Frequently, we can meet various interesting surprises during project management. Both positive and negative. However, are you ready if the surprises that come tend is have a big impact and get out of hand? In some cases, this is called a Black Swan Event.
Black Swan in the realm of risk management itself was popularized by Nassim Nicholas Taleb in his book, The Black Swan (2010). According to him, Black swan is a term that refers to an event with a very small probability (can be almost unpredictable, at least with statistics) but can have a systemic and large impact. This term arose from the study of logic that all swans, which refers to real swan, are white not black. Then, when the black swan species was later discovered in Australia, the metaphorical ‘black swan’ emerged to describe something that had been mistakenly believed to be impossible.
According to Medium, Taleb describes the Black Swan as an event that has three basic properties:
1. An event with low probability
2. An event with a disproportionate number of impacts and consequences
3. An event that is explained in hindsight as if it were actually predictable.
The interesting side, no matter how great the mathematical and statistical calculations you make, the Black Swan can have an impact that shifts away from your predictions. Therefore, you and your team still have to adjust your response to this situation. In this situation, you are required not to be skeptical of all the predictions made at this time.
Don’t try to predict a specific Black Swan event with a specific outcome. Instead, open yourself up to letting possibilities play a role in your career. For example, when you are a director, don’t obsess over making the next highest-grossing film. Focus on making a lot of film scripts, observing flaws in your previous work, to making short films consistently and this can push you towards a positive Black Swan.
This also applies when preparing to deal with a negative Black Swan. The key is not only to protect ourselves from all forms of risks that we have identified, because the risks that we will actually face may be greater than the risks that have been identified.
Encouraging an Honest and Open Culture
Have you ever had a project that stops suddenly? The thing is, this suddenness can happen from a process that is not sudden. Frequently, the project team has actually realized that the project has actually been showing signs of failure in recent times, but deliberately covers it up. The reason is that they consider the crisis at that time to be an event that has been predicted and can be handled well, not a Black Swan.
Another reason was because the team didn’t want to get a ‘red’ status report from their boss. So, they make a report that the current condition of the project is good and give a report with a ‘green’ status, whereas the reality on the ground is the opposite.
Create a Clear Description of Project Objectives
Another reason behind the occurrence of Black Swan in the project is the project objectives description that is different between what the project owner, stakeholders, and the implementing team think. For example, the project owner thinks that the project will be completed faster because the priority he emphasizes is time. However, he found that the project was running behind schedule because the project manager emphasized quality as the priority of the current project. This is certainly dangerous, isn’t it?
If the project objectives are not mutually agreed upon and understood by all parties, this may lead to unpleasant surprises for those who realize that what they are getting is not what they really want. If this misunderstanding continued, then it was not impossible that a bigger impact like the Black Swan could occur.
Good Quality Gates
In this sense, quality gates can be interpreted as a number of points in the project life cycle when the steering committee or change board can decide whether to proceed with a project or not. In addition to document checking, some questions such as, “How do we know the current status of the project?”, “Why should we continue this project?”, “Are the problems of the business line still piling up?” will also be dug deeper.
In some cases, projects are only funded at the next quality gate after the project team has objectively demonstrated that budgets and resources have been allocated properly. Meanwhile, in projects with a looser system, projects are funded in advance (zero quality gate). Then, the next decision will be given to the amendment board to assess the feasibility of the project. They can stop it or actively withdraw the budget if negative changes over time make the project no longer deliver the value it needs.
Develop a Communication Plan To Reduce Uncertainty
Who likes uncertainty? Both you, the project owner, stakeholders, and vendors certainly don’t like it. Unfortunately, when an extreme event occurs, the reaction to the event is often more intense than the event itself. It could be due to panic and excessive fear, misinterpretation, etc. The Black Swan itself has the potential to create so much uncertainty that people can overreact to it. This extreme response can unfortunately have a more severe impact than the event itself. Such as losing customers, increasing the percentage of employee turnover, loss of brand reputation, and others.
To overcome the possible uncertainty created by the Black Swan, you can try the following methods:
1. Identify key stakeholders with whom you will communicate if a change occurs.
2. Determine the type of communication that will be applied to each stakeholder (eg official letters, social media, press releases, telephone calls, etc.).
Convey the essence of the message (eg steps to be taken, contingency plans, etc.).
If a Black Swan event occurs, a communication plan can be put in place to reduce uncertainty and reassure stakeholders that the organization has the resilience to withstand the impact of the event.