In 2022, due to the Russia-Ukraine Outbreak, various companies were on the verge to collapse. Companies were forced to curtail their operations and services in the 11th most powerful economy of the world. None of the Companies didn’t think that such a situation would occur where a major chink of their profit share will disappear. Such events are not preassumed by anyone and are unlikely to prevent. In this article, we will learn about three terminologies that are Black Swan, Gray Rhinos, and Silver linings.
While various Companies in addition to dealing with the impact of Europe and the emerging strategic struggle in Asia, multinational businesses had to handle a slew of long-tail political risks and conflicts in other geographies, including Africa and South Asia. Even as top management struggled to create capabilities in risk management and geopolitical resilience, the need to lift one’s gaze and look around the corner has become critical to strategy and performance. Scenario planning has been pushed to the back burner.
Reperceiving the Scenario
Reperceiving is the act of perceiving things again. This is a meta-mechanism in the practice of mindfulness for ethical decision-making and provides an overview of mindfulness research pertaining to ethical decision-making. According to experts such decision-making can overcome all the after-effects of such great wars like that of Russia-Ukraine. Such Geopolitical Scenarios can be categorized into three categories as mentioned above. The terms “Black Swan” and “Grey Rhino” are well-known and instinctively recognized by many Corporate leaders.
Black Swans
Black swans are well-known for unpredictable, high-impact events. Regardless of Russia’s overt military buildup in 2021, its full-scale invasion of Ukraine was likely the key case study in 2022. Potential black swans include a major economy’s political implosion, the forcible removal of a leader or government, a substantial regional military confrontation, an unusual climate disaster resulting in enormous casualties, waves of migration, famine, and another pandemic.
Grey Rhinos
Grey rhinos, in contrast to the unpredictable character of black swans, are likely events with tremendous impact. We can see these threats in the distance, but we don’t the time of their occurrence and the way of their occurrence. We’re certain they’ll come at us, causing material damage, but we’re not sure when or how much. Multiple grey rhinos may come at the same moment, resulting in an even more fittingly named “crash” of rhinos (a group of rhinos). The potential of regional conflicts in Asia growing amid greater strategic competition is one of the grey rhinos on the global radar. A substantial escalation in the Middle East, with cooling relationships and international and local pressure on certain regimes, might result in an increase in direct or proxy violence.
Silver Linings
In the midst of geopolitical dangers, businesses must take a step back and examine openings and opportunities that will allow them to operate in a secure zone while potentially gaining a competitive advantage. These “silver linings,”, can be delicate and easily obscured by storm clouds, but they are within reach of leaders who demonstrate strategic daring in the face of turbulence. One opportunity created by Russia’s invasion of Ukraine, for example, has been a major disruption of Europe’s energy market and the chance for a faster renewable-energy transition, in which Europe may potentially lead the globe. Another bright spot when geopolitical tensions hinder supply chains is the growth of pivot regions, such as India and Vietnam, offering extra investment options during “friend-shoring.”
Prevention: Observing-Scanning-Planning
Economies of the world should observe the three terminologies hand-in-hand. Various Aspects like team-building, Clear Vision, proper military planning (in case of invasion), and economic, political, and regulatory developments can be helpful while dealing with the same. Equipped with a targeted set of scenarios with key lookouts, narrowing down to one to two scenarios that fuse thought with action can be helpful. Specifically, the organization should engage in active contingency planning on a host of dimensions that include data and networks, internet protocols, people, partnerships, repatriation of funds, and security.
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