Michele Wucker: Strategist, Popular TED Speaker, and Best-Selling Author

Coaches on Zoom Drinking Coffee
Michele Wucker

(interview blurb)

Michele: Risk is not this objective thing. It’s like looking into a room full of funhouse mirrors and every time you change your perspective, the amount of risk changes as well.

(intro)

Alex: Hi, I’m Alex Pascal, CEO of Coaching.com and this is Coaches on Zoom Drinking Coffee. My guest today is a strategist, TED speaker, and bestselling author. She coined the term “gray rhino” as a call to take a fresh look at how we respond to obvious, probable, and impactful risks. She founded the advisory firm Gray Rhino & Company and is the author of four books, including the global bestseller, The Gray Rhino. Please welcome Michele Wucker.

(Interview)

Alex: Hi, Michele. 

Michele: Hey, how are you? 

Alex: Great. It’s great to have you. Thank you for joining me today.

Michele: My pleasure.

Alex: Let’s start where we always start Coaches on Zoom Drinking Coffee. We don’t always drink coffee but we always start with this question. What are we drinking today?

Michele: So I am drinking a tea called Pu Erh tea. It’s from the Yunnan region of China. It refers to a special drying and fermentation process that just kind of mellows it out and I’m never ever going to be able to drink black tea again after drinking this and it became an obsession after I started traveling to China regularly so it’s my new favorite tea and I’ve become a bit of an evangelist about it.

Alex: I actually have some already here. I have like 100 packets, little packets, because we had someone else that came to the podcast and wanted to drink the same tea and it was delicious but I kind of forgot I had it and, today, I’m making another one. So, thank you for reminding me, Michele. It’s a really delicious tea.

Michele: It is and it’s very versatile. There’s green versions, white versions, black versions, and it’s just — it’s a little hard to find but when you do, they’re worth it.

Alex: I found an organic one on Amazon, I think it’s black tea, certainly smells like black tea, and it’s delicious. 

Michele: I get them from a company called Adagio that has a bunch of different flavors and I’ve just signed up for a subscription. I drink it so much and run out of it so quickly.

Alex: I love that. Soon, in our conversation, we’ll get to that point where you tell us what you were doing traveling to China. You have a very interesting background. I know that you started as a journalist and you’re usually referred to as many different things by many different people, an economist, even psychologist, so you have quite an extensive and fascinating background. So, why don’t you take me back to the beginning? How did you start your journey and ended up in this probably unexpected place many decades later?

Michele: Very unexpected and an unexpected circle back to where I started. I was the nerdy little kid who read too much, who was super shy and the sort of youngest and the smallest one in the class, I always the baby when they played family and so I read a lot, obviously. I decided I wanted to be a writer, and when I was in high school in Waco, Texas, I spent the summer as a candy striper, just like a volunteer at the local Veterans Administration Hospital, and was the assistant to a psychologist and just became fascinated in how the human mind works from that. And so I wanted to do that. I also learned that there’s this hierarchy that psychiatrists with MD kick around, the psychologists with the PhD who kick around, the social workers with MSW and, of course, when you’re a smart kid, you want to be at the top of the heap, so I was like, “Okay, I wanna be a psychiatrist,” not thinking about the fact that I pass out when I see blood and I just figured doctors, they get over it, I’ll get over it. But I didn’t and I hated psychology classes. They all wanted to do these experiments and things, so I gave up on that, started traveling. I spent the summer between high school and college in Belgium where I have family and in Germany on a month-long exchange program and, between my junior and senior years of college, I went to the Dominican Republic and to Haiti, which officially I wasn’t supposed to do because they just had a coup but I went anyway. And, eventually, that became my first book about why two countries on one island, speaking different languages, different racial mixes, different historical, but lots of similarities as well, what they had in common, what they didn’t, and it was a mix of economics and history and anthropology and sociology and even literature, all of that together, and a little bit of journalism. So I started with that book. The first few years of my career I was a journalist. I was a financial journalist because living in a poor country, I became very, very interested in economic development and finance and wrote about emerging markets bonds in the early 1990s and big sovereign debt restructurings. I stopped thinking that $100 million was a lot of money. And, from there, I actually ended up getting very sick because I hadn’t learned about taking time off to rest and be good to yourself and sleep enough so I ended up taking a leave from work because I had just worked myself to being exhausted, and that’s when I decided I had to go back to my writing and so that’s how the first book happened. And I went back and forth for a while between this finance world, I became a Latin America bureau chief, I kept getting kicked upstairs, I ended up getting sick again and so I just said, all right, I’m not doing what I’m supposed to do, so I left. I moved into a think tank, the World Policy Institute, that was based at the New School in Greenwich Village in New York City, and started working on another book on immigration and doing some freelancing and speaking and consulting. And, eventually, was asked to take that think tank and spin it off into an independent organization, which I did right before Lehman Brothers crashed, so that was interesting in the sense of the old Chinese curse. So, I learned a lot about running an organization. I mean, I’d had some management training before and had run the bureau but —

