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“Just think about what the world might look like if more people focused on solving obvious gray rhino challenges instead of obsessing about black swans…”

April 26, 2020

Michele M. Wucker is a renowned American author, commentator and policy analyst specialising in the world economy and crisis anticipation. She is the author of bestseller The Gray Rhino: How to Recognize and Act on the Obvious Dangers We Ignore. In a world where metaphors tend to become cliched, as in the case of The Blackswan, Michele highlights their significance and the cultural nuances. She explains the many dimensions of globalisation, importance of global cooperation, how the pandemic makes it even more pressing. She points out the clear connections between climate and the corona virus. Reminds clean tech creates more jobs than dirty fossil fuels as renewables become more competitive.

Michele warns us about the ‘domino gray rhinos’ – made acute by the corona virus – debt crises, social unrest, and extra vulnerability to natural disasters and extreme weather by the people who have been hardest struck by the pandemic.

Praveen Gupta: How and when did you first come up with the metaphor ‘Gray Rhino’?

Michele Wucker: Right after the Greek debt restructuring deal in March 2012, I was thinking about the difference between the Greek and Argentine debt crises. I’d written a white paper in Spring 2011 arguing that Greece needed to learn from Argentina’s experience in 2001, when Argentina and its creditors passed up an opportunity to preemptively write down the country’s debt. In both cases, a debt crisis was a clear and present danger, but Greece managed to avoid a catastrophic collapse in and default, while Argentina plunged ahead into a chaotic default and prolonged crisis.

I wanted to explore the difference, and the image of a rhino came into my head when I was talking to a friend about something dangerous that was about to charge at you. He joked that I should call it a “black rhino,” referring to the “black swan” metaphor for unforeseeable, unpredictable crises that became popular in 2008. But I knew there were “black rhinos” and “white rhinos” in real life, but that both of those species were actually gray. It reinforced the metaphor for how we ignore obvious things: in this case, the color of a two ton beast about to charge at you.

I wanted to explore the difference, and the image of a rhino came into my head when I was talking to a friend about something dangerous that was about to charge at you.

PG: Storytelling is universal, and metaphors can be a very effective component. Asia where 60% of the humanity resides, do you notice any unique penchant?

MW: I have been honored by how warmly Asian audiences have embraced the gray rhino metaphor, which I think has resonated because Asian cultures tend to be more attuned to long-term thinking and to complex systems thinking which are essential parts of gray rhino theory. I do not think that the typical Western focus on short-term incentives and outcomes and use of linear logic is up to the challenges our world faces now and into the future. While the gray rhino has been very influential in European risk management circles, and in certain financial and policy communities in the United States it took a pandemic for the concept to take off in a big way here. 

I have been honored by how warmly Asian audiences have embraced the gray rhino metaphor, which I think has resonated because Asian cultures tend to be more attuned to long-term thinking and to complex systems thinking which are essential parts of gray rhino theory.

PG: Do you believe metaphors have a lifecycle? They are sticky, tend to get cliched and frequently misused? The Black swan for instance!

MW: The Black Swan definitely was misused, as investors and regulators used it as a cop-out excuse in the 2008 crisis: “Oh, nobody could have seen it coming,” when in fact there were many unheeded warnings about problems with subprime loans. People forget what it ought to be used for: to broaden the idea of what might be possible and to use that widened imagination to develop more resilient systems. The elephant in the room – which just stands there and gets ignored – also has outlived its usefulness because it normalizes the idea that people don’t talk about big, inconvenient truths; it also suggests that these problems stand still and that it’s possible to ignore them indefinitely.

The gray rhino is big, impactful, dynamic, gives us a choice, and speaks to the moment we are living now. Unlike the elephant in the room, people DO talk about gray rhino risks, but they still too often fall short when it comes to dealing with them effectively. Just think about what the world might look like if more people focused on solving obvious gray rhino challenges instead of obsessing about black swans which are hard to prevent because you can’t even picture what they look like.

The Black Swan definitely was mis-usedPeople forget what it ought to be used for: to broaden the idea of what might be possible and to use that widened imagination to develop more resilient systems.

PG: “Walls will not stop viruses, neither they will mitigate Climate Change or protect from its impact”. Borrowing this quote, do you believe in the long-term globalization is unstoppable notwithstanding all the upcoming barriers?

