Why Green Swans Are Key To Any Post-COVID-19 Recovery
John Elkington
Why it’s time to move from Responsibility to Resilience and Regeneration.
Once again, people are talking about “Black Swans”, which typically take us exponentially to places we don’t want to go. But there is also growing interest in the potential for exponentially positive “Green Swans”. This short series of articles is based on extracts from my latest book, just published by Fast Company Press. Sub-titled “The Coming Boom in Regenerative Capitalism”, Green Swans (now available in hardback, ebook and Kindle formats) outlines key principles that must now guide our recovery from the COVID-19 discontinuity.
Welcome to the Exponential Twenties
The Green Swan is a symbol of radically better times to come-although the diagram suggests that we must go down before we have any chance of coming up. An old order is coming apart at the seams, a new one struggling to be born. And such times of disruptive change upend market and political pecking orders, creating political shock waves that can last for decades-even generations.
As a decade, meanwhile, the 2020s do not yet seem to have sticky branding like the “Noughties” or the “Teens,” but they will, and that branding will likely reflect a period of exponential change. The Exponential Twenties? To paraphrase Dickens, this will be the worst of times for those clinging to the old order, yet potentially the best of times for those embracing and driving the new. Buckle your safety belt.
This book, my twentieth, has had an unusually long genesis. It has morphed and mutated considerably along the way. You can expect an often personal account of a learning journey that has taken me around the world and, at times, deep into the future. It’s an investigation, an exploration, not a definitive, unified field theory. It is intended as the beginning of a conversation, not the end.
Like the fictional Forrest Gump, played by Tom Hanks in a film of the same name featuring a slow-witted man who was witness to-and sometimes unwittingly had a hand in-major cultural events, I have been involved in many initiatives that have shaped the change agenda. In citing some of those experiences, I aim not to out-Gump Gump but to demonstrate that my conclusions and recommendations are based on real-world interactions, not just desk research. That said, I have also been profoundly influenced by what I have read.
The impact of the highly improbable
Most obviously here, I have been inspired by the work of Lebanese-American author, risk analyst, and former options trader Nassim Nicholas Taleb. In his 2007 book, The Black Swan, Taleb provides a series of timely lessons about the “impact of the highly improbable,” as his subtitle put it. His timing was impeccable, as the global economy descended that same year into a financial meltdown few had seen coming.
Early on in his book, Taleb noted that he was sticking his neck out, in claiming that “against many of our habits of thought [. . .] our world is dominated by the extreme, the unknown, and the very improbable (improbable according to our current knowledge)-and all the while we spend our time engaged in small talk, focusing on the known, and the repeated.”
What follows riffs off Taleb’s metaphor of the Black Swan. He argues that Black Swans are unpredicted-and generally unpredictable. And on those grounds he has insisted that COVID-19 is not a Black Swan. It was predicted-but we decided to ignore those predictions. But it shares with true Black Swans the characteristic that afterwards reality will have shifted on its axis.
I will also riff off the language of the Chinese communist party. Just as the world’s most populous nation vaunts “socialism with Chinese characteristics,” we will explore aspects of capitalism (in post 2), democracy (post 3), and sustainability (post 4) with either Black or Green Swan characteristics-and sometimes a combination of both.
People also now talk of “Grey Swans,” which are predictable and may have been predicted, but which when ignored for too long erupt in ways that can rock the world on its heels. One of the most obvious is the trend of ageing in modern societies.
There are many benefits from our living longer lives, but it has been estimated that by 2020 the number of people over sixty-five in the world would outnumber, for the first time in history, children aged five and under. Again, there are many things to be said in favour of experience, but an ageing world will bring many systemic challenges that we have only just begun to think through.
Enter the Green Swan
This growing colour spectrum of Swans is where the riffing comes in. To the reasonably well-defined categories of Black and Grey Swans, I want to add two other emergent concepts: “Green Swans,” which are systemic solutions to global challenges, solutions that tap into positive exponentials, and “Ugly Ducklings,” defined as embryonic innovations and trajectories that can take us in various directions-good, bad, or ugly. Here’s the definition we use:
A Green Swan is a profound market shift, generally catalysed by some combination of Black or Grey Swan challenges and changing paradigms, values, mind-sets, politics, policies, technologies, business models, and other key factors. A Green Swan delivers exponential progress in the form of economic, social, and environmental wealth creation. At worst, it achieves this outcome in two dimensions while holding the third steady. There may be a period of adjustment where one or more dimensions underperform, but the aim is an integrated breakthrough in all three dimensions.
As Green Swans went to press last year, I “soft launched” the Green Swan agenda at a major business summit in Copenhagen, hosted by Dansk Industri (Confederation of Danish Industry)-attended by the country’s new prime minister, Mette Frederiksen; various committed royals from Denmark and Sweden; and 1,300 CEOs and business leaders.
As I took the stage, I noted that this was highly appropriate, given that one of Denmark’s most famous sons had been Hans Christian Andersen, author of The Ugly Duckling. But what truly blew me away that day was the way that the Danish government, the country’s leading industry federation, and the wider business community are now working together to drive a wildly ambitious green transformation.
A Green Swan economy in the making? Certainly, their timing looks exquisite. Successful businesses and economies invest into a downturn, aiming to emerge on the other side ahead of their competitors. And now we are in the mother of all downturns following the global COVID-19 outbreak, governments will be testing that theory to its limits.
Welcome to the U-Bend
My assumption in researching Green Swans has been that the world is headed into some sort of historic U-bend, well beyond a single, normal recession, where the established macroeconomic and political order goes down the tubes, and new ones surface.
I have been using variants of the diagram above for some years now, one key point being that as we head deeper towards the bottom of the U-bend, we enter a period of maximum confusion and uncertainty. Historically, too, this is often the point at which major wars occur.
In the process, established ideologies and mind-sets are coming under intense pressure-among them capitalism, democracy, and sustainability (a concept I helped launch decades back). I explore each of these in separate articles.
