About grey rhino’s, black swans and the incumbent’s dilemma

About grey rhino’s, black swans and the incumbent’s dilemma

Black swan versus Grey Rhino Image by Holger Detje from Pixabay and by Geran de Klerk on Unsplash



There are a number of articles online comparing COVID-19 to a black swan event. But is it really?


Let’s check out some definitions. Investopedia describes a black swan as “an unpredictable event that is beyond what is normally expected of a situation and has potentially severe consequences. Black swan events are characterized by their extreme rarity, their severe impact, and the widespread insistence they were obvious in hindsight.”


Impact? Check.
Obvious in hindsight? Check.
Extreme rarity? Not so sure… Humanity’s history has been rife with widespread pandemics. Smallpox, tuberculosis, the black death (killing 75-200 million people in the 14th century), not to mention the 1918 spanish flu pandemic, which killed an estimated 20 to 100 million people (caused by the H1N1 virus which also cause the swine flu pandemic in 2009). SARS, H5N1 (the birdflu), the Zika virus, smallpox (which was virtually eliminated thanks to … vaccinations). And the list goes on  As a matter of fact, Bill Gates mentioned it in his Gates notes already in 2015. Which could mean that the new coronavirus wasn’t really a black swan event, but something more akin to a “grey rhino”.


So what is a “grey rhino”? Other than a  massive beast that can trample you to pieces, a “grey rhino” is a highly probable, high impact yet neglected threat. Where these differ from a black swan event is that they are NOT random, NOT unexpected, but they are preceded by a number of warnings and visible evidence. Yet, decision makers, governments and companies rarely act on them until it is too late, because they consider them too remote, and neglect them.


“highly probably, high-impact, yet neglected threats.”


So maybe COVID-19 was not a black swan, but something that we knew was coming one day but chose to ignore. Much like big companies tend to ignore incumbents eating away at their margin, while they are focusing on the next quarter’s results of their cash cow products.

BCG Growth Matrix

The BCG Growth Matrix helps you identify your rising stars.

This is something that those familiar with the BCG Matrix (a.k.a. The Boston Consulting Group matrix or growth-share matrix) will recognize. Deciding whether the “question marks” you are investing time, money and effort in will be able to turn into stars or not. This proves to be quite difficult for larger companies, as they are not very keen on betting the firm on new innovations. But for those who do, it can pay off big time. An interesting case study here is Microsoft, that under the leadership of Satya Nadella was able to significantly grow its market cap by making the transition to the cloud and AI (for those interested in more, Nadella’s book “Hit Refresh” is a good read).

Microsoft Stock rise since Nadella became CEO

Microsoft stock rise since Nadella became CEO

The incumbent’s dilemma – why are companies blindsided?


Very often they are blindsided by disruption because they did not see the grey rhino that was coming for them. There is no one reason for this, but it is mostly a combination of the below reasons.


  • It can be that their core products are built on “older” tech or legacy platforms that need to be maintained, and where new products or additions need to work/plug in/be backwards compatible with these platforms… Startups, on the other hand, can often start from a clean slate, giving them faster time to market. The answer to this is very simple: accelerated digital transformation (ok, even though the answer is simple, implementing it is a daunting task)
  • Due to their structure bigger companies also tend to move slower the bigger they get: testing, retesting, panels, committees, approval loops, all things startups are not bogged down by. This is one of the more difficult things for bigger companies – making sure that innovations from within are not stopped by corporate policies and politics – something that should be recognized by the corporate leadership and addressed from the top through real support for change, and not just innovation theatre.
  • And of course the other part of incumbent’s dilemma of keeping their shareholders happy with cash cows generating revenue versus investing in new and unproven products, techniques, business models. Companies should keep an eye out for what is happening in the market, identify the forces that can disrupt their cash cows and make sure to really act on them. Various solutions to address this are possible, ranging from innovation teams over internal programs to stimulate innovation throughout the company, all the way to corporate Venture Capital groups.


As mentioned before, what they absolutely need to avoid is the infamous Innovation theatre”, where big companies realize that they have the challenges mentioned above, and desperately try to address these with all kinds of innovation initiatives… that then don’t get implemented because of the issues listed above.


In summary, the problems to address are: failure to see the strategic inflection points coming, failure to see the disruptors coming from different angles, and failure to act and really implement change.


PS if you’re wondering what other grey rhino’s are still out there, have a look at this Politico article.




