Has the world gone mad?

Talking to students at the start of this Autumn’s CIPR Crisis Communications Diploma it was impossible to ignore the kind of “end of days” feeling many of us have.  One student remarked “We are often saying in the office: has the world gone mad?”  

There was an excellent article on the subject in the Telegraph which fortunately has been made free to read. Here is my take on it from some of theories we talk about during the Diploma course.  

We should start with the concept of the ‘black swan’ event.  This idea of the unthinkable and therefore unpredictable crisis came about around the time of the 2007/8 financial crash when the global economy teetered on the brink of collapse.

However, there were people years before who were pointing out that the operations of the financial markets were extremely risky.  I wish I could claim I was one of them.  But well-known investor, Warren Buffet, was worried back then about derivatives – the way banks sought to manage risks – and in 2002 described them as “financial weapons of mass destruction.”  He warned that governments had no way to control or monitor the extreme risks these instruments raised.  He was right.

This idea was written about by two professors from the Wharton School of Business at the University of Pennsylvania: Robert Meyer and Howard Kunreuthe in their book “The Ostrich Paradox.”  The authors talked in terms of innate cognitive biases that make it difficult for us to prepare for the worse.

According to Meyer and Kunreuthe we are too short-term, a little bit too optimistic (it’ll never happen), forgetful (as Churchill once wrote: “Those who fail to learn from history are doomed to repeat it.”), prone to simplification and inertia.  There is also the powerful trait behavioural scientists refer to as social proof.  Humans are prone to the herd instinct and there is an in-built reluctance to stand out in terms of our behaviour.  So, when we are faced with an event so outside the norm we have a tendency so think if no-one else is doing anything about it why should I?  

These cognitive biases might explain why Covid was certainly not a black swan event for the UK government at least.  A pandemic had been right up there in the top left-hand quadrant of the risk register marked high risk and high impact for years.

But why are so many of these events seeming to happen all at once?  

For years there has been a concept called Normal Accident Theory – its time has come.  The theory came about as a result of an academic called Charles Perrow attempting to understand the nuclear accident at Three Mile Island.  The idea was that modern organisations are so complex, so inter-connected – called “tight coupling” – that when one part goes down it triggers a type of domino effect.  

If we apply this idea to modern societies with our globalised, connected, just in time economies and with the expectations of stakeholders being so high but also so risk averse we may get some insight into the phenomenon we are now seeing. 

Always join the dots – our stakeholders certainly do. And perhaps we need to challenge those lovely linear models of how crises develop from unresolved issues which meet a trigger event and morph into a crisis which is then successfully resolved. In today’s world getting through a crisis is more akin to being able to spin several plates at once and never really being sure which one will crash to the floor first.

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