November 9, 2004

News & Opinion: Wild Cards

By: 800-CEO-READ @ 4:56 PM – Filed under: Management & Workplace Culture

I was paging through a new book called World Out Of Balance: Navigating Global Risks to Seize Competitive Advantage by Paul Laudicina. He starts the book with a quote from Jack Welch - "Look at the world as it is, not as you might wish it to be." The book is about engaging again in strategic planning. The main chapters talk things like demographics, natural resources, and regulation.
The part of book that caught my interest was a section where he talk about "wild cards". Laudicina uses a definition created by John L. Petersen - "[Wild cards are] low-probability, extremely high-impact events that are potentially disruptive (negatively or positively), rapidly moving, global in scope, and intrinsically beyond the control of any institution, group, or individual."
Here are some examples:
  • Global Epidemic - A 1991 cholera outbreak in Peru cost the country $770 million. A 1994 plague outbreak in Surat cost India $2 billion. During the SARS outbreak, HSBC began using back-up trading floors that were originally intended for use during fires or earthquakes.
  • Country Disintegration - Consider Saudi Arabia. The control 25% of the world proven oil reserves. The country's unemployment is over 20% and there is no clear line of succession for a king who is over 80 years old.
  • Terrorist Resurgence - Need I say more?
  • Hacker Hell - After the Sasser worm stuck in 2004, branches of Westpac Bank in Australia had to rely on pen and paper to keep trading
  • Quantum Leap - What is possible as computers and biotech continue to bring innovation.

Have you included any of these in your strategic plan?