Alex: Before you keep going, tell us about that Chinese curse.

Michele: Oh, may you live in interesting times.

Alex: Oh, I didn’t know that came from a Chinese curse. That’s very interesting. 

Michele: So to speak.

Alex: Pun intended.

Michele: Yeah, so it’s, I learned how to do all the incorporation of an organization, building a board, building all of the infrastructure that you need, I had a good right hand who helped with that, and did it for seven years then realized that — and near the end of the seven years, I realized I needed to go back to writing. And that was about the time of the Greek debt crisis and I’d written a paper based on a comparison between my time writing about the Argentinian debt crisis when I’d written about a proposal to do a proactive restructuring and debt forgiveness and they said, “No, no, no, no,” and so instead of losing 30 percent of their money, they lost 70 percent of their money. So when I saw something similar happening in Greece, I wrote a paper that was one of the early public calls for restructuring and it got a lot of attention, I was a guest host on CNBC’s Worldwide Exchange and it helped to spark a public conversation that led to Greece doing an early restructuring, that helped prevent chaos and probably a collapse of the euro. And so that’s what really got me started on the work that I’m doing now, which is about what happens when people see a big scary thing coming at them, it’s like huge, it’s obvious, people are talking about it, it’s coming right at you, it’s got the horn, it’s scary, it’s dangerous, like a rhino, and it gives you a choice. And so my work is about what makes the difference between the people who see this big gray rhino coming out them and deal with it and the ones who let themselves get trampled. And so I’m now doing my own thing. I’m writing about, speaking about, thinking about, consulting about gray rhinos and about risk in general, about what all of the things are about a situation but also about each one of us that we bring to a gray rhino situation. So that’s the nutshell.

Alex: So, tell me about this famous gray rhino.

Michele: When I was thinking about the differences between Greece and Argentina, I was looking for a big question that I really wanted to tackle and I realized that the world wasn’t as interested in geeky sovereign debt credit questions like I was, and I also realized that the question I was asking was much bigger than just sovereign debt or even bigger than the policy issues that I was working on, climate change and financial crisis, that this question about what’s the difference between the people who respond to something scary and dangerous and obvious and the ones who don’t was really relevant to business strategy, to personal growth, to leadership. As my readers told me, often even relevant to their personal lives. So when I was thinking about how to write about this question in a non-geeky way that people would actually read, I was talking with a friend and sharing this dilemma and that’s when the rhino came into my head. I said to him, “It’s big, it’s scary,” the horn popped into my field of vision and it’s coming at me, and so he made a joke about a concept that was popular at the time, the black swan, which is something that is unforeseeable, that’s unimaginable, that you can’t depict because it just is so far outside of your frame of reference and it was intended as a way to get people to realize that there’s a lot more uncertainty in our world than we think and to be resilient and agile so you can deal with that and instead policymakers used it as a way to — it’s a cop-out, basically. The, “Oh, financial crisis, nobody saw it coming. I lost all your money. Oops, nobody saw it coming.” You hear it all the time as a cop-out. Anyway, so my friend said, “Oh, you could call it a black rhino,” kind of riffing off of the black swan and I didn’t want to be derivative of a concept that I felt was being badly abused, not as the author intended, but I thought, wait a minute, I went to the zoo when I was a little girl and I remember seeing rhinos and I think it was a black rhino, or was it a white rhino? Let me go to Wikipedia because I don’t really remember. And that’s when it hit me that black rhinos, even though we call them that, are not black, and white rhinos, even though we call them that, are not white. They’re all gray, which should be really, really obvious, there’s this big, gray, 2-ton thing right in front of you, but we twist ourselves into pretzels to pretend that it’s something that it’s not and so that part of the metaphor was about how much more vulnerable humans are than we want to think to the things that are right in front of us that we are talking about that some people are doing something about. And so that’s the gray rhino metaphor and it became a book that came out in 2016, has sold around 400,000 copies around the world and it became a concept, sort of an analytical framework for dealing with gray rhino events, whether it’s a big policy issue like financial risk in China or climate change or business strategy or even, as I mentioned, personal issues. So it’s a very flexible and quite fun metaphor that also has prompted my friends to send me pictures of rhinos when they go to museums and places all over the world or on safari and they send me these cute videos of baby rhinos, which are so adorable. They sent me one today, wasn’t a baby rhino but it was a rhino that wakes up a sleeping dog so the dog wakes up and sees the big rhino and goes, “Aaagh!” and runs away. So I highly recommend rhino videos.

