1. Low Frequency/High Severity Incidents: Black Swan or Red Herring? Texas Emergency Management Conference 2012 Black Swan or Red Herring?

2. Low Frequency/High Severity Incidents: Black Swan or Red Herring? Texas Emergency Management Conference 2012 Low Frequency/High Severity Incidents: Black Swan or Red Herring? Texas Emergency Management Conference 2012 Randy Templeton (MA, CEM, MCP, MEP, MFF) Business Continuity and Emergency Management Coordinator Texas Dept. of Family and Protective Services Randy.templeton@dfps.state.tx.us

3. Low Frequency/High Severity Incidents: Black Swan or Red Herring? Texas Emergency Management Conference 2012 To have a discussion of perspectives and viewpoints for considering preparation and planning for LF/HS incidents Not really here to teach you anything—I’d rather stimulate your thinking!

4. Low Frequency/High Severity Incidents: Black Swan or Red Herring? Texas Emergency Management Conference 2012 “The first responsibility for any leader is to define reality” –John Maxwell

5. Low Frequency/High Severity Incidents: Black Swan or Red Herring? Texas Emergency Management Conference 2012 Q1 (+,+) Q4 (-,+) Q2 (+,-) Q3 (-,-) SEVERITYSEVERITY F R E Q U E N C Y Low High + + - Q1 incidents, though severe, are also frequent. The implications of frequency are that organizations are likely to have devoted substantial resources to address the problem; and, by reason of practice, personnel are typically skilled in making corrections quickly to restore function. Severity Frequency Q1 Impact

6. Low Frequency/High Severity Incidents: Black Swan or Red Herring? Texas Emergency Management Conference 2012 Q2 incidents are infrequent and severe--a dangerous combination. The lack of frequency often means that protocols, tools & equipment, procedures may not be in place, & personnel may not have developed KSAs. These reasons make Q2-type incidents the ideal models for training and exercise. Q1 (+,+) Q4 (-,+) Q2 (+,-) Q3 (-,-) SEVERITYSEVERITY F R E Q U E N C Y Low High + + - Severity Frequency Q2 Impact

7. Low Frequency/High Severity Incidents: Black Swan or Red Herring? Texas Emergency Management Conference 2012 Q3 incidents are neither severe nor frequent, and rise only to the level of "occasional nuisance." Few resources or attention should be devoted to Q3 problems. Q1 (+,+) Q4 (-,+) Q2 (+,-) Q3 (-,-) SEVERITYSEVERITY F R E Q U E N C Y Low High + + - Severity Frequency Q3 Impact

8. Low Frequency/High Severity Incidents: Black Swan or Red Herring? Texas Emergency Management Conference 2012 Q4 issues are not severe, though frequent. These often justify improvement/mitigation projects to decrease frequency of occurrence, thus converting them to Q3 occasional nuisances. Q1 (+,+) Q4 (-,+) Q2 (+,-) Q3 (-,-) SEVERITYSEVERITY F R E Q U E N C Y Low High + + - Severity Frequency Q4 Impact

9. Low Frequency/High Severity Incidents: Black Swan or Red Herring? Texas Emergency Management Conference 2012 These are “Wild Card” or “Black Swan” incidents. Whether local or global, these incidents are profoundly severe in some aspect of their nature that they change the society, the culture, or even the course of human life/history. Severity Frequency Impact Q5

10. Low Frequency/High Severity Incidents: Black Swan or Red Herring? Texas Emergency Management Conference 2012 Impact Severity Frequency Q6 These incidents are not severe or frequent, but they are impactful—typically cultural or attitudinal. (Example: Kennedy assassination, Woodstock, moon landing, etc.)

11. Low Frequency/High Severity Incidents: Black Swan or Red Herring? Texas Emergency Management Conference 2012 “Low probability, high impact [incidents] that, were they to occur, would severely impact the human condition” (John Peterson, “Out of the Blue”); “…An [incident] that is believed to be of low probability of materializing but if it does…will produce a harm so great and sudden as to seem discontinuous with the flow of events that preceded it” (Richard A. Posner, “Catastrophe ”;

12. Low Frequency/High Severity Incidents: Black Swan or Red Herring? Texas Emergency Management Conference 2012 When we say “Low probability…” we typically add the qualifying elliptical clauses, “…in my lifetime” and/or “…in my experience;” Catastrophes on a global scale are an established part of earth’s history; “Low probability” is more appropriately “Unknown probability” in many cases.

