The Ultimate Risk: Pandemics

Pandemics-the-Greatest-Risk (2)

The Ultimate Risk: Pandemics

16:19 15 April in Risk Analysis, Risk Management

When Black Swans meet Groupthink, and why we need to make better assumptions

We knew this was coming, so why were we so unprepared? After all, Covid-19 is just one of three coronaviruses to emerge in the last 20 years. The fact that a new respiratory illness has originated in China should be one of the least surprising risks to be realised in recent times, at least according to virologists. And viruses have long been popularised by scientists and filmmakers as the ultimate risk to world health — even more so than nuclear war.

The lack of preparedness and inability to deal with the outbreak has resulted in nothing short of a global economic and social catastrophe — almost certainly much worse than the 2007-08 crisis. The warnings were clear but globally we did very little to prepare. Why is that?

This is the story of how a “Black Swan” combined with groupthink, and ineffective risk management, got us into the mess where we are today — and how we might get out of it.


“We’re Not Ready”: Bill Gates, and lessons from history

In 2015 Bill Gates gave a prophetic warning about the world’s stunning lack of preparedness for the next major viral outbreak, in a TED Talk titled: “The Next outbreak? We’re Not Ready”. The crux of the talk, which was inspired by the West African Ebola outbreak of 2014, was that we “might not be so lucky” with the next one. Horrible diseases like Ebola have one positive in that most people are bed-bound before they become contagious, limiting their spread. Gates was ultimately fearful of an emerging disease that could easily be spread by someone still well enough to go to a market or get on a plane. 

And just a year before the emergence of Covid-19, Peter Piot, the former-president of the International AIDS Society, and a co-discoverer of the Ebola virus, gave this talk on how unprepared the world is for a global pandemic. 

Bill Gates was quick to stress that the relative failures in managing the Ebola epidemic weren’t a failure of an existing structure, but rather that “there was no existing structure at all”. He did, however, suggest that the world could prepare for the risks of a pandemic relatively easily and cost effectively — if only we got on with it!


Black Swan Theory: Does the coronavirus qualify? 

With all of this in mind, it is a matter of some debate over whether the Covid-19 pandemic qualifies as a Black Swan event or not.

After all, according to Nassim Nicholas Taleb, who authored the 2007 book The Black Swan (and popularised the term), a Black Swan event is something that has immense impact but emerges outside of the realm of regular expectations (i.e. has a very low probability of occuring) but in hindsight, always seemed inevitable.

Given that new viruses emerge all of the time, whether through natural discoveries or through “spillover” events (where a virus “jumps” from one species to another, like Covid-19, SARS, MERS, and H1N1 are all thought to have done) and given the last pandemic was only ten years ago, it seems hard to argue that novel viruses belong “outside of the realm of regular expectations”.

But on the other hand, Covid-19 is very unusual in that it is both alarmingly contagious and lethal to some. Also, it is a novel coronavirus – meaning it belongs to a different (and far less understood) family of viruses than the flu. In risk management terms, soon after its emergence, it became clear that it was a significant risk that was not planned for at all, and therefore rapidly became a massive issue. 

In this sense, it absolutely can be concluded that the Covid-19 pandemic qualifies as a Black Swan event.

(For more information on identifying and managing Black Swan events, read our article here.)


Did governments take any precautions prior to the pandemic?

Pandemics are difficult to tackle on a national level, because by definition pandemics are global events. Belatedly, a strong case is being made for a temporary one-world government to help tackle the crisis, coming from former British prime ministers and journalists

Has the world (including the UK government) done anything significant to prepare for a pandemic? The answer is “basically nothing at all”, at least according to Bill Gates, again in a more recent TED Talk about how to respond to the coronavirus outbreak

There is even evidence that the UK promoted the conditions that were essential to bringing about the Covid-19 outbreak, by promoting exports of the live animals that were sold at the Chinese wet markets, even lobbying Beijing to lower its meat safety standards. 

In the same TED Talk of this year, Gates said that the Western world did not act fast enough to avoid the shutdown. Indeed, not only were direct flights still coming from Wuhan to Britain five weeks after China sounded the alarm, but passengers on the last flight expressed their bewilderment over a lack of quarantine — or even screening — measures. 

So, why did the UK government do nothing to plan for a viral pandemic? And, when a new virus emerged and was clearly spreading, why did they drag their feet before taking action? And when the UK government finally did take action, why was their strategy so confused?

