Swans, Swine, and Swindlers

Coping with the Growing Threat of Mega-Crises and Mega-Messes

Ian Mitroff, Can Alpaslan

• Publisher: Stanford Business Books
• Year: 2011
• ISBN:
  9780804781084
• Edition: 1
• Topic: Business
• Subtopic: Decision Making
• Index: Business

Swans, Swine, and Swindlers addresses a core, contemporary question: What steps can we take to better anticipate and manage mega-crises, such as Haiti, Katrina, and 9/11?

This book explores the concept of "messes." A mess is a web of complex and dynamically interacting, ill-defined, and/or wicked problems; their solutions; and our conscious and unconscious assumptions, beliefs, emotions, and values. The roots of messes can be classified as Swans (the inability to surface and test false assumptions and mistaken beliefs), Swine (the inability to confront and manage greed, hubris, arrogance, and narcissism), and Swindlers (the inability to confront, detect, and stop unethical and corrupt behavior). Working systematically with this concept and these classifications, authors Can M. Alpaslan and Ian I. Mitroff reveal that all crises are messes; one must learn to understand and manage them as such.

They then provide tools and frameworks that readers can use to more effectively deal with the crises of today and tomorrow. Drawing on ideas from research areas as diverse as human development, philosophy, rhetoric, psychology, and high reliability organizations, this book aims to be the definitive guide for a new era in crisis management. Therefore, it is a must-have for practitioners, scholars, and students who study and deal in real-life crises.

PART I

UNCOVERING ASSUMPTIONS

1

A CRISIS IS NOT WHAT WE HAVE BEEN LED TO BELIEVE

Every Crisis Is an Existential Crisis of Meaning

There is a central human experience that will shake us to the roots and that each of us must eventually face. Nobody likes to acknowledge or talk much about it. So we usually try to ignore it, wrapping ourselves in habitual routines to avoid having to face it. Since there is no ready-made term for this experience, I will call it the moment of world collapse. . . .

World collapse occurs when the props that have supported our life give way unexpectedly. Suddenly the meaning our life previously had seems to lack weight and substance and no longer nourishes us as it did before.

—JOHN WELWOOD, Toward a Psychology of Awakening

IN COMMON PARLANCE, a crisis is an unexpected event that causes, or has the potential to cause, severe loss of lives, serious injuries, and widespread destruction of property, and to exact serious financial costs. In addition, something is usually considered to be a major crisis if and only if it attracts serious media attention. Further, a major crisis also has the potential to destroy an individual or an organization, or to bring a major institution to its knees.

While the preceding definition applies to every crisis of which the authors are aware, it does not capture fully what a crisis does to those it affects. In this sense, while true, the definition is incomplete. In fact, the commonly held belief that there must be a single, universal definition of a crisis is wrong. If there were universal agreement on the definition and meaning of crises or “messes,” then they would not be “messes.” Instead, the varying meanings and definitions of crises provide valuable information about the assumptions that people make about crises and their prevention and containment.¹

If there is a common property that all crises share it is the fact that every crisis destroys the underlying assumptions (“props”) we have been making about ourselves, the goodness and the safety of our society, and the world in general. This is precisely why crises are so traumatic. In one fell swoop, they turn our lives completely upside down. They not only disturb but seriously threaten our very existence by undermining the bedrock assumptions that we use to give meaning, purpose, and a sense of stability to our lives. As a result, we feel deeply abandoned and betrayed. This is why every crisis is a deep existential crisis of meaning. In short, every crisis is a moment of world collapse.

A DEADLY EXAMPLE : OKLAHOMA CITY

On April 19, 1995, the Alfred P. Murrah Federal Office Building in downtown Oklahoma City was bombed. The result was that 168 people were killed, 19 of whom were children, and over 800 were injured. It was the deadliest act of terrorism on U.S. soil prior to the attacks of 9/11.

As horrific as the tragic loss of lives was, it became clear to the authors through analysis of countless hours of televised coverage plus many written accounts of the tragedy that the true definition and meaning of the crisis was rooted in something deeper and thus much less apparent. The bombing not only blew up a building and took countless lives, it ripped a set of basic, fundamental, taken-for-granted, largely unconscious assumptions out from under the citizens of Oklahoma City in particular and the United States in general. In other words, it was a true moment of world collapse. As a result, Oklahoma City revealed the existential dimensions of crises and tragedies and a whole different definition of them, which had been virtually ignored and unfortunately still is.

To see this, consider again the typical definition of a crisis.² A crisis is a sudden, unexpected event that has the potential to

1. cause serious injuries or diseases, and raise public health concerns and issues;

2. lead to deaths;

3. exact major financial costs;

4. destroy an individual or organization;

5. cause serious damage to a whole society;

6. attract serious media attention.

There is little doubt that Oklahoma City satisfied almost all of the components of the preceding definition. Notice carefully that a “potential crisis” does not have to satisfy all of the components in order to qualify as a “crisis.” For this very reason, the determination of what is a crisis is not an exercise in applying a static definition. Instead, it is part of an ongoing process or mess.

Thus, while the preceding definition applies, it became clear that something else was operating. Again, through our extensive media analysis, it became clear to us that prior to the tragedy, the citizens of Oklahoma City and the rest of the United States held at least three major assumptions as to why such an act would not take place on U.S. soil and, furthermore, would not be perpetrated by a U.S. citizen:

1. Terrorism does not happen in America, and certainly not in the heartland of America; terrorism only happens in Europe, the Middle East, and other dangerous regions of the world.

2. Americans are not terrorists, period! Therefore, an American would never commit an act of terrorism against fellow Americans, and certainly not on American soil.