13. Low Frequency/High Severity Incidents: Black Swan or Red Herring? Texas Emergency Management Conference 2012 (Usually) Sudden onset May be foreseeable or not, warning or not Solutions (if any) are often complex Difficult to visualize; Hard to imagine response Punctuations in the system Can originate anywhere, but effect everywhere Can be driven by perceptions Can be either/both positive and negative Difficult to convince others

14. Low Frequency/High Severity Incidents: Black Swan or Red Herring? Texas Emergency Management Conference 2012 Can catalyze or have synergistic effects on other wildcards We are inventing the possibility of new wildcards Some wildcards are “too big to let happen” Challenge conventional wisdom, the “official future” Are game-changers in the biggest sense

15. Low Frequency/High Severity Incidents: Black Swan or Red Herring? Texas Emergency Management Conference 2012 If you don’t think about wildcards before they happen, all of the value of thinking about them is lost! Understanding how to think about problems is as important (or more!) than solving all problems. Accessing and understanding information beforehand is key! Extraordinary events require extraordinary approaches.

16. Low Frequency/High Severity Incidents: Black Swan or Red Herring? Texas Emergency Management Conference 2012 The Law of Apocalyptic Limitation: “No prediction of doomsday can be accurate except the last one.”

17. Low Frequency/High Severity Incidents: Black Swan or Red Herring? Texas Emergency Management Conference 2012 1.The nature of human cognition – Shared mental models of how the world works – Difficulty of discounting the value of events that will take place in the indeterminate future 2.Poor or missing incentives to prepare – Hedging against the future is costly – Long-term payoff vs. immediate comfort 3.Institutional barriers – Solutions require collective action where there is no basis for trust – No theory of sharing the load, pooling resources or decision-making authority

18. Low Frequency/High Severity Incidents: Black Swan or Red Herring? Texas Emergency Management Conference 2012 4.Imagination costs: mental exertion to think about what we have not experienced 5.Induction fallacy (“I’ve never seen a black swan, therefore they do not exist”) 6.Optimism bias/technological optimism 7.Short-sighted world view (20 th vs. 21 st century) 8.Short-term world view (“Not in my lifetime…” 9.Confusing “frequency” and “probability” 10.Chicken Little Syndrome (“doomsters”)

19. Low Frequency/High Severity Incidents: Black Swan or Red Herring? Texas Emergency Management Conference 2012 11. Full plates: tyranny of the urgent 12. Resource scarcity 13. Cultural Conditioning (e.g., “science fiction,” optimism backlash) 14. “One Risk at a time” fallacy (Either/Or thinking) 15. Dominant risk fallacy: “If risk A is > B, no attention should be paid to B.” 16. “Probability Neglect”—inability to respond rationally to very-low-probability risks. 17. Collective action difficulties

20. Low Frequency/High Severity Incidents: Black Swan or Red Herring? Texas Emergency Management Conference 2012 “A related distinction to bear in mind is between notional and motivational belief. It is possible to affirm a proposition on which one would never act, simply because the proposition was not felt deeply enough to impel action. Everyone knows that he or she will die someday, but a great many people do not act as if they know it.”

21. Low Frequency/High Severity Incidents: Black Swan or Red Herring? Texas Emergency Management Conference 2012 “Imaginative thinking must also be able to cope with issues that are possible but are also, by their nature, unthinkable. Perhaps their consequences would be horrible…[perhaps] not so bad anyway. Hope vacates judgment. The faster we get over denial, the sooner we can deal with the issue.”

22. Low Frequency/High Severity Incidents: Black Swan or Red Herring? Texas Emergency Management Conference 2012 “In theory, there is no difference between theory and practice. In practice there is.” --Yogi Berra Like Mt. Rushmore from the Canadian side: You know, there are some things that you just never think of...

23. Low Frequency/High Severity Incidents: Black Swan or Red Herring? Texas Emergency Management Conference 2012 The more critical your organization’s mission to life, health and well-being, the more time, resources and variety of your Q2 planning. In a crisis, should your agency do more, or less, or the same? Is there ever a time when it is appropriate/ acceptable to turn out the lights and go home? (BOKYAG Principle)

24. Low Frequency/High Severity Incidents: Black Swan or Red Herring? Texas Emergency Management Conference 2012 Purposeful/Intentional monitoring of the internal and external environments. Reaching out to individuals and sources from multiple disciplines who think differently and use a variety of filters to make sense of information (open source fusion). Used for detecting early signs of both opportunities and threats.

