Beware the Black Swans

Two decades ago, former Wall Street trader Nassim Nicholas Taleb wrote that investors, traders, and business leaders shouldn’t be fooled into thinking that just because they’d never experienced a seemingly impossible, massive disruptive change—a black swan event—that they never would.

However, in the 2020s, it seems that those rare, unpredictable, massively consequential black swan events are beginning to happen at least once a year. The on-again, off-again tariff policies that sent the US bond market into its most volatile period in decades—and company leaders scrambling to assess the threat to their businesses—are only the latest in a series of events, starting with the COVID-19 pandemic, that have forced leaders to steer their organizations not only through uncertainty, but also through jarring occurrences. And most are struggling. “Many are like deer staring at headlights,” says Maneesh Dube, a Korn Ferry senior client partner in the firm’s Executive Search business.

While the business world certainly has had its fair share of upheaval over the past few hundred years, most of it has happened gradually, over decades, such as the development of the internet. Most leaders who experienced the last business-centric black swan event, the 2008 financial crisis, are now gone. “The current generation of C-suite leaders had not seen black swan events or a recession or a tough business environment ever,” says Dube.

That is, until the COVID-19 lockdowns, followed by the biggest jump in inflation in 40 years, followed by a surge in employee empowerment not seen since the 1950s. If that weren’t enough, there was the biggest armed conflict in Europe in 80 years, the public introduction of large-language artificial-intelligence tools, and now, a global trade war.

Experts say leaders have to digest information and immediately take action, even as the constantly changing environment makes those choices far riskier. The experience can even alter a leader’s body chemistry and thinking, says s Miriam Nelson, a Korn Ferry senior client partner in the firm’s North America Assessment and Succession business. “Our cognitive functioning is legitimately compromised, and it can hurt our ability to focus on the long term,” she says. In many cases, leaders have decided the best strategy during black swan events is to halt expansions, spending, and hiring. This could very well be the right decision, experts say, but it shouldn’t be the default response.

Leaders may hope that black swan events will decrease in frequency, experts say, but they shouldn’t count on that happening. “That unpredictability has become our norm,” says Tamara Rodman, a senior client partner in Korn Ferry’s Culture, Change and Communications practice. Instead, leaders need to lead through the uncertainty and upheaval. “Flexibility and adaptability are critical in leaders, now more than ever,” observes Kim Van Der Zon, global vice chair and leader of Korn Ferry’s Board Succession and CEO practice. Indeed, more boards are demanding leadership candidates who have demonstrated both resilience and the ability to unite a team behind a common vision, Van Der Zon says.

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