This week Charlie talks about ‘black swan events’ and the possibility of ‘blue swans’ being out there within the world of Business Continuity.
We know that black swans exist so we should not be surprised if we come across one, although many of you, like me, have never seen one. In the same way there have been a couple of events in the last couple of weeks which point me to the possibility of blue swans being out there.
The term ‘black swan events’ is based on an ancient saying which presumed black swans did not exist, however the saying was changed to Blue Swans after black swans were discovered in the wild. The black swan theory was developed by Nassim Nicholas Taleb and his theory says that a black swan event “is a metaphor that describes an event that comes as a surprise, has a major effect, and is often inappropriately rationalised after the fact with the benefit of hindsight” (Wikipedia).
I have been working with a number of schools and colleges helping them develop and exercise their response to a number of events that they could face. The events we have been looking at have varied from how to lock down the school in the response to an armed intruder, to a bus crash of pupils on a school trip. Some of the exercises were prompted by the stabbing and death of Bailey Gwynne at Cults Academy in Aberdeen six months ago.
One of the risks we looked at was the loss of a specialist classroom such as science or domestic science as well as the loss of the whole school. With some of the large secondary schools having 1000 plus pupils, finding alternative accommodation during exercises has been hard. Recovery was often complicated by many of the schools being PFI (private finance initiative) schools. They contract out the requirements of finding alternative accommodation on the school management company and not the local authority who are responsible for providing education.
We developed RTOs (recovery times objectives) for how quick all the different years and types of education to be back, which varied from council run nurseries for babies (non statutory requirement) having the longest RTOs, to children taking exams having the shortest RTOs. There was always a large communications element within the plan as parents had to be kept informed of what was going on as well as the pupils and staff. When we exercise the plans we always like to keep scenarios realistic so we envisaged one school being lost at a time. With large schools it was a stretch of the scenario to say we had lost the whole site as the buildings were often large or campus style with several buildings on the same site.
As a scenario, I would never have got away with the loss of several schools at once, as those being exercised would not believe this would happen. I also suspect most, if not all Local Authorities, would not have multiple losses of schools on their risk register.
Within the Edinburgh Council area, we have the exact scenario, 17 schools have been closed due to them being deemed unsafe owing to alleged poor construction. I heard on the radio today that some schools will be out of operation for several months and that some of the lower secondary school years are still at home awaiting being told when their schooling will be resumed. This will have a knock on effect to the wider community as parents may have to stay at home to look after them.
The second event is the leaking of the Mossack Fonseca papers which is causing extreme discomfort to all those who have money in offshore accounts. With 11 million documents leaked to journalists, there are plenty of revelations which have not yet come to light and this incident will run and run. I was reading in the Economist magazine that tax authorities and governments all over the world are looking for wrongdoing highlighted by the papers.
Once they have looked at those with the money, they will start to look at the financial institutions which may have facilitated or moved the money. As a number of banks have had huge fines for facilitating money laundering, many others are scrambling around looking to see their exposure to this scandal. Referring back to my bulletin a few weeks ago entitled ‘business v business continuity’, this may not be a business continuity event but I suspect if financial institutions are being investigated their crisis teams will be carrying out crisis communications. I suspect those who had money offshore and many banks thought this information would never be revealed.
The Mossack Fonseca event is perhaps a little more predictable than the school losses as there have been a number of leaks of sensitive information, such as the Edward Snowdon intelligence files leak, however this is by far the largest ever leak.
I think for us business continuity people, fate (or whatever you like to call it) will throw up new and different events which are difficult to predict. To me it underlines the importance of having good robust business continuity plans in place for dealing with any incident even for Blue Swan events where we cannot imagine the scenario happening.