3. Innocent men, women, and especially children will not be killed to “further the cause” of terrorists.

In other words, the tragedy was not only completely unexpected, it made no sense at all because it was completely unthinkable.

It is especially important to note that a major crisis does not merely destroy one or two of our basic assumptions. It simultaneously destroys all or nearly all of our important beliefs. Most of us can manage if one or two of our assumptions are destroyed, but we have a much harder time if a large chunk of our foundation is destroyed suddenly and at once.³

9/11 WENT EVEN FURTHER

Consider the assumptions that were destroyed by 9/11:⁴

1. The two oceans are a “protective moat” that can shield the United States from foreign terrorists; that is, foreign terrorists cannot and will not attack us on our home shores.

2. The U.S. government agencies that are supposed to defend us from attack can be depended upon to do their jobs and hence intercept terrorists before they can attack us; that is, they are competent, flexible, and innovative; they willingly share information among themselves; they integrate the information in a timely manner and get it to the right persons; and so on. For instance, the appropriate agencies will be proactive enough to pay attention to those who are attending flight schools and are learning merely how to take off planes but not to land them. In short, foreign terrorists cannot slip through the defenses of the United States.

3. Two of the central symbols of capitalism (the Twin Towers and Wall Street) and the symbol of national defense (the Pentagon) will not and cannot be completely destroyed and certainly not attacked simultaneously.

One could, of course, add other assumptions as well. But the point should be clear. Every crisis raises to the surface a set of background assumptions that we have been making, mostly unconsciously. And then, seemingly without warning, it quickly destroys those presumptions.⁵

A MORE GENERAL SET OF ASSUMPTIONS

As a result of the foregoing, it is not hard to see that every major crisis challenges and destroys a more general set of assumptions:

1. We are exempt from a particular set of crises by virtue of our location, a special set of circumstances, our industry and types of products, and so on. This is the “exemption clause” or belief; it is also the belief of why we, as a people, are special. The myth of exceptionalism is deeply enshrined in American history.⁶

2. Things will continue to behave as they always have; in other words, there is almost always a “continuity” assumption of some sort that expresses the belief that things will continue as they always have. For instance, we are fundamentally safe and secure and we will continue to be so. The future will be like the past. A common expression is, “Our business, industry, and products have never been attacked in the past; therefore, there is no reason to believe that they will be in the future.”

3. Certain things will probably never happen; this is similar to the “continuity” assumption in the sense that “discontinuities” are extremely rare events, or, in other words, they are “black swans.” As a result, we behave and think like Bertrand Russell’s “inductivist turkeys” that never realize that because they have not had their heads cut off for five hundred days in a row is no guarantee that they will never have their heads cut off.

4. We can trust people in general not to betray and to harm us. We can trust those in charge (the government, company executives, and so on) to do their duty to protect us. These are basic trust assumptions.

5. We can trust our organizations and institutions to function well. For instance, my company, and indeed, my entire industry (for example, the financial sector), can be counted on implicitly to be and to do “good,” that is, “do the right things.”

6. We can trust technology to protect us; in other words, technology works for us on our behalf. Like item 4, items 5 and 6 are different kinds of trust assumptions.

7. People in general share the same values and therefore will act, or not act, as we do; in short, not only can we trust our neighbors, we can depend on them because they are like us. This is obviously a similarity assumption.

A SENSE OF MORAL OUTRAGE

Unfortunately, crises do more than merely shatter our fundamental assumptions and hurl us into an existential funk. They trigger a long list of intense emotional responses and thereby produce a deep sense of moral outrage.

Consider the insurance giant AIG. It is certainly true that in terms of the billions of dollars given to AIG in order to bail it out, the millions of dollars in bonuses for the very executives that initially got us into the mess represents a tiny amount, approximately one-tenth of a percent. But this misses the whole point. Compared to the billions, the bonuses may only be a small amount, but compared to what the average person earns in his or her entire lifetime, they are huge. And they loom even larger given the millions who are out of work and have no paychecks at all.

To assume that people will respond calmly, coolly, and rationally to major crises would be laughable if it were not so far off the mark and if it didn’t add insult to injury. The fact that humans do not respond coolly and unemotionally is exceedingly important. It constitutes one of the biggest reasons why the economic profession as a whole failed to sense the current financial crisis: the basic models and modes of thinking that economists use are seriously deficient because they do not incorporate the fact that humans are governed by deep feelings and emotions.⁷ In fact, most economists either assume feelings and emotions away or focus on a tiny few. For instance, in Emotions in Finance,⁸ Jocelyn Pixley demonstrates that the field of finance has built its theories upon a base of four and only four emotions: fear, greed, trust, and uncertainty.

To anyone who knows even the very least about emotional intelligence, this is not only absurd but completely outrageous. First, there are obviously many more emotions than four (for instance, grief, happiness, joy, remorse, sadness, shame, pride, and so on). Indeed, the first mark of emotional intelligence is the sheer number of emotions that one can name and identify. To name only four emotions is itself a major sign of low emotional intelligence. Second, as a result, one of the least acknowledged reasons responsible for the current financial mess is the fact that the economics and finance professions have built theories that are impoverished emotionally. For instance, in transaction cost economics and agency theory (two of the major theories that are pursued by academics in business schools), individuals are assumed to pursue their own self-interest with guile, as well as deception, coercion, and fraudulent behavior.⁹ Economics and finance may delude themselves that one can build theories upon such meager bases, bu...

Table of contents

• Cover
• Title Page
• Copyright
• Dedication
• Contents
• Preface
• Part I: Uncovering Assumptions
• Part II: Managing Assumptions
• Part III: Applications
• Afterword
• Notes
• Index