Are You Prepared for the Impact of a “Black Swan” Event?

What do these events have in common? 

• Fukushima nuclear disaster
• Dot com crash
• Dissolution of the Soviet Union
• September 11^th attacks
• The rise of the Internet
• BREXIT
• Outcome of the 2016 U.S. Presidential election

They are all considered to be Black Swan events.  A Black Swan is an event or occurrence that deviates beyond what is normally expected of a situation and is extremely difficult to predict. Black Swan events are typically random and are unexpected.  If you think that understanding and reacting to the impacts of our recent Black Swan event is not part of our jobs, think again!

This past Tuesday, we had our quarterly meeting of the reenergized Procurement / Supply Executive Round Table – PERT (formerly known as Next Practices Xchange) where we discussed “Black Swan” Risk Management – Mitigating sudden changes in Trade, Immigration & Foreign Policy.  Prior to this meeting we conducted a benchmarking study which made it quite clear that only a handful of companies are planning for the changes that are already happening.  We spent the entire day exploring this subject with senior Procurement executives and the discussion was fascinating.  PERT attendees come from a variety of industries – here are the companies represented at our recent PERT meetings:

Based on the energy and level of discussion, it was clearly a “HOT” topic. The session was keynoted by Lawrence Friedman, Partner with Barnes, Richardson & Colburn and President of the Customs Bar Association.  Larry literally “hit it out of the ballpark”.  The benchmarking survey we conduct prior to every session revealed a large gap between where most organizations are and where they need to be.   Our benchmarking study asked the respondents to indicate the level of application of many of best practices associated with our topic.

Here are some of the conclusions that were drawn from our day-long session:

• Procurement and Supply Chain have not been able to focus a lot of attention to geo-political risks
• The current changes in the geo-political landscape make it a necessity to change that dramatically
• Our stakeholders are in tremendous need for someone to pay attention to these risks
• This presents a unique opportunity for our profession to fill the vacuum in our corporations
• We need to develop a different set of competencies (Strategic) in addition to tactical process competencies
• This applies to those of us involved in procuring hard goods or services as both supply chains are being impacted significantly
• Offshoring decisions of the past need to be re-examined and different decisions models have to be developed
• Strategic Workforce Planning is a must to ensure availability of critical talent – whether it’s being hired or being outsourced
• Contracting processes need to dramatically change

Unfortunately, the “How to get There” discussion is only available to the PERT attendees 🙂 !  While we did not solve world hunger in our one-day workshop, we certainly moved the needle in our thinking around how to make progress.  Our attendees walked out with a better understanding of the issues and potential solutions.  In addition, the networking is invaluable in that they had an opportunity to meet and work with their peers in a “NO SALES” environment.  For those of you that did not attend, I would encourage you to stay tuned and NOT miss the opportunity to be an integral part of this group.  It is the only one of its kind!  If you would still like to participate in this benchmarking study and receive the full report please use the following link:

   SURVEY link 

The purpose of PERT is to “Build a Community of Practice” with Procurement Executives.   This was our fourth meeting and the response to our topics (chosen by the members) has been overwhelming.   If you are a Procurement or Supply Chain Executive (Director level or above) and are in interested in joining PERT, please let us know.