25. Low Frequency/High Severity Incidents: Black Swan or Red Herring? Texas Emergency Management Conference 2012 Three Questions: – What are the three most important wildcards for me, my family, community, society or organization? – Can they be anticipated? – Is there anything we can do to prepare? STEEP Model: social, technological, environmental, economic and political. “Scenario thinking” “Choice Structuring”

26. Low Frequency/High Severity Incidents: Black Swan or Red Herring? Texas Emergency Management Conference 2012 Deal with the paradox. EMs should routinely examine themselves: “What am I not seeing?” Practice changing before you have to. Allot/Guard some wildcard reflection and planning time. Ashby’s Law of Requisite Variety: “The capacity to accommodate environmental change depends on the variety available inside the organization.”

27. Low Frequency/High Severity Incidents: Black Swan or Red Herring? Texas Emergency Management Conference 2012 Wildcards are by their nature “unthinkable.” EMs should guard against blinders that affect others EMs should develop strategies for making a case for some form of wildcard planning “Eyes wide open” because we do not know from where the next threat will come.

28. Low Frequency/High Severity Incidents: Black Swan or Red Herring? Texas Emergency Management Conference 2012 Ability to survive in the long-term; bending without breaking; “ evolvable.” Capability to turn threats into opportunities prior to their becoming either. Defining dimensions are resourcefulness, robustness, and adaptiveness – Resourcefulness: “Work-arounds” for technology – Robustness: Redundancy and diversification – Adaptiveness: “Big Chief tablets and fat pencils” “Resilience Gap” Analysis: Fault Tree – “The world becoming more turbulent faster than we can build our resilience.” – “The essence of being resilient is to learn without experience.”

29. Low Frequency/High Severity Incidents: Black Swan or Red Herring? Texas Emergency Management Conference 2012 Imaginative thinking Resource-scarce innovation Robust design Adaptive fitness Sisu (collective toughness, inner strength—scrapiness!)

30. Low Frequency/High Severity Incidents: Black Swan or Red Herring? Texas Emergency Management Conference 2012 People Factors  Training/Specialty/Certification  Appropriate Authority/ Licensure  Number Sufficiency AND  Safety/Health/Nature of Threat  Mobility/Access Dependent  Communication Dependent  Client/Customer Centeredness (e.g., clients present vs. evacuated)  Administrative Support Dependant  Urgency/Danger to Clients  Task Volume/Calls for Service  Adversarial/Non-Adversarial/Regulatory  Public/Transparency of Government Tools Factors  Computer/Internet vs. Paper Record(s)  Telephone/Cell Phone  Vehicle Appropriate for the Circumstance  Shields/Barriers Available  Facilities/Office Space  Access to System Records (secondary)  Stocked Resources (diapers, formula, car seats, walking canes, etc.) Performance Factors (How Well/To What Degree)  State and Federal Statutory Mandate  Mission Essential Functions  Business Continuity Plans and Measures  Necessary to "Safeguard Life and Health"  Favorable Public Opinion AND Resource Requirements: What Do We Need to Function? Circumstances Factors AND People Factors  Training/Specialty/Certification  Appropriate Authority/Licensure  Number Sufficiency AND  Safety/Health/Nature of Threat  Mobility/Access Dependent  Communication Dependent  Client/Customer Centeredness (e.g., clients present vs. evacuated)  Administrative Support Dependant  Urgency/Danger to Clients  Task Volume/Calls for Service  Adversarial/Non-Adversarial/Regulatory  Public/Transparency of Government Tools Factors  Computer/Internet vs. Paper Record(s)  Telephone/Cell Phone  Vehicle Appropriate for the Circumstance  Shields/Barriers Available  Facilities/Office Space  Access to System Records (secondary)  Stocked Resources (diapers, formula, car seats, walking canes, etc.) Performance Factors (How Well/To What Degree)  State and Federal Statutory Mandate  Mission Essential Functions  Business Continuity Plans and Measures  Necessary to "Safeguard Life and Health"  Favorable Public Opinion AND Resource Requirements: What Do We Need to Function? Circumstances Factors AND

31. Low Frequency/High Severity Incidents: Black Swan or Red Herring? Texas Emergency Management Conference 2012 “The more varied and intense the challenges that the organization can cope with, the more robust it is. Robustness is the capacity to accommodate multiple, different futures.” Liisa Valikangas

32. Low Frequency/High Severity Incidents: Black Swan or Red Herring? Texas Emergency Management Conference 2012 That’s All Folks!!! References: Peterson, John L., Out of the Blue Posner, Richard A., Catastrophe: Risk and Response Taleb, N., The Black Swan: The Impact of the Highly Improbable