Alex: Rhino videos, yeah. Maybe not as popular as cat videos but maybe we’ll get there. So, one of the areas of expertise you have is around risk and our audience here on Coaches on Zoom Drinking Coffee are coaches. Risk, I think, is a predominant theme in coaching that perhaps doesn’t really get talked about too often. We don’t put it really in plain sight. It is one of those things that sometimes it’s assumed or it’s like on a secondary plane, but, oftentimes, when you’re working with clients, the way they look at risk has a lot of ramifications in the way they’re managing their careers, the way they manage certain situations, and I think one thing that I’ve always found interesting is that if you take no risks, that might be the biggest risk of all and it’s hard to see that. I think being risk averse, in some context, is seen as a really good thing, and in some other contexts, it’s actually a terrible thing and when you look at just like the unfolding of life in general in the universe, it seems like taking a little bit of a leap and a risk is a necessary aspect for survival. It’s almost like entropy, in a way, functioning, let’s say, in this case, like a human form. So, why is managing and dealing with risk so difficult? 

Michele: Wow. 

Alex: Just an easy question to get you started. We’re warming up.

Michele: Yeah, well, so this is, of course, what I’ve been working on in the aftermath of the gray rhino. People would ask me about applying this to their personal lives and I didn’t know what to do with it because I’m not a self-help writer or — I mean, I do business and strategy and finance and geeky things and I was talking to a friend of mine, a private equity CEO, brilliant visionary, visionary person who had been a sounding board for the gray rhino and I said, “Jeff, what do I do with this?” and he said, “Well, there’s actually a bigger connection than you think.” He says, “Our investment committee met last week and we wanted to figure out why some of our investments didn’t work out as we’d hoped and we’ve done the due diligence and all the red flags were there but we hadn’t paid attention to them because they weren’t the traditional ones, problems with the product, problems with the business model, big economic recession, anything like that.” He said, “It was bad personal risk decisions by the CEOs.” It was the cheating, the drunk driving, the domestic violence, the speeding, those sorts of things. And so that’s when I started looking, going back to the psychological interests in my life and looking at the differences among different CEOs in how they dealt with risk and, interestingly, around that time, we’re starting to see a lot more attention by boards to CEOs taking bad and often very dramatic risk decisions because they would do things that were eccentric, like throwing tantrums over not having the right kind of tequila or bragging about sleeping with a Russian spy who was involved in a big political scandal, all sorts of things. And there was a study about the Ashley Madison website information breach, about the website for people who were cheating on their spouses —

Alex: I remember that. 

Michele: Yeah, it was amazing, and some academics brilliantly took that data and they cross referenced it with securities violations and other law breaking things, huge correlation. And so it’s an underlooked aspect of business. The media glorifies big risk takers so they get attention for it, they get affirmation, they get reinforcement, but then, eventually, it always ends badly. And —

Alex: Correlation is not causation, except sometimes it is.

Michele: Exactly, exactly, it absolutely is. And then you look at corporate culture. There’s some of these big legacy corporations that have been there for decades and decades and they want to, quote-unquote, “innovate,” but their culture is just not set up for taking risks and doing new things. And then you have all these startups where the MO is —

Alex: Move fast and break things.

