The greatest risks are often the ones we fail to imagine. Organizations spend millions on risk mitigation, yet time and time again, leaders are blindsided by long-tail events—low-probability but high-impact crises that emerge from complex, interconnected systems.
Whether it’s a cyber vulnerability traced back to a decades-old regulatory decision or a seismic shift in the geopolitical landscape, the inability to foresee these risks isn’t just bad luck – it’s a failure of imagination.
In this third installment of Gamechangers in Resilience, Mark Heywood unpacks why organizations struggle to anticipate long-tail risks and how they can overcome cognitive biases that prevent proactive risk management. He challenges leaders to embrace scenario thinking, build adaptability into decision-making, and create cultures that encourage “what if?” thinking—not just for risk mitigation, but as a competitive advantage.
Because in an uncertain world, the organizations that imagine the unexpected are the ones that will survive and thrive.
Q: What do you think needs to happen in business to encourage greater imagination around improbable events with massive consequences?
Encouraging greater imagination around improbable events with massive consequences requires a fundamental cultural and structural shift in how businesses approach strategy, risk management, and leadership. Imagination isn’t a natural part of most corporate environments, which tend to prioritise efficiency, predictability, and short-term results. To make space for the consideration of improbable events businesses need to intentionally cultivate curiosity, foresight, and a willingness to challenge conventional thinking.
Here’s what I think needs to happen:
1. Reframe risk as opportunity
In most organisations, risk is seen as a threat to be minimised, rather than as an opportunity to uncover hidden vulnerabilities, test resilience, or gain a competitive edge.
Encourage a mindset that treats risk as an essential tool for growth and innovation. Leaders must foster a culture where employees feel comfortable asking what if? and exploring outlier scenarios, not just for the sake of preventing failure, but for discovering untapped potential.
Cognitive flexibility is crucial. It’s hard to pivot in a crisis if you’ve not developed the right mindset. Integrate risk imagination workshops into strategic planning, where teams are tasked with brainstorming improbable, high-impact scenarios – not just to mitigate them, but to identify how the business could adapt, pivot, or even thrive if they occurred.
During COVID-19 pandemic, companies that had previously run pandemic scenario exercises found themselves better prepared to pivot operations and meet demand surges. Thinking about the improbable wasn’t just about surviving – it gave them a market advantage.
2. Bring in unconventional voices
Most business decisions are made by leaders who share similar backgrounds, experiences, and thought processes. This creates groupthink, where organisations struggle to imagine risks or events outside their shared worldview.
Actively seek diverse perspectives, both within the organisation and from external sources. Bring in people from unconventional fields – futurists, science fiction writers, behavioural scientists, artists, anthropologists, and risk experts – to challenge assumptions and expand the conversation.
Key action: Establish cross-disciplinary panels or advisory boards specifically tasked with exploring extreme what-if scenarios. Pair these panels with internal teams to develop actionable insights.
3. Encourage leadership to think in terms of decades, not quarters
Many large businesses make public statements about how proud they are to have served customers for over a hundred years. The reality is often different.
Businesses are often trapped in short-term thinking, driven by quarterly earnings, immediate shareholder expectations, or the pressure to deliver rapid results. This discourages leaders from imagining scenarios with long-term consequences or benefits.
Shift the focus of leadership conversations from quarterly performance to decade thinking. Encourage leaders to ask, What decisions are we making today that could reverberate in 10, 20, or even 50 years? How can we ensure we remain resilient in an uncertain future?
Key action: Create legacy audits to periodically review past decisions and identify potential long-term risks or opportunities they may have created. Use these reviews to help current leaders focus on decisions that matter in the long run.
4. Institutionalise scenario thinking
Most businesses think in terms of linear forecasts – if X happens, then Y will follow – which limits their ability to prepare for improbable, nonlinear events that emerge from complex, interconnected systems.
Institutionalise scenario thinking as a core business practice, encouraging teams to explore not just most likely futures, but plausible extremes. This involves identifying wildcard events – low-probability but high-impact scenarios – and stress-testing business strategies against them.
Key action: Establish dedicated foresight teams or functions that continually explore emerging risks and trends, integrating scenario exercises into decision-making processes.
5. Incentivise creativity in risk management
Risk management is often treated as a compliance exercise, focused on ticking boxes rather than exploring imaginative, outlier possibilities. Risk teams tend to focus on known threats, not unknown opportunities or disruptions. There is a big difference between risk administration and the actual management of risks.
