0:00:01.375,0:00:05.351 So what if there were[br]a highly obvious problem 0:00:05.375,0:00:06.976 right in front of you? 0:00:07.000,0:00:10.143 One that everyone was talking about, 0:00:10.167,0:00:12.458 one that affected you directly. 0:00:13.542,0:00:17.851 Would you do everything[br]within your power to fix things 0:00:17.875,0:00:19.333 before they got worse? 0:00:20.667,0:00:22.393 Don't be so sure. 0:00:22.417,0:00:26.851 We are all much more likely[br]than any of us would like to admit 0:00:26.875,0:00:29.851 to miss what's right in front of our eyes. 0:00:29.875,0:00:31.309 And in fact, 0:00:31.333,0:00:35.059 we're sometimes most likely[br]to turn away from things 0:00:35.083,0:00:39.726 precisely because of the threat[br]that they represent to us, 0:00:39.750,0:00:41.875 in business, life and the world. 0:00:43.125,0:00:47.417 So I want to give you an example[br]from my world, economic policy. 0:00:48.708,0:00:52.018 So when Alan Greenspan[br]was head of the Federal Reserve, 0:00:52.042,0:00:57.518 his entire job was to watch out[br]for problems in the US economy 0:00:57.542,0:01:00.268 and to make sure that they[br]didn't spin out of control. 0:01:00.292,0:01:02.226 So, after 2006, 0:01:02.250,0:01:04.809 when real estate prices peaked, 0:01:04.833,0:01:09.434 more and more and more[br]respected leaders and institutions 0:01:09.458,0:01:12.059 started to sound the alarm bells 0:01:12.083,0:01:16.125 about risky lending[br]and dangerous market bubbles. 0:01:17.250,0:01:21.059 As you know, in 2008[br]it all came tumbling down. 0:01:21.083,0:01:22.643 Banks collapsed, 0:01:22.667,0:01:25.893 global stock markets[br]lost nearly half their value, 0:01:25.917,0:01:30.518 millions and millions of people[br]lost their homes to foreclosure. 0:01:30.542,0:01:31.809 And at the bottom, 0:01:31.833,0:01:35.208 nearly one in 10 Americans[br]was out of work. 0:01:36.875,0:01:39.226 So after things calmed down a little bit, 0:01:39.250,0:01:43.976 Greenspan and many others[br]came out with a postmortem and said, 0:01:44.000,0:01:46.042 "Nobody could have predicted that crisis." 0:01:46.792,0:01:49.268 They called it "a black swan." 0:01:49.292,0:01:52.101 Something that was unimaginable, 0:01:52.125,0:01:56.125 unforeseeable and completely improbable. 0:01:57.500,0:01:59.518 A total surprise. 0:01:59.542,0:02:03.434 Except it wasn't always such a surprise. 0:02:03.458,0:02:07.851 For example, my Manhattan apartment[br]nearly doubled in value 0:02:07.875,0:02:09.934 in less than four years. 0:02:09.958,0:02:13.226 I saw the writing on the wall[br]and I sold it. 0:02:13.250,0:02:15.851 (Laughter) 0:02:15.875,0:02:18.125 (Applause) 0:02:19.792,0:02:22.018 So, a lot of other people[br]also saw the warning, 0:02:22.042,0:02:23.667 spoke out publicly 0:02:24.958,0:02:26.934 and they were ignored. 0:02:26.958,0:02:31.184 So we didn't know exactly[br]what the crisis was going to look like, 0:02:31.208,0:02:33.226 not the exact parameters, 0:02:33.250,0:02:35.101 but we could all tell 0:02:35.125,0:02:41.476 that the thing coming at us[br]was as dangerous, visible and predictable 0:02:41.500,0:02:44.708 as a giant gray rhino[br]charging right at us. 0:02:45.792,0:02:47.809 The black swan lends itself 0:02:47.833,0:02:51.708 to the idea that we don't have[br]power over our futures. 0:02:52.750,0:02:57.559 And unfortunately, the less control[br]that we think we have, 0:02:57.583,0:03:00.684 the more likely we are to downplay it 0:03:00.708,0:03:02.708 or ignore it entirely. 0:03:04.458,0:03:08.309 And this dangerous dynamic[br]masks another problem: 0:03:08.333,0:03:10.518 that most of the problems[br]that we're facing 0:03:10.542,0:03:13.143 are so probable and obvious, 0:03:13.167,0:03:16.625 they're things that we can see,[br]but we still don't do anything about. 