Michele: Exactly, which is taking risk without thinking about them at all. So, I started thinking about all these questions about individual personalities, about is someone who fits a certain personality type likely to take more of one risk or another? How do you change your organization? How do our cultural values affect the risks that we take? And then I read somewhere, unfortunately, not until after I had written You Are What You Risk, which is the sequel to the Gray Rhino, I didn’t realize ’til after it came out but there’s some statistic that says that each one of us takes, give or take, 35,000 choices, decisions every day and every one of those choices, there’s a risk, and every risk that we take is a choice. And risk, we’d like to think that it’s something that we can assign a number to or measure or estimate because the whole economy is based on that, insurance and actuarial tables and all sorts of things are based on quantifying and roughly estimating risk that we think we can estimate more precisely than we think but it’s actually an illusion because the same risk, for me, walking down an alley at two in the morning is different for the same risk from you and different from the seven-foot-tall, 300-pound guy, it’s a quantifiably different situation. So, risk is not this objective thing. It’s like looking into a room full of funhouse mirrors and every time you change your perspective, the amount of risk changes as well.

Alex: Wow. Can you imagine if we were walking through life kind of computing all these variables, it would kind of probably drive us a little crazy, but it’s the reality of what we’re doing here, isn’t it?

Michele: It absolutely is. And so, of course, you’re writing about risk, I had to talk to some big risk takers and there are a couple of extreme athletes in my book and what’s interesting is that the popular ideas, “Oh, they’re daredevils. They take all these big risks,” but what they do is they actually prepare so much that they reduce the risk as much as possible. They train, they study. I did a podcast last year with Alex Honnold, the Climbing Gold podcast, about risk and climbing and it was just a great conversation because here’s somebody who lives this all the time, but these supposed daredevils, these suppose big risk takers actually are doing everything they can to minimize the risks so if you or I went out and decide to climb a mountain today, well, that would be a huge risk, but for them, it’s much smaller. And so I really want to challenge this idea that risk is objective, something that you can really measure, and so once we start paying attention to the risks around us, to how we feel, to our own personalities and experiences and the habits and processes that we create, we can actually change how we take risks, we can take smarter risks, we can understand our colleagues better, we can understand our stakeholders, our investors, our clients, our adversaries across the negotiating table, so by really understanding deeply, starting with yourself, your attitude towards risk and what you bring to it, both things you can’t change and things that you can, and then applying that process to the people around you, it’s such a powerful interpersonal tool that I hope that a lot of coaches start really thinking about this and talking about it actively because it’s the kind of thing where — when I interviewed people for the book, they came away from the interview saying, “Wow, I learned so much from that interview,” and I thought, wait a minute, I was the one who’s supposed to be learning from them, but just starting to talk about these things opens up windows and doors that people didn’t even know were closed.

Alex: You know, as you’re talking about risk and those people that prepare for different situations, it really kind of makes me think about how can we reevaluate a lot of the things we do in our lives from like the perspective of diminishing risk and understanding it as well, maybe that we’re doing certain things and to make it relevant to coaching, when we’re working with clients, there may be a risk of potentially getting fired if you don’t achieve X or if you do Y, but really kind of breaking those down and understanding kind of maybe the risk of the inverse, maybe aiming too high for a promotion and not paying attention to some of the things that are falling on your day to day that maybe you should be paying more attention to that perhaps won’t lead to a promotion as quickly but, over the longer term, it is more likely to not derail you because you’re paying attention to the things you have to pay attention from an execution perspective versus the things that will propel your career forward. I mean, there’s so many things you can do to break down risk. In your experience, other than professional risk takers that are trying to diminish risk when they’re doing highly risky situations, do you find that normal people in our normal days, are people paying enough attention to risk, how to diminish it, to understand it? 

Michele: No, absolutely not. And I think that some of what people think is, okay, we just want to minimize risk, but risk is actually a two-sided thing. I teach at the DCRO Risk Governance Institute, which is aimed at boards, chief risk officers, and people who deal with risk in their life and we talk about the positive governance of risk taking, which means that you want to take the good risks and you want to avoid the bad risks and you want to find the right balance. And it’s funny how many people have told me, “I got fired and it was the best thing that ever happened to me.” 

Alex: Absolutely. 