MW: Globalization can have many meanings, so there are many answers to this question. The global spread of ideas and information is as hard to stop as a virus. Unfortunately, that is as true for lies as it is for truth. As for the definition of globalization that includes travel and trade, we are already seeing re-thinking of supply chains. For some countries that means bringing some production onshore, but for others it may mean finding additional global partners. It doesn’t help to have all of your production at home if your own country is crippled; you need to diversify. I do think it is a good thing for more goods to be made closer to home, in order to reduce the climate impact of long-distance transportation.

We will see significant short-term changes to travel because of efforts to contain the virus. As people become more comfortable with virtual meetings, many will deem more travel less necessary even when it is safe to increase travel again. But the big message about globalization that we should take from this involves the importance of global cooperation to solve problems: the pandemic makes clear that countries need to work together on so many issues that do not respect borders, much less walls.

But the big message about globalization that we should take from this involves the importance of global cooperation to solve problems: the pandemic makes clear that countries need to work together on so many issues that do not respect borders, much less walls.

PG: Yet, in the short-term the corona virus outbreak may exacerbate nationalism and stall climate change action?

MW: The pandemic absolutely is stoking nationalism, which not only creates all kinds of other dangers but gets in the way of dealing effectively with pandemics and other global threats. In terms of how the virus affects our response to climate change, things could go either way. Many people are noticing how nice it is to see blue skies. They also are starting to pay more attention to the importance of dealing with problems earlier on. And there are clear connections between climate and the coronavirus. For one thing, rising temperatures are releasing more pathogens from the permafrost. For another, the same greenhouse gas emissions that contribute to climate change also pollute the air and make people more vulnerable to respiratory viruses.

On the other hand, people who are not used to systems thinking want to solve one problem at a time, which pushes climate change to a back burner. And policy makers worry about the cost of new, cleaner technologies. But we also need attention to jobs and the economy – and clean tech creates more jobs than traditional, dirty fossil fuels, even as renewables are becoming much more competitive economically. 

Clean tech creates more jobs than traditional, dirty fossil fuels, even as renewables are becoming much more competitive economically. 

PG: What is the next big Gray Rhino likely to be?

MW: This is a question that is most helpful when people ask and answer it for themselves, so I answer it only with the greatest caution. But in general, I see a set of what we might call domino gray rhinos: things that the coronavirus is accelerating and making more acute: debt crises, social unrest, and extra vulnerability to natural disasters and extreme weather by the people who have been struck hardest by the pandemic. These are all related to the triad of gray rhinos – climate crisis, financial fragilities, and inequality – that are always on my mind and interact with each other. But I didn’t create the concept to be the world’s chief gray rhino spotter. I want it to be a tool for everyone to use to spot and wrangle the gray rhinos around them, because all of us need to change our mindsets to become more pro-active in dealing with the challenges whose existence we’d much rather deny. 

I want it to be a tool for everyone to use to spot and wrangle the gray rhinos around them, because all of us need to change our mindsets to become more pro-active in dealing with the challenges whose existence we’d much rather deny. 

PG: Is Asia’s hunger for limitless growth and consumerism a breeding ground for future Gray Rhinos?

MW: It’s not just Asia – the obsession with consumerism is everywhere, as is the tendency to ignore negative externalities, or the costs that a business creates that others end up paying. We need to re-think growth to include quality, not just quantity. Economic growth in one area may come with big costs to another part of the economy, and we’re not counting that well enough.

Economic growth in one area may come with big costs to another part of the economy, and we’re not counting that well enough.

PG: Why do humans tend to miss out on spotting a Gray Rhino? Are the blind-spots rooted in culture or are of cognitive nature?

MW: Humans miss spotting gray rhinos – and when we do spot them are all too likely to look away – for various reasons involving cognitive biases, culture, incentives, organizational and government structures. All these work together to shape our sense of human agency: the belief that we have the power to change the course of events. If we feel a problem is too big for any one of us to have an impact, we ignore it, as too many people have done when it comes to climate change. But when we feel we can make a difference – as so many (though still not enough) of us have learned with sheltering in place and wearing masks – people are more likely to step up to a gray rhino instead of ignoring it.

Humans miss spotting gray rhinos – and when we do spot them are all too likely to look away

PG: Appreciate these fantastic insights, Michele. Let us set our sights on all the potential #GrayRhinos…

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