0:03:17.792,0:03:20.268 So I created the gray rhino metaphor 0:03:20.292,0:03:23.351 to meet what I felt was an urgent need. 0:03:23.375,0:03:25.893 To help us to take a fresh look, 0:03:25.917,0:03:28.601 with the same passion[br]that people had for the black swan, 0:03:28.625,0:03:32.476 but this time, for the things[br]that were highly obvious, 0:03:32.500,0:03:36.458 highly probable, but still neglected. 0:03:38.542,0:03:41.351 Those are the gray rhinos. 0:03:41.375,0:03:43.684 Once you start looking for gray rhinos, 0:03:43.708,0:03:46.417 you see them in the headlines every day. 0:03:47.250,0:03:50.976 And so what I see in the headlines[br]is another big gray rhino, 0:03:51.000,0:03:55.167 a new highly probable financial crisis. 0:03:56.458,0:04:00.309 And I wonder if we've learned anything[br]in the last 10 years. 0:04:00.333,0:04:03.726 So if you listen[br]to Washington or Wall Street, 0:04:03.750,0:04:10.542 you could almost be forgiven for thinking[br]that only smooth sailing laid ahead. 0:04:11.375,0:04:14.476 But in China, where I spend a lot of time, 0:04:14.500,0:04:17.392 the conversation is totally different. 0:04:17.416,0:04:19.642 The entire economic team, 0:04:19.666,0:04:22.643 all the way up to president[br]Xi Jinping himself, 0:04:22.667,0:04:25.393 talk very specifically and clearly 0:04:25.417,0:04:29.268 about financial risks as gray rhinos, 0:04:29.292,0:04:31.518 and how they can tame them. 0:04:31.542,0:04:33.143 Now, to be sure, China and the US 0:04:33.167,0:04:35.434 have very, very different[br]systems of government, 0:04:35.458,0:04:37.768 which affects what[br]they're able to do or not. 0:04:37.792,0:04:40.601 And many of the root causes[br]for their economic problems 0:04:40.625,0:04:41.976 are totally different. 0:04:42.000,0:04:45.601 But it's no secret[br]that both countries have problems 0:04:45.625,0:04:49.583 with debt, with inequality[br]and with economic productivity. 0:04:51.042,0:04:53.250 So how come the conversations[br]are so different? 0:04:54.167,0:04:56.018 You could actually ask this question, 0:04:56.042,0:04:58.351 not just about countries, 0:04:58.375,0:05:00.684 but about just about everyone. 0:05:00.708,0:05:04.601 The auto companies that put safety first 0:05:04.625,0:05:07.393 and the ones that don't bother[br]to recall their shoddy cars 0:05:07.417,0:05:09.917 until after people die. 0:05:12.417,0:05:17.893 The grandparents who,[br]in preparing for the inevitable -- 0:05:17.917,0:05:19.708 the ones who have the eulogy written, 0:05:21.125,0:05:23.018 the menu for the funeral lunch. 0:05:23.042,0:05:24.518 (Laughter) 0:05:24.542,0:05:25.851 My grandparents did. 0:05:25.875,0:05:27.351 (Laughter) 0:05:27.375,0:05:32.476 And everything but the final date[br]chiseled into the gravestone. 0:05:32.500,0:05:34.977 But then you have the grandparents[br]on the other side, 0:05:35.001,0:05:37.518 who don't put[br]their final affairs in order, 0:05:37.542,0:05:39.143 who don't get rid of all the junk 0:05:39.167,0:05:41.268 they've been hoarding[br]for decades and decades 0:05:41.292,0:05:43.083 and leave their kids to deal with it. 0:05:44.208,0:05:48.268 So what makes the difference[br]between one side and the other? 0:05:48.292,0:05:50.893 Why do some people[br]see things and deal with them, 0:05:50.917,0:05:53.167 and the other ones just look away? 0:05:54.958,0:05:58.268 So the first one has to do[br]with culture, society, 0:05:58.292,0:05:59.750 the people around you. 0:06:00.917,0:06:03.601 If you think that someone around you 0:06:03.625,0:06:06.393 is going to help[br]pick you up when you fall, 0:06:06.417,0:06:09.625 you're much more likely[br]to see a danger as being smaller. 