Michele: So there’s a risk of staying in a job and succeeding in a job that is not right for you, those golden handcuffs are a risk too. So I always encourage people to ask themselves, “Riskier than what?” and each one of us brings a different bias towards how we see risk. I do a lot of workshops where one of the first questions I will ask is, “How do you define risk?” and I’ll get three batches of answers and it’s amazing how different it is, depending on the group. So, some people are like, “Peril, loss, danger,” something that’s bad, and the other ones are, “Adventure, opportunity, gamble,” and then there are the ones who say, “Well, it depends, it’s a little bit of both,” and, obviously, I’m in the middle of that and each risk has elements of good and bad and it’s not just whether it’s a good or bad thing but whether it’s good or bad for you, for each person. I talk about something called the risk fingerprint, which is — well, if you look at the imprint of a glass at a crime scene, that’s what we might call our risk profile, all the choices that we make, the risks that we take, and those tell the world who we are, but what creates that imprint? That is our risk fingerprint, which, like a real fingerprint, has three parts. There’s the innate part that we can’t change, the whorls and the arches and loops, it’s why it’s such a great biometric identifier, and then there are our experiences, it’s different for some groups of people, it might be the same for certain groups but that’s like if you cut your finger when you’re cooking and it ends up leaving a scar or if you burn yourself, a burn, it changes the fingerprint itself and it changes the biometric identifier, and, for some people, they never want to see anything more dangerous than a plastic spork, again, in their way and, for other people, they say, “Oh, I cut my finger, I put a Band-Aid on, I’m gonna be a sushi chef,” so it’s that combination of the innate plus the experience. And then the third part of it is if you use Shea Butter Lotion and take really good care of your hands or if you’ve got calluses from manual labor or you stick your hand in water for too long, it gets wrinkly, those are the things that we have some control over, our physical environment, our social circles, the processes and habits that we create. For a leader who’s being coached, it’s what’s the risk taking environment that you create for your team, what are you encouraging, what aren’t you encouraging, what are the examples that you are setting? So, all three of these come together and I get asked all the time, “Is there an ideal risk personality or fingerprint?” and I say no, but what’s ideal is that you are mindful enough, that you’re aware enough of how to match your risk fingerprint with the situations in your life. If you like the same thing every day, well, then maybe working at a big corporation is a better risk bet for you, but if you like change, if you like new things, if you don’t want to risk getting bored, if you don’t want to risk having a boss who’s a bully, a control freak, who doesn’t know what they want, then staying at the job is a bigger risk. So, it’s very, very subjective and that’s one of the points that I’m trying to get across and I think it’s something that coaches certainly recognize is that they’re working with the raw material that each client has and they’re trying to propose not just cookie cutter solutions but solutions that fit with that client and understanding this risk fingerprint of your client helps you as a coach to come up with better suggestions that are much more closely tailored to that CEO or the other coaching clients’ needs.

Alex: Absolutely. So, you’re looking at that kind of individual lens. One of your areas of expertise is geopolitical dynamics so let’s say executives these days, there’s so many things that they have to consider in this hyperconnected, systemic world. Are we living through a time where the geopolitical structure of the world, are we in a very heavily risk phase of kind of large scale development? Is the hyperconnectivity driven by technology, the emergence of AI, are these things raising the overall risk of failure in the system or do you see all this progress as being able to allow humanity to progress in a more orderly and, ultimately, positive way? Or is it both? Is it a little bit of, okay, it’s leading to hopefully a better state of affairs? What’s your perspective on kind of where we are in the world today? Because things look very chaotic when you look at the news today and I think the news is always good to kind of separate yourself from the day to day and see overarching patterns and, typically, when you look at the bigger picture and you look at history from a lens that is not micro, that’s more macro across decades and hundreds of years, there seems to be this linear human progress that perhaps is not as easy to perceive when you’re looking at the news cycle, but what are some of your thoughts on this, Michele? I’m very interested.

Michele: Well, I find myself saying it depends a lot.

Alex: Well, that’s a nice way to hedge a little bit of the risk of answering that question. 

