Meet the Gray Rhino
Imagine that you’re on safari in Africa, where you’ve traveled far for a chance to see a rhinoceros alive before it’s too late. The Western black rhino was declared extinct in 2011, after five years without a sighting, and the number of all remaining black rhinos is in the low thousands. You know time is running out. You’ve seen the grisly photos of dead rhinos, with their horns brutally hacked off of their faces by poachers to be traded in Asia at a dearer price than that for cocaine or heroin.
It’s been three days, and you and your two best friends are anxious to see what you came for, to shoot a prize trophy not with a gun but with your top-of-the-line camera. The sun is so fierce that you can see the heat shimmering in the air. But you and your friends are determined, so focused on your mission that you ignore your guide’s instructions and drift away while he’s not looking.
You’re nearly ready to give up and return to the group. But, suddenly, there they are: a rhino cow and her calf. The massive mother flicks away flies with her tail and her long ears. You realize that you’ve forgotten to breathe: the very definition of a breathtaking sight.
The calf is several yards away from the mother, who is looking in the other direction. You creep closer, trying to get just the right angle. Getting a picture with your telephoto lens is one thing, but a close-up would be worth the risk. You forget everything the guide has told you about avoiding startling the rhinos by keeping out of their immediate territory, staying downwind, and being quiet. They’re more afraid of you than you are of them, he’d said.
Your friends are also too excited to remember the admonition to be quiet. “Try to get him to look at you so we can get a picture of his face,” one whispers. Without thinking about the consequences, the other friend whistles. The calf looks your way, but, unfortunately, so does the mother. That’s when you realize your mistake. You’ve disturbed a rhino cow. Worse yet, you’ve managed to get closer to her calf than she is. The baby rhino quickly scampers back to her side, but she’s still angry. She shifts her weight from one side to the other as she decides what to do.
That’s the least of your problems, though, because a bull rhino has appeared nearby, and he has noticed you, too. He’s easily half again as big as the cow. He lowers his head and paws the ground with his left hoof, preparing to charge. The tip of his horn is pointed right at you as he gathers all two tons of his weight and prepares to launch himself in your direction.
You’ve already ignored the advice the guide gave you—that the best way to avoid being charged by a rhino is not to provoke the animal in the first place. Once the rhino charges, it’s nearly impossible to stop him. But it’s too late now. The rhino has taken his first steps, and starts accelerating to his top speed of close to forty miles an hour.
As he bears down on you, you freeze. What to do? You could climb a tree, but there is none high or strong enough. Throw something in his path? Can you make enough noise to scare him? You could run in a zigzag pattern or in the opposite direction, but the heat has sapped your energy. If you were close enough to the safari vehicle, you could get the driver to put the pedal to the metal, but you’ve wandered too far from the group for that. You look at your friends for ideas, but they’re paralyzed, too. Your final option is to wait for the rhino to get close and then jump out of the way, counting on his inability to turn quickly to save you from being trampled. If there is one thing you must remember about what to do when a rhino charges, your guide has told you, it is this: Do not stand still. Freezing is not an option. But, so far, by (seemingly) making no choice that’s what you’ve chosen to do.
Thinking about what to do when facing a rhino’s charge is very much the way many leaders approach an impending threat, whether it’s a tectonic geopolitical shift with implications for the future of the world as we know it; a market disruption or a management challenge that affects the future of a company, organization, country, or region; or a personal decision with consequences for us or our families. When crisis looms, leaders need to make decisions quickly. Each choice depends on what happened beforehand; every error compounds the stakes. Good decisions ahead of time—like staying away from potentially angry rhinos—make all the difference. Once mistakes have been made, the stakes rise and the options narrow to the point where the choices are not between good and bad but among bad, worse, and almost unthinkable.
A Gray Rhino is a highly probable, high-impact threat: something we ought to see coming, like a two-ton rhinoceros aiming its horn in our direction and preparing to charge.
Like its cousin, the Elephant in the Room, a Gray Rhino is something we ought to be able to see clearly by virtue of its size. You would think that something so enormous would get the attention it deserves. To the contrary, the very obviousness of these problematic pachyderms is part of what makes us so bad at responding to them. We consistently fail to recognize the obvious, and so prevent highly probable, high-impact crises: the ones that we have the power to do something about. Heads of state, CEOs of businesses and organizations, like all of us, are often worse at handling Gray Rhinos than they are at acting swiftly when an unexpected crisis arises seemingly out of the blue. This has huge and dangerous implications for leaders, who are particularly vulnerable to threats they ought to see coming but nevertheless fail to recognize and react to in time.
The Problem with Predictions: Unleashing Denial
Don’t be afraid to be wrong. Most predictions are wrong. We’re particularly likely to make mistakes when we look to those around us to shape our views, which, given human nature, is far more often than not. Outlier predictions are crucial in bucking the herd and seeing things that are obvious but not recognized.
Curb your enthusiasm. Humans are more likely to believe an optimistic prediction than a negative one. So if you find yourself wearing rose-colored glasses, try another filter and see if it fits better.