The short answer is: that the UK (and many other governments) fell into the groupthink trap — i.e. no one wanted to even think or talk about how bad it could really get, until it was too late.


How groupthink left us vulnerable to a coronavirus pandemic

‘Groupthink’ is a psychological phenomenon that — as the name suggests — plagues groups of people who come together to try to think about and solve a problem. Groupthink theory is a well documented psychological theory, and was first discussed in a scientific paper in 1972.

(For an extensive view on groupthink theory, check out our article.)

Groupthink has many different “symptoms”, which mostly stem from a desire for conformity within groups. A person under the influence of groupthink is more likely to keep his or her mouth shut or deliberately omit information if they think it is too troubling for the group to consider.

The consequence is that omitting and censoring information can create illusions of unanimity and invulnerability, which in turn help to reinforce groupthink psychology, extending it and reinforcing it to other potential dissident group members. If groupthink is allowed to have its way, the group will make defective, ill-informed, and just plain wrong assumptions based on the wrong data — and sometimes even when they have the right data.

But because groupthink is now so well understood, psychologists have also developed methods to stop it from happening. Oftentimes this involves bringing in external expert perspectives, or fragmenting the decision-making into smaller groups; and having leadership/senior managers conceal their own points of view before the group comes to a decision. Usually, this works well for most business, commercial and governmental programmes and projects.

But the Covid-19 pandemic is different because it has the qualities of a Black Swan event. One of the challenges of “normal” risk management is to identify all of the potential risks that a project or programme might reasonably face — and put steps in place to avoid those risks. There is a real danger in getting distracted by risks that seem far-fetched, so we tend to resist thinking about them. 

Quite reasonably, we concentrate on risks that manifest within our own experiences, e.g. risks that have a significant impact and a significant probability of occuring. After all, how many people would interrupt a grounded meeting deliberation to ask about the potential consequences of a hypothetical emergent, deadly and super-contagious virus on a project or operational process? They might also ask about the next asteroid impact, or gamma-ray burst from space. Eyebrows would raise all the same, as these are all high impact events that are very unlikely to happen.

Also, pandemics of the scale of Covid-19 kind are unprecedented and beyond most of our own experiences. The last comparable pandemic — the Spanish Flu — was over 100 years ago. Thus, it is this combination of groupthink, and of the unprecedented Black Swan quality of Covid-19, that has allowed the pandemic impact to spiral out of control.


Groupthink and the assumptions (excuses) we told ourselves 

Even as Covid-19 passed from a risk to an issue, groupthink continued to influence defective decision-making and, far from mitigating the crisis, actually made the pandemic worse. Here are three popular arguments that have exacerbated the situation we are in now:

It’s much ado about nothing”

Even in the midst of a novel virus outbreak, one spreading across the world, groupthink can still persist. The last pandemic occurred in 2009 when H1N1 (or “Swine Flu”) swept over the Earth, infecting between 11 – 21 per cent of the total world population. Yet there was a feeling that the whole crisis was overblown. 

The virus —  which was a part of the same family that caused the Spanish Flu pandemic of 1918 – 1919 (which may have killed up to 100 million people globally) — turned out to be far more benign than initially feared. The worst case scenario in the UK was expected to be 65,000 deaths, with Britain’s chief medical officer expecting a minimum of 3,100 fatalities. In the end, 457 people in the UK died of the virus.

It’s just like the flu”

It is likely that this “overblownness” in recent memory seriously undermined national responses to the new Covid-19 outbreak. Resulting in a “it’s just like the flu” camp of thought, which President Trump was still advocating as many nations — from Western Europe, to the Middle East and South America — were going into lockdown.

The “it’s just like the flu” argument has some superficial merit because thousands of people do die of seasonal flu. In England alone, this figure is on average 17,000 a year. In the United States, the number is close to 61,000 deaths. But aside from one or two flu-like symptoms, Covid-19 is almost wholly different from flu, with a mortality rate perhaps 34 times higher, with almost 20 per cent of all illnesses resulting in hospitalisation, mostly due to opportunistic secondary infections such as pneumonia.   

“It isn’t worth stalling the economy for”

The United States, which has so far only half-committed to an informal idea of lockdown, ended up reactively trying to mitigate the issue of rapid Covid-19 infection within its borders; rather than proactively locking down the whole country before the virus got out of control. That was actually the case with most Western European countries, too. But one reason for the delay in the United States might be down to the fact that the presidential elections are fast approaching, and that locking down is a surefire way to wreck the economy.