Michele: Exactly. You caught me. Busted. But I think one of the things people talk about risks, they talk about identifying risks, clients come to me, “Michele, what are the big risks?” and I always hesitate because this whole idea of a gray rhino works the best if someone identifies the risks in front of them because they’re all coming from different perspectives. And the other part is that it’s not just the risk itself, it’s the response. There’s this feedback loop and if we respond this way, then it could turn out for the best. If we respond that way, not so much. And I also don’t see progress as something linear. It’s so funny, I was just reading about New Coke in some thread on LinkedIn and people love to say, “Oh, the whole New Coke thing, that was such a marketing disaster,” and what’s interesting is that Coke went into that with, they saw that their market share was falling and they did focus groups, they asked people and they found out, yes, people want something sweeter, they changed New Coke, I was in Germany that summer and sort of laughed at my American friends because they introduced it in America first and we still had old Coke in Europe, but there was this huge outcry and that led to Coke bringing back classic Coke, and so people say, “Oh, such a big mistake,” but if you look at it, it actually ended up bringing their market share back up so they achieved what they wanted but —

Alex: Because people were interested in the original, which they weren’t before, but now that it was not available and becomes available, then it becomes appealing again, right?

Michele: Yes, and I doubt that any marketing genius had thought about that ahead of time —

Alex: That’d be a hyper genius. Can you imagine that? That’s Machiavellic, almost.

Michele: And if they had, whether Coke would have gone for it. A lot of companies, organizations, human nature, we’re more afraid of doing the wrong thing to fix whatever the risk is that we’re facing than we are of doing nothing so way too many people just end up doing nothing, or if one person raises their flag as if there’s a red flag, if it’s a roomful of people who’ve all come from the same background, they’re much more likely to just ignore the red flag. So we need to get more used to really recognizing the risks in front of us, recognizing that it’s not enough just to make a list of top risks and say, “Hey, here are the things that are risks,” it’s about identifying how you might respond, what the possible scenarios are, and as far as the geopolitical situation in the world right now and all of the risks, during the pandemic, particularly the first six months of it when I get all these email newsletters and I lost count of how many of them had “unprecedented” or “uncertainty” in the headlines and there was some things, one of these cheesy things that your uncles forward to you but in this case was actually really profound, they said if you’re a 100 years old right now or a little less than 100 years, you had the great flu pandemic, you had the First World War, you had the Second World War, you had all these wars, you had the invention of the atomic bomb, you had all these changes over the 20th century and we like to think that right now these changes that we’re going through are bigger and bigger and bigger, but are they really in comparison to things? So I think everybody goes through their own historical shocks. But I’ve also read, particularly through the pandemic, they’re saying, “Oh, people are taking bigger risks. They’re leaving their jobs, doing things,” and, to me, it wasn’t that they were taking bigger risks, it was that they were defining risks in their life differently. They see their job and they say, “Oh, well, it looks like this company is gonna go under, I’m better off if I go someplace that’s not gonna go under,” or, say, healthcare workers or frontline restaurant and other workers, they’re like, “If I go to work, the risk to me of getting really sick or a customer punching me in the face or whatever, that’s just gone up really high and I’m not being compensated enough for that,” and there were other people who saw that their retirement portfolios boomed because of the run up in markets and they said, “Well, I can afford to retire and why don’t I go do something that I want?” So people reevaluated the risks in their lives and they made different decisions, which goes back to what I was saying before about how risk is not this set-in-stone thing, that it changes depending on our priorities and on the situation around us and that’s why every risk that you take tells the world exactly who you are.

Alex: So many interesting things that I’d like to unpack. The New Coke anecdote that you mentioned is interesting but perhaps I find it interesting in a different way that I think you intended when you were bringing it up. It’s interesting in an age of misinformation and lack of clarity as to what’s truth, that’s also coupled with this kind of nonlinear or complex dynamics. Let’s say that a genius came up with like, “Hey, let’s do this, we’ll draw attention.” We know that good news is good for business and bad news, if it draws enough attention, is also good for business. We’re entering this era where a marketer that’s listening to this maybe like, “Hmm, maybe it’s time that I do that in our business,” to kind of do something that will clearly be a flop, it will clearly mess with some of the long established views or values or likes of whatever our product is and people loving certain aspects and then will retract five days later, it will draw all this attention and it will ultimately be a good thing. I mean, it seems like we’re living in that time where there’s a lot of kind of disingenuous information around and the fact that you could be incentivized by leveraging some of those dynamics, I think it’s alarming. I don’t know if it’s unprecedented but certainly the sheer scale of the markets today, the ability to get in front of billions of people quickly with social media, I mean, it seems like there are a lot of perverse incentives with scale that probably increase the overall kind of risk of things not working out well from a host of global systemic — I’m kind of trying to put together a couple of complex thoughts. Does that make sense to you and what do you make of that?

