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The Quake That Shakes Us All
By Eric Best

How prepared are people for the bigger reverberations of major events, and how to deal with them intelligently, of which the first step might be anticipation and planning?

As a longtime scenario practitioner, I have an aversion to certainties of all kinds, partly because it is always the unexpected that changes the way we think and subsequently must behave. Humans must live and work in a constant tension between confidence about what they think they know and flexibility in the face of incomplete information, and sheer ignorance. But how to identify what you do not know well enough and should consider?

Enter Japan's earthquake and unfolding disaster. Were quakes of this kind uncertain? No, they were inevitable (and still are). Were those plants "safe?" No, they never were, located on the geological "Ring of Fire" that promises serious quakes from here to eternity.

The quake's timing, however, was uncertain, and also the extremity of its effects. We must now all reconsider whether:

  • A nuclear cloud will get into the atmosphere and increase cancer risks everywhere
  • Anti-nuclear movements will extend globally as the world comprehends that it potentially shares in every other country's nuclear risks
  • Nuclear plants should continue to answer the world's energy appetite, given what we now know, and know that we know
  • Recalculation of insurance liabilities will render nuclear energy just too costly
  • Makers of potassium iodide pills are suddenly a valuable stock investment (Or are you too late?)
I mean this last only partly facetiously. It says something about positive pricing effects in negative macro conditions.

Vital lessons may be taken from Japan's experience - which, pray, does not continue to multiple meltdowns and swathes of dead areas of Japan from nuclear contamination. One lesson might be in the approach that executives and managers take to major "uncertainties" that are likely to unfold at some level and at some point reasonably soon. Don't we know what some of them are?

As much as a U.S. Treasury-market collapse, Middle East (Libya, Saudi-Bahrain) disruptions, oil prices above $120/bbl, rapid global inflation, European financial meltdown and China disruptions are known to be real and proximate possibilities, many corporate and public policy leaders have not really taken the time to think these through.

Scenario thinking continues to be an invaluable tool in the risk-manager's toolbox because it allows for the unthinkable to be more easily thought and for the unspeakable to be spoken in ways that may be heard and acted upon in time. Examples are many of risks that were contemplated with scenarios and where subsequent actions saved millions or produced strategic options that were acted on profitably. Lives might well be saved as well.

Maybe Japan's quake has shaken the rest of the world enough to reconsider how prepared we are, and are not, on some of these fronts. "What if?" remains a powerful question for managing future risk, but only if you really ask it - the right way with the right people around you - and think it through.

Then you must act.

© 2011 Eric Best

Author Bio
Eric Best
is an author, speaker, and strategy consultant to individuals and corporations. Educated at Hamilton College, Harvard and Stanford Universities, his background as a journalist (Lowell Sun, USA Today, San Francisco Examiner), futurist (Global Business Network, Morgan Stanley), and solo ocean sailor (SF-Hawaii and back, '89 and '93) inform his insights. The father of three, he lives and maintains offices in Brooklyn, NY, where he currently consults for a global financial firm and is working on two new books.

For more information please visit http://ericbestonline.com and follow the author on Facebook and Twitter