Still, as with all the above excuses, we can almost hear the groupthink psychology in action. Even in the face of a novel virus, some politicians do not want to entertain the fact that it could be worse than the flu, or that a few thousand cases in a population of millions justifies stalling the economy.


Reactive risk management — What is the government currently doing to deal with the pandemic?

The government did not do enough to reduce the risk of Covid-19 from reaching the United Kingdom and once it was here, the measures to bring it swiftly under control were slow to be implemented and confused. After crucial delays the government made some positive progress:

  • Closely watching how Italy’s healthcare system has faltered, and preparing for an Italy type scenario 
  • Reaching a deal with the private healthcare sector for use of their hospital beds
  • Reaching a deal with private hospital staff for their help in combating the virus
  • Recalling retired doctors and nurses to help existing staff
  • Creating temporary hospitals such as NHS Nightingale and others to ease the strain on existing hospitals
  • Putting in place some dramatic economic measures to try and nurse the economy through the crisis
  • Ensuring that decision-making is driven by scientific research and taking advice from leading scientists (although this was done belatedly following the “we’ve had enough of experts” argument that plagued Brexit) 


But the UK has also made some fundamental mistakes, such as:

  • Not having a sense of urgency in closing the borders earlier (as Russia did) or imposing early travel restrictions and quarantine measures (like Taiwan and South Korea)
  • Delaying the national lockdown until after a suspected 50,000 cases were already in Britain
  • Announcing the closure of all pubs, bars, and restaurants on a future date, and on a Friday night at that — prompting a final surge in revelling 
  • Championing a “herd immunity” plan without locking down vulnerable groups, in defiance of the World Health Organisation’s suggestions, and then abandoning it after some models suggested that 500,000 people could die 
  • Not ramping up facilities for testing (and testing materials) so that it was not possible to even test NHS staff and maintain crucial healthcare staffing levels through the peak of the crisis
  • Not ensuring that sufficient Personal Protection Equipment (PPE) had been procured for front-line NHS staff to cope with the projected peaks
  • Not ensuring that the assumptions being made by scientific experts from different groups (e.g. Imperial College and Oxford) were challenged sufficiently
  • Not facilitating a mass testing strategy, as the WHO recommended, which has been so successful in South Korea and Taiwan 
  • Not having a structure in place to fast-track such a mass testing strategy, which has resulted in not having enough “chemicals” for tests and a shortfall of testing ambitions 
  • Not fully assessing the “cost benefits” of alternative models which do not involve an economic lockdown, such as is currently being tried in Sweden

Covid-19 "flatten the curve" graph

An example of the campaign to “flatten the curve” of Covid-19. Source: Medscape


How the government can improve management of the Covid-19 crisis

Given the dubiousness of the herd immunity approach — along with the swift backtrack — it seems that the government (like many governments) is fumbling about in the dark, rather than implementing proper objective-based planning supported by efficient and effective risk and issue management frameworks.

The lockdown can’t continue for ever and discussions of an “exit strategy” are getting louder. This will not be simple as we will be working with little data with which to make decisions. But in the UK we do have the benefit of looking at China, Italy, Spain and France, all of whom are further ahead in the pandemic cycle. So we can develop several scenarios and test them scientifically by capturing and thoroughly cross-communicating the inherent assumptions in each scenario to understand the risks within.

By using a formalised methodology such as the ABCD risk management approach, strategic assumptions can be captured and tested against the best expert data available, and thereby assure that we don’t fall into the groupthink trap again – and therefore choose the best scenario for exiting the lockdown.

Beyond that we need to “chunk-down” recovery plans into projects in their own right, with clear objectives and timeframes that can be decomposed into the strategic assumptions being made. These assumptions can then be tested for risks and opportunities.

ABCD — assumption based communications — is essentially a communication mechanism that will be required from government levels down to recovering major public sector programmes and prioritised private sector projects that support the crisis recovery.

In addition, mathematical modeling that truly reflects “best case”, probable, “worst case” and “disaster” scenarios will be required — such as the Strategic Target Analysis (STA) method.


Strategic Target Analysis includes both Contingency and Disaster scenarios


STA is a similar method from the current industry standard QSRA (Quantitative Schedule Risk Analysis) but there are fundamental differences that lead to very different answers that have time and time again, proved to be accurate.

(You can read more about Strategic Target Analysis here). 

In the meantime, the government has already said it will have done “well” if fewer than 20,000 people die of Covid-19. Which will make the pandemic in Britain only a little more severe than a typical winter flu season in England. 