Michele: Yeah. Well, all the complex things going on, I’ll often tell people that behind every black swan is a crash of gray rhinos. Knowing that you’re not necessarily dealing with all at once that when they all happen at the same time, that’s what creates effects that nobody could have anticipated. And, yeah, there’s a lot. The whole AI development. You know, I go all over the world and I was in Italy in May, I was in China in April, I was across Asia and Europe last fall, and I always get questions about AI. What do you see about the AI gray rhino risks? And there’s all sorts of things. And I mentioned them briefly in the Gray Rhino, which was written in 2015 and we didn’t know nearly what we do. But, for me, the biggest thing is this lack of connection with reality. You don’t know what was written by a robot and what wasn’t. In fact, I just saw that there had been — one of the AI detectors was pulled from the market because it just didn’t work. They can no longer tell what the AI is and what’s the people so that’s a pretty scary thing. But, yeah, this whole thing about what’s reality is, oh, one of these things, I often call a meta gray rhino is it’s a structural thing. It makes it so hard for you to fix the problems if people can’t agree on what the problems are, they can’t agree on the risks. 

Alex: I love that you’re tapping into that because it’s hard to solve problems when we clearly identified the problem and finding solutions to certain problems sometimes it’s very difficult. But the problems that we are facing in society at large are complex and if we can’t even agree on what the problems are, how do you get started? And I think this is very related to coaching, which is how do we create alignment between people that have different views? And I think that’s probably what a lot of people are trying to do with society at large today. So how do we leverage different points of views in a way that creates these unison of understanding versus just clashing with everyone that doesn’t align with the way you look at things?

Michele: Such a great question. And here in Chicago and Illinois, we have a huge, huge gap of worldviews, and in an organization or for a CEO thinking about things, I think the first thing is to make sure that you’ve got diverse viewpoints and acknowledge the strength of diverse viewpoints. When it comes to risks, you’re going to have different risk fingerprints, different risk profiles, make sure that you recognize those as strengths so that people can offer different perspectives and don’t take it personally when people offer competing perspectives, think of it as a way to help potentially head off things that you couldn’t even have seen coming. So I think that’s one part of it. Being aware sometimes of why somebody feels the way they do can help you to get past barriers. With risk as a particular example, I often ask and I get huge laughs about this, how much time do you leave to go to the airport? Particularly Chicago here where the traffic can be unpredictable. If you’re with a colleague and you both want to go to the airport and one of you likes to race to the gate at the last minute and the other one likes to get there ridiculously early, how do you fix that? But if you each know that it’s not just that your colleague is annoying, it’s that two weeks ago, they missed a plane because they didn’t get there soon enough, or if you realize that the one who likes to race at the last minute, they’re not less anxious about it, they’re just controlling what they can, which isn’t necessarily the most constructive response, but once you can see why somebody else has the position that they do, it can make it easier to get past whatever the obstacle is between you. And so having open conversations — another example, I’ve done a lot of faux workshops with first responders, different parts of the world, and in one case, someone will say, “Oh, yeah, terrorism is a threat,” and someone else says, “Terrorism is a threat,” and they’re both looking at terrorism from completely different potential sources. And so that’s where you need to have a common trust in some source of objective research that tells you what they are and you need each person to really define the risk. Another example, I was doing a workshop where some guy — I asked everybody to identify their own gray rhinos and then they broke into groups, so some guy said technology and I thought he meant what people usually are talking about, at least the ones I bump into, which is about technological change and digital disruption, how do you optimize your business, and he was just like, “No, it’s like the computers are getting old. The computers are gonna be obsolete and we’re not upgrading our computers often enough,” which is a fair point but it wasn’t at all what I was thinking about. So, it’s so important to get people to really talk about the problem, what the problem might be related to, what’s causing it, if you can solve this problem and that might solve a whole bunch of other problems, climate change is also going to solve some health issues, some pollution issues, some energy cost issues, or if there’s no way you solve this problem unless you can solve something else. In many companies, it’s the fear of change, the fear of doing anything about problems, it’s a cultural thing, it’s sort of a meta gray rhino. 