Startup success is the execution of your ideas

Startup success is the execution of your ideas



Startup success is in the execution of your ideas


“Ideas are just a multiplier of execution” is what Derek Sivers wrote in his book “anything you want”: You can see how this plays out in the visual scoring table of idea versus execution below. To see the true value, you need to multiply the idea with the execution.


ideas are a mulitpier of execution


Investor logic supports this approach: investors usually prefer investing in an A-team with a B-idea instead of the other way around. This is because ideas are easy, turning them into a profitable business isn’t. Once you have your brilliant idea, you need to see if it sticks, check with real potential customers if it is a viable solution to a real need that they have. You will need to get out of your bubble and gather hard feedback. You will need to create a product, scrape money together, build a first version (MVP) of that product, and IF you get traction, scale the business. It sounds easy enough, but as the startup curve shows, it’s a tough process, and most don’t make it past this stage.

The Startup Curve

The Startup Curve

Once you do get to a real solution/market fit, you’re ready to start scaling. But be warned: scaling at a rapid pace comes with its own unique set of challenges. What has worked for your startup in the past may not work going forward with your scale-up. You’ll likely experience additional stress and chaos that comes with exponentially growing your company. You will need to navigate additional pitfalls like shifting focus and alignment, hiring prematurely or too late, establishing long term goals, focusing too much or too little on marketing, postponing the next funding round, and lacking of a scalable infrastructure, to name but a few.

Implementation is everything

Everything needs to fit together in order to get to a successful implementation of your growth plans. Ignace Van Doorselaere, current CEO of Neuhaus, explains thus as follows:  “If you line up five dominoes, and you push the first … so that the second, third and fourth fall – but the fifth remains standing – then the score is not 4 out of 5, but 0 out of 5. Because everything that is not implemented does not exist.”

The good news is that companies have been scaling for ages, and that there are some strategies you can build upon. One needs real implementation of the strategy and ideas, because if something isn’t implemented, it’s all wasted effort. You’ll need to take a hard look at your current capabilities and how they fit with your future aspirations, clarify your strategic priorities/opportunities/challenges, and then build an action plan to take your company to the next level.



Always think Attack – what does self-defense have to do with management

Always think Attack – what does self-defense have to do with management

Some years ago, I assisted Ignace Van Doorselaere with the creation of his book “Always Think Attack, street fighting techniques for managers“. This project allowed me to combine my professional knowledge with my activities as a self-defense instructor.

The purpose of the book was to help create better managers that keep the focus on their customers, employees and shareholders. We were not advocating dirty tricks for managers, but on the contrary, using the principles of self-defense to protect companies against disruptive forces.

Purpose of a fight: survive

Self-defense is all about self-preservation. This means avoiding to fight if possible, but but be extremely effective if you cannot avoid the fight. Projecting this on your company, the goal is self-preservation in the long term, which usually means thinking of what is best to both your customers and shareholders. But at the same time be prepared to take immediate action to ensure the survival of your company.

Avoiding the fight – be aware of your environment

In self-defense we call this the pre-fight situation, where you can still get away without having to resort to violence or being attacked. This is broken down into avoidance (don’t get into the fight) and control (stop a situation from escalating, or defuse it). Because once you do get into a fight, you may not escape unharmed either. So the key here is to be alert, and scan for threats around you. This crosses over well into the corporate world, where you need to be on the lookout for potential threats to your company. Those threats can be competitors but also market forces at work that may in the long run totally disrupt your business. Look out for the small signals that can lead to big changes!

Winning = execution

“Winning” in the case of self-defense means that your attacker is not willing or able to continue. This can be through being “broken” either physically or mentally. To be able to win, you will need focus and impact. A near miss is still a miss. Winning means reaching the goals you set, and not letting your ego or emotions get the better of you. In practice, this may mean running like hell if you are attached by a huge group of attackers, because it is in line with your long term goal of survival without being injured.

In the business world, you will need an actual growth state of mind, and the real implementation of the strategy and ideas, because if something isn’t implemented, it’s all wasted effort. A strategy can be for example deciding to not enter a certain market because it is a red ocean for you. But once you do commit your company, don’t do it halfheartedly.

You cannot fool human intuition

Listening to your intuition is important both on the street and in the office. It’s usually your brain or subsconcious mind trying to tell you something that you have not yet consciously realised. So if you have a nagging feeling about a competitor or new product, take a good hard look at them, because there are subtle signs of an imminent danger that you may have missed.

Stay flexible

“If you have a hammer, everything looks like a nail” is a trap that people can fall into. In self-defense, if your strategy or tactics don’t work, change them rapidly before you get in more trouble than you already are. The same goes for corporate life. Don’t hang on to your strategic long range plan if the ground starts to shift beneath you but be ready to shift into a totally new direction.

You can order the book in Dutch on the site of 4F (link here).