Redefine the role of risk management to include creative exploration of uncertainty. Incentivise risk professionals to imagine improbable scenarios, challenge organisational assumptions, and propose unorthodox mitigation strategies.
Key action: Reward teams not only for preventing risks but for uncovering and preparing for outlier scenarios. Tie this work to leadership KPIs or organisational resilience goals.
6. Embed failure stories into organisational learning
Businesses are often hesitant to analyse past failures or crises in depth, as they may trigger defensiveness or blame. However, these events are rich learning opportunities for imagining improbable futures.
Create a culture where failure stories are celebrated as a source of learning. Encourage teams to study past crises – whether internal or external – to understand how small decisions, systemic issues, or overlooked signals contributed to major events.
Key action: Hold post-mortems or reverse case studies of improbable events (e.g., data breaches, financial crashes, supply chain collapses) to identify patterns and better prepare for similar risks in the future.
7. Build imagination into the culture
Many organisations stifle imagination because they are overly focused on operational efficiency, rigid hierarchies, or proven methods. Creativity is often dismissed as impractical or a waste of time.
Foster a culture where imagination is encouraged at all levels. Allow employees to spend time exploring blue sky ideas, challenge assumptions, and propose unorthodox solutions without fear of ridicule or rejection.
Key action: Dedicate time and resources to imagination initiatives, such as innovation labs, hackathons, or risk imagination days, where teams brainstorm improbable scenarios and explore their implications for the business.
8. Collaborate across industries and ecosystems
Imagination around improbable events often suffers because businesses operate in isolation, focusing narrowly on their own sector or markets. However, many long-tail risks (e.g., climate change, systemic cyberattacks, global pandemics) transcend industries and require collective preparation.
Collaborate with competitors, regulators, academics, and other industries to identify and prepare for systemic risks. Shared insights and resources create a broader base of imagination and resilience.
Key action: Participate in industry consortia or cross-sector initiatives to share data, pool resources, and jointly model extreme risks.
How this plays out in the movies
The dance between structure and creativity
Movie: Apollo 13 (1995) – Scene: “We need to fit a square peg into a round hole.”
- NASA engineers use creativity under extreme pressure to create a CO2 filter using only the materials available on the spacecraft. This scene reflects how structure and creativity can work together to solve complex problems – much like the balance described in my own journey.
Boards providing stability during crisis
Movie: The Darkest Hour (2017) – Scene: Churchill’s Cabinet War Room meetings.
- In the face of Nazi invasion, Churchill’s war cabinet debates whether to negotiate with Hitler or fight. The tension and Churchill’s leadership embody the need for a board to stay calm, provide clarity, and maintain focus on the bigger picture – crucial behaviours for effective board crisis management.
Micromanagement vs Empowerment
Movie: Moneyball (2011) – Scene: The tension between Billy Beane (GM) and Art Howe (coach).
- Howe resists Beane’s unconventional, data-driven approach to selecting players. This clash mirrors the danger of boards micromanaging executives during a crisis instead of empowering them to execute decisions.
Emotional bias and cognitive blind spots
Movie: The Big Short (2015) – Scene: The meetings where investors dismiss the looming housing collapse.
- The financial world’s overconfidence and cognitive blind spots align with the insight about emotional bias and long-tail risks. Decision-makers, blinded by past successes, ignore the signs of the impending collapse.
Rebuilding trust after crisis
Movie: The Social Network (2010) – Scene: Zuckerberg testifying in depositions.
- Facebook’s efforts to manage reputational damage after lawsuits highlight how misaligned messaging and lack of transparent communication can erode trust – a core theme in the section on rebuilding trust.
Technical resilience and illusions of security
Movie: Live Free or Die Hard (2007) – Scene: The “fire sale” cyberattack on U.S. infrastructure.
- The film’s depiction of cascading failures due to weak systemic resilience echoes the point about technical systems often being built to look resilient rather than be resilient.
Complacency and the need for imaginative risk thinking
Movie: Titanic (1997) – Scene: The ship hitting the iceberg.
- Overconfidence in Titanic’s “unsinkable” design mirrors the complacency I warn about. The ship’s builders underestimated long-tail risks and dismissed potential weaknesses in the design.
Imagination as a strategic capability
Imagination isn’t a soft skill – it’s a strategic capability. To build it, organisations must rethink their culture, leadership priorities, and approach to risk.
Businesses that embrace imagination don’t just prepare for improbable events – they position themselves to seize opportunities in uncertainty, adapt faster than their competitors, and thrive in a volatile world. It’s not about predicting the future but about building the capacity to navigate it, no matter what it holds.