So it looks like the “best case scenario” has already been mapped out. But the time period is unclear. Is this 20,000 casualty rate a best case scenario for the first wave of Covid-19, or for the entire pandemic? Because in the absence of a vaccine, presumably the virus will make a resurgence in the winter time, like regular flu. The government will have to consider this, and be clear with its assumptions, so that the necessary structures are in place to mitigate future surges of infections.

The government also has the mammoth task of mitigating economic damage, and in particular, making sure that this doesn’t harm the efficiency of the health services in combating Covid-19 in future. A “Disaster” scenario (in STA terms) would be driven by a huge wave of infections, re-infections, irreversible economic damage, and a paralyzed NHS. As always, communication will be the key. It is a difficult time, but with the proper levels of communication, cooperation and control, a best case scenario is possible.


Other issues that the coronavirus has exposed

Viruses are good at revealing weaknesses and inequalities, such as the Spanish Flu did when it ripped through lower-income countries and the working classes of higher-income ones. The Covid-19 pandemic has exposed huge flaws in the supply chains of many counties. For example, much of Europe and North America depends on China for antibiotics production, along with generic drugs for millions of citizens with underlying health conditions. The Western world is also deeply dependent on China for respirators, surgical masks, and protective equipment

This is important because, with China locked down, those supply lines were jeapordised. And even when they re-opened, supply could not meet demand, and the West simply did not have the structures in place to generate its own resources, and so a war-like response was necessary to ramp up production. Many supply chain assumptions were made that now need to be re-examined to mitigate future risks.


Rationalising for the future: How nations can prepare for the next big pandemic

National governments and global organisations have been rudely awakened by the Covid-19 pandemic. The result has left many thousands hospitalised, economies ruined, and healthcare services overwhelmed. For Westerners, it is a reminder that deadly pandemics are not something confined to the history books.

But many Asian countries realised this in 2003 with the SARS outbreak. Still traumatised by the SARS epidemics, countries such as Taiwan, South Korea, and Singapore quickly introduced early travel restrictions, strict quarantine rules, along with aggressive testing and screening of contacts. They also have proactive risk management structures in place, and a clear public health dialogue with their citizens, creating a “sense of urgency”.

The later MERS outbreak in South Korea instilled an urgency for mass testing, and as a result a new regulatory system was introduced for future emergency situations, allowing for fast-track approvals of newly-developed testing kits. South Korea is now one of the few countries to have effectively contained and controlled the Covid-19 outbreak. 

So on a unilateral level, Western nations can learn a lot from the proactive structures already in place in many Eastern countries, and make more appropriate and robust assumptions going forward.


Conclusion: How the world can prepare for the next big pandemic

The Chinese authorities pledged to clamp down on illegal wildlife trade and unhygienic wet markets after the SARS outbreak. Obviously, this did not work. Virus outbreaks often disappear as quickly as they appear, and are soon forgotten. Even the Spanish Flu pandemic, which may have killed 100 million people, is also nicknamed “the Forgotten Pandemic”. It was lost in the mists of time. For instance, how many people knew, before Covid-19, that more people were killed by Spanish Flu than were killed in the First World War that preceded it?

The Chinese authorities have once again pledged to clampdown on those same wet markets in response to Covid-19. It is possible things will change given the severity of the Covid-19 impact over SARS. But given how quickly pandemics fade from memory, this needs to be actioned and followed-through quickly.

Globally, the biggest thing we can collectively do is change our attitude. The modus operandi is that we do nothing except hope that the next pandemic never happens. Or if it does, that it will be something so minor or localised that we can look the other way. This is clearly an unacceptable attitude. Future pandemics are not so much “risks” as they are “future issues” (i.e they are inevitable). It is not a question of if another pandemic will happen, but when. 

Bill Gates warned in 2015 that “we might not be so lucky next time”. But in many ways, we can still count ourselves lucky. Covid-19 has a fatality rate of approximately 2.2 per cent. But its cousins SARS and MERS had fatality rates of 10 and 34 per cent, respectively. It is not alarming to warn that, next time, things could be a lot worse.

Therefore, effective risk management — on a global scale — is needed, urgently, to prepare for and mitigate the next pandemic. The strategic assumptions on which the world has operated on for many years have changed. With the enormous impact of Covid-19, perhaps the world is now ready to work together to avoid groupthink, challenge fundamental assumptions and manage the inevitable risks of the next inevitable “Black Swan” pandemic.

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