Predictions are complicated. Our relationship with predictions can get in the way of recognizing highly probable events.
Seek the wisdom of crowds. Pulling together predictions from independent sources creates a more accurate picture of reality.
We can learn. Practice makes perfect; applying what we know about our biases can help us make better predictions.
Muddling: Why We Don’t Act Even When We See the Rhino
Muddling is expensive. The old saw “an ounce of prevention is worth a pound of cure” applies here, whether in delayed infrastructure investments, preventive health care, financial crisis, or wherever any number of other obvious dangers are involved.
Consider timing. There are costs to acting too soon as well as too late, though we are less likely to act too soon than we are to act too late. Include opportunity cost in your analysis of whether to wait or act.
Change incentives. Make it worth people’s while to solve problems using carrots or sticks. In a company, set key performance indicators to reward employees for addressing problems early on and to penalize them if they get out of hand. Increase rewards for preventing problems in order to remove some of the obstacles to acting in time in the face of likely disaster.
Spread costs fairly. If you know that you’ll have to throw one group of people under a trolley for the sake of the greater good, find a way to ease their pain.
Account properly for costs, savings, and investments. Change accounting systems so that policy decision makers can take credit for investments that create savings or profits in the future. Include an “avoided costs” budget line.
Sometimes muddling is the only choice, though not nearly as often as many politicians would like us to believe.
Diagnosing: Right and Wrong Solutions
Size up your rhino. Different kinds of threats require distinct strategies.
Define the crisis. An approaching Gray Rhino may be a threat for one group but not for another. If the people with the power to act are not acting, reframe the threat in terms that matter to them. Reframe threats as opportunities.
Information creates a powerful incentive for change. Use radical transparency to frame problems and raise the cost of being a laggard.
Don’t rest on your laurels. Some of the companies that have solved one problem become complacent and thus vulnerable to a later threat.
You won’t always get the answer right at first. Every error is a step toward the right answer. Sometimes what seems to be a misstep is actually a path to the solution.
Panic: Decision-Making Facing a Charging Rhino
Herd behavior in times of panic throws us right into the path of a Gray Rhino. Panic can magnify the original problems and turn a single rhino into a crash. It can catapult us backward, past denial to outright hostility and aggression, getting in the way of any progress that has been made toward solutions.
Create trip wires against irrational exuberance. Set into motion “auto-pilot” threat responses that our denial reflex might keep us from doing on our own.
Raise the stakes earlier. A stitch in time saves nine, so to speak—and the sooner you can create a sense of urgency, the lower will be the cost of solving a problem.
Learn from epidemiology and hurricane, tornado, and tsunami warnings: inoculate; set out road maps for responding; and train people to act automatically—like midwesterners taking cover in the basement when the tornado sirens sound, or schoolteachers getting an annual flu shot.
Beware the rhino’s horn. Alleged (wrongly) to be an aphrodisiac, the horn is something to be used with caution. Forcing a crisis can reduce the total cost and speed a resolution, but it also can wreak havoc.
Action: The “A-ha” Moment
By the time you act, it may be too late.
Measure. Taking stock of the size of the problem can make a path to solving it clear.
Break it down. If you cannot solve the whole problem, choose a manageable portion. Similarly, break the decision down into the smallest possible effective unit—a state versus a country, a city versus a state, a company versus an industry, a single unit of a company.
Turn a threat into an opportunity. Our cognitive biases make us more likely to respond to the possibility of profit than to simply avoiding a problem.
It may take drama to get attention, but often surprisingly little drama to get results. As MillerCoors found, simple behavioral changes led to big savings.
After the Trampling: A Crisis Is a Terrible Thing to Waste
Calibrate your response. Weigh costs, benefits, and possible unintended consequences. Analyze alternatives from a big-picture point of view. Don’t overreact or underreact, and be aware of the need to adjust as you go along. Beware of creating perverse incentives—“moral hazard”—by artificially lowering the cost of high-risk behavior.
A crisis is a terrible thing to waste. Use the pressure created by a crisis to make changes that inertia or political expediency would otherwise make too difficult.
Be aware that you might seed the next crisis. Sometimes the only way out of a crisis creates risks for the future; be prepared to reevaluate decisions once the heat of the crisis has passed.
Think resilience. Sometimes it will be impossible to avoid being trampled; being able to bounce back then becomes essential.
There’s no better time than after a crisis has happened to put in place systems that can help prevent the next one. But often even that isn’t enough.
Rhinos on the Horizon: Thinking Long-Term
Fresh eyes and fresh words can paint a picture of the future. Just as escaping the clutches of groupthink requires an open mind and fresh voices, recognizing the dangers and opportunities of the future requires a new mind-set.
Recognize the value of purpose in the long term. Companies around the world have become highly profitable by looking beyond the short term. In a rapidly changing metaspace economy increasingly shaped by millennials, the sense of purpose that drives long-term value is more important than ever.
Use “highly effective” strategy and long-term thinking to save money and free up resources to create opportunities instead of merely patching holes. Bring short and long term into balance. Prioritize importance, not just urgency.