Alex: Climate change is a very interesting one because, right now, a lot of companies see climate change as a detractor for profitability but if we don’t do anything about it in the decades to come, will actually be a huge hindrance to economic growth. So I think where we’re getting at in our discussion today is that a lot of the problems that we’re facing are complex systemic problems. It’s like our age, it used to be that we were solving how do you have enough wheat to go through the winter? I mean, those are complicated problems, but the nature of complexity, we just don’t have that much experience as humans and human systems to deal with this very difficult nonlinear dynamics. So I talk to a lot of coaches and it’s interesting how coaches have had to continue to upskill their game because they’re working with clients that are experiencing this very different dynamic than we’re all used to and the world seems to be speeding up and speeding up and how do you slow down and assess things properly? I mean, what you were just talking about with the computers are like different levels of analysis that are coming into one same conversation, so even in just like a simple question, it’s like someone may be like, “Oh, computers.” Oh, yes. Is AI gonna take over? And he’s like, “No, these are like 1997 IBM computers that probably need to be replaced.” So it’s like very different lengths at the same conversation so it’s interesting. So, as we’re closing out our conversation today, what are some of the recommendations or suggestions you have for coaches working, let’s say, with clients in organizations that are facing all of these geopolitical, systemic kind of components that used to not be as relevant to your day to day and now, working in large organizations, those have become more important. How can coaches be more prepared to work with those clients that work in complex environments?

Michele: Well, even just mentioning complex environments is interesting. I find huge cultural differences between Asia where the gray rhino is very, very big and in the US where I’ve gotten some more pushback, and some cultures are much better at dealing with complex systems and some aren’t.

Alex: What’s the pushback like?

Michele: From like, “Oh, well, oh, it’s a black swan. What do you mean it’s obvious? If it’s obvious, we’re dealing with it. So what’s the point of talking about needing to deal with all these things because we’re already dealing with it?” Real defensiveness.

Alex: But it’s interesting because the way people are defining black swans, a lot of these are not really black swans because if they were, we wouldn’t be talking about them all the time because if they —

Michele: Exactly.

Alex: We’re living in an age of black swans happen everywhere, I think your point is, well, if you actually look at the gray rhino, you would see the black swan coming, but the thing is, you think it’s a black swan because you’re not paying attention to all the indicators. So they’re not really truly black swans, they’re just events that have — I love the high probability of low probability events. It’s such — well, maybe we’re not talking about the same thing, maybe what we call black swans are not black swans because of the high probability of a low probability event.

Michele: I mean, on the one hand, if you’re talking about something by definition, it’s not a black swan, if somebody’s talking about it, it’s not a black swan, and if you can see it in front of you, it’s a gray rhino, and I think complexity is important, looking at how things come together and, in fact, it’s been interesting in the last couple of years, a lot of the annual risk trends list do talk much more about systemic approaches, how could this problem interact with another one, so that’s one thing. The second is being conscious of cultural differences within your organization, if you’re a multinational, there’s huge, huge, huge cultural differences around risk perceptions that you should be aware of. I think Asians tend to be much more perceptive and proactive than Westerners and particularly Americans and I found that Europe tends to be in the middle somewhere. Self-awareness of what you are bringing to the risks that your organization faces, your clients should have self-awareness of what they’re bringing to that situation and how we can optimize processes, how they can make sure they’ve got the right team to complement their strengths and to offset their weaknesses when it comes to risk and decision making. The importance of a diversity of risk perspectives and also that they are aligned with what you want your company to be, whether you want it to be a stodgy legacy company where the biggest risk is that it’s going to become obsolete if nobody does anything because that’s how we have always done things, or a startup where the biggest risk is that it doesn’t grow up enough. Often, startups aren’t as aware of certain risks as they could be and they just kind of push forward and aren’t as aware and need some more grownups in the room. So really having a real diversity of risk fingerprints and profiles is very, very important and to appreciate those differences and be self-aware and be aware of what each team member brings to the table.

Alex: Love that, Michele. So much to unpack with everything you said today but we’re really at the top of the hour here in this episode of Coaches on Zoom Drinking Coffee. Thank you so much for joining me and sharing your very valuable insights. I think we’re all going to be thinking about gray rhinos for at least a couple of weeks so thank you so much.

Michele: Thank you. I really enjoyed the conversation.