B2B businesses rely on facts, long-term pipelines and forecasting models to make everyday decisions. Their marketing leaders need to understand the industries they serve, something which involves careful planning and a 360° view of the factors affecting partners, clients, and their customers. This has made a crisis like the pandemic an especially challenging time for B2B decision-makers. Nonetheless, there is a model of thinking about unpredictable challenges like the COVID-19 pandemic that is important to revisit today.
In 2007, just months before the start of the Great Recession, investor and mathematician Nassim Nicholas Taleb published The Black Swan, a book that would come to shape analysts’ understanding of the financial crisis and influence our perception of subsequent economic and social shocks. “Black Swans” as defined by Taleb, are highly unpredictable events with catastrophic consequences, which, in hindsight, are always deemed to have been predictable at one point.
The coronavirus pandemic is one such event. Countless studies of the current crisis have condemned the failure of private and public institutions to prepare for a pandemic of its scale, especially considering the seasonal recurrence of smaller-scale global pandemics like Ebola, H1N1, and SARS. In reality, few institutions had a pandemic in mind at the start of 2020 during a historic economic boom. Understanding how Black Swan events work, and how they fit within economic shifts, is necessary for B2B businesses to build brand endurance and improve in times of crisis.
Although people tend to view history as an upward trending continuum —gradually pushing towards progress and improvement — Taleb claims that the majority of human development takes place in leaps and bounds as a response to Black Swan events that spur innovation and problem-solving at a universal scale, such as wars, pandemics, and social crises.
According to Taleb, catastrophic Black Swan events tend to, in the long run, strengthen businesses and the economy. This counter-intuitive notion reflects a simple reality: businesses can learn a lot from past mistakes to improve processes and deliver solutions. This, in turn, eventually allows businesses to learn from failure and develop groundbreaking products, stronger messaging, CSR programs, and services which, after the end of a crisis, spur unprecedented growth.
Understanding Black Swan events involves accepting that, due to their very nature, they can’t be forecast or preemptively addressed. By definition, they catch businesses unprepared, leading to maximum market uncertainty and a serious loss of consumer confidence.
For B2B clients, uncertainties and stresses on consumer markets can mean that companies will seek reassurance and reliability from their B2B partners. This means that B2B companies are uniquely positioned to deliver stability and hope to industries from their position in the supply chain. Architects and AEC companies, for example, are poised to use their visionary and problem-solving mentalities to envision bold solutions to immediate problems. In the B2B payments world, a company like [BG client] ACI Speedpay, for example, has recently proven its value in the current crisis by providing consumer-facing clients with payment solutions and messaging to reassure their customers in a volatile economy.
In a recent article published on Harvard Business School’s “Working Knowledge” website, business writer Dina Gerdeman explored the reasons why, after the 2011 Tōhoku earthquake and tsunami, Japanese companies were able to both survive and thrive after the catastrophe. According to Gerdeman, their success owes in large part to a culturally distinct business ethic that focuses on immediate community support and social altruism.
Paraphrasing Harvard Business School professor Hirotaka Takeuchi, she writes: “Volatile periods present the ultimate opportunity for leaders to put themselves in the shoes of those who are suffering and take action to ‘make the future.’”
This kind of corporate social responsibility, in turn, helps build consumer trust and a stable economy where businesses take a significant stake in the progress of the country — leading to economic growth and business-friendly economic policies.
Gerdeman notes several instances of companies taking action to help citizens affected by the natural disaster — with a near complete disregard for costs — and highlights how this culture has ensured the notorious longevity of Japanese businesses. According to Takeuchi, 40% of all companies that have survived more than 300 years are located in Japan.
With this kind of business ethic, companies ensure that Black Swan events prove the value of the private sector in both responding to shocks and surmounting the challenges they bring.
By seeing opportunities for growth and improvement in times of crisis, providing clients with bold messaging and vision, and enacting sincere CSR programs — B2B companies can also ensure long-lasting brand longevity in the face of crises.