_WEB_Version - Page 82

additional content Planning for the Unexpected Typical crisis planning focuses on specific potential shocks. But how do you prepare for an unforeseen “asymmetric” threat — one that comes out of nowhere, with no rule book to follow? by Paul Wolfowitz, Kristin Rivera, and Glenn Ware If you’re a government or business leader, you probably spend much of your time trying to anticipate threats and preparing for them. (In a 2018 PwC survey of chief executives on crisis management, 73 percent of respondents said that they expect to be hit by at least one crisis in the next three years.) You know that heading off a crisis is less difficult and expensive than trying to fix the damage after the fact. Yet for all the time and money spent on crisis prevention, companies and communities are still regularly blindsided by terrible events that somehow slip through the cracks. Consider, for example, factors that affected the preparedness for two well-known, relatively recent disasters: • When Hurricane Maria, the most powerful storm to hit Puerto Rico in nearly a century, made landfall on September 20, 2017, it was known that rescue and recovery would be difficult. But the statistically improbable circumstances of the storm season exacerbated the crisis. Within the previous month, Hurricane Harvey had struck Texas and Louisiana, and Irma had ravaged Florida. This left rescue and recovery agencies overburdened and exhausted. Relief efforts lacked the staff, supplies, private contributions, and administrative attention they might otherwise have had. • The October 1, 2017, massacre in Las Vegas circumvented the conventional security measures for large outdoor concerts. Nobody planned for a scenario in which a heavily armed shooter would begin firing from the window of an adjacent high-rise hotel. Resulting in more than 900 casualties, including 58 deaths and 422 others wounded by gunfire, this was the deadliest mass shooting by an individual in U.S. history. In hindsight, the causal logic of a crisis — how one occurrence led to another, and then another — is often clear. That does not mean it could have been easily predicted, let alone prevented. The combination of factors at play gives the event a high level of asymmetry: the seemingly low probability of the event versus the high cost of preparing for such an event and the immense costs and destruction if it occurs. (The 80 world monitor military term asymmetric threat, which refers to attacks by small groups on large countries, is just one type of asymmetric event described in this article.) Most catastrophes have some asymmetric aspect. The devastation rarely happens the way people think it will: It isn’t possible to keep track of all the factors or anticipate how they will combine. With destructive wildfires, for example, factors such as wind velocity, the materials of the underbrush, and the temperature at night interact in ways that physicists don’t fully understand, and that make the blaze unpredictable. In other natural disasters, escape routes can be unexpectedly blocked — as they were during the eruption of the Kilauea volcano in Hawaii in May 2018. Even in deliberately generated threats, such as some of the cyber-attacks of early 2018, there are surprises. Millions of home Wi-Fi routers in the U.S. and Europe were targeted, a move that wasn’t widely anticipated. This unexpectedness is even true of major geopolitical crises, including wars. As of late 2018, for example, many major corporations undoubtedly have contingency plans in place for war on the Korean peninsula, or for more open trade war between China and the United States. They know events like these are unlikely, but if they occur, they could have global impacts on a scale not seen since the 1940s — disrupting trillions of dollars of trade, shutting down sea lanes, causing massive casualties, and displacing millions. Unfortunately, most contingency planning is predicated on recognized signals of pending conflict: breakdowns in diplomacy, the mass movement of troops, the deployment of naval assets, and so on. All of these involve substantial lead times. The plans are based on having time to prepare. But a real war, on the Korean peninsula or elsewhere, could start accidentally and suddenly, triggered by some small factor, in an asymmetric way. Global businesses, with their multifaceted international value chains, might be among those affected first by any resulting conflagration. Threat Ecosystems and Meta-Readiness