0:06:10.542,0:06:15.226 And that allows us to take[br]good chances, not just the bad ones. 0:06:15.250,0:06:17.643 For example, like risking criticism 0:06:17.667,0:06:21.184 when you talk about the danger[br]that nobody wants you to talk about. 0:06:21.208,0:06:24.101 Or taking the opportunities[br]that are kind of scary, 0:06:24.125,0:06:27.393 so in their own way are gray rhinos. 0:06:27.417,0:06:31.375 So the US has a very[br]individualist culture -- go it alone. 0:06:32.125,0:06:33.726 And paradoxically, 0:06:33.750,0:06:37.476 this makes many Americans[br]much less open to change 0:06:37.500,0:06:39.059 and taking good risks. 0:06:39.083,0:06:41.018 In China, by contrast, 0:06:41.042,0:06:44.768 people believe that the government[br]is going to keep problems from happening, 0:06:44.792,0:06:48.226 which might not always be what happens,[br]but people believe it. 0:06:48.250,0:06:50.351 They believe they can rely[br]on their families, 0:06:50.375,0:06:53.393 so that makes them more likely[br]to take certain risks. 0:06:53.417,0:06:55.018 Like buying Beijing real estate, 0:06:55.042,0:06:58.934 or like being more open about the fact[br]that they need to change direction, 0:06:58.958,0:07:02.833 and in fact, the pace of change in China[br]is absolutely amazing. 0:07:03.958,0:07:05.809 Second of all, 0:07:05.833,0:07:07.976 how much do you know about a situation, 0:07:08.000,0:07:09.875 how much are you willing to learn? 0:07:10.958,0:07:14.684 And are you willing to see things[br]even when it's not what you want? 0:07:14.708,0:07:17.601 So many of us are so unlikely 0:07:17.625,0:07:20.893 to pay attention to the things[br]that we just want to black out, 0:07:20.917,0:07:22.184 we don't like them. 0:07:22.208,0:07:25.958 We pay attention to what we want to see,[br]what we like, what we agree with. 0:07:27.125,0:07:29.559 But we have the opportunity[br]and the ability 0:07:29.583,0:07:32.184 to correct those blind spots. 0:07:32.208,0:07:35.476 I spend a lot of time[br]talking with people of all walks of life 0:07:35.500,0:07:38.518 about the gray rhinos in their life[br]and their attitudes. 0:07:38.542,0:07:40.101 And you might think 0:07:40.125,0:07:42.601 that the people[br]who are more afraid of risk, 0:07:42.625,0:07:44.309 who are more sensitive to them, 0:07:44.333,0:07:47.768 would be the ones[br]who would be less open to change. 0:07:47.792,0:07:49.809 But the opposite is actually true. 0:07:49.833,0:07:51.143 I've found that the people 0:07:51.167,0:07:53.643 who are wiling to recognize[br]the problems around them 0:07:53.667,0:07:55.018 and make plans 0:07:55.042,0:07:58.601 are the ones who are able[br]to tolerate more risk, good risk, 0:07:58.625,0:08:01.268 and deal with the bad risk. 0:08:01.292,0:08:04.268 And it's because as we seek information, 0:08:04.292,0:08:08.875 we increase our power to do something[br]about the things that we're afraid of. 0:08:09.708,0:08:11.809 And that brings me to my third point. 0:08:11.833,0:08:15.226 How much control do you feel that you have 0:08:15.250,0:08:17.208 over the gray rhinos in your life? 0:08:18.167,0:08:20.309 One of the reasons we don't act 0:08:20.333,0:08:23.101 is that we often feel too helpless. 0:08:23.125,0:08:26.059 Think of climate change,[br]it can feel so big, 0:08:26.083,0:08:30.101 that not a single one of us[br]could make a difference. 0:08:30.125,0:08:32.768 So some people go about life denying it. 0:08:32.792,0:08:35.976 Other people blame everyone[br]except themselves. 0:08:36.000,0:08:38.933 Like my friend who says[br]he's not ever going to give up his SUV 0:08:38.957,0:08:41.143 until they stop building[br]coal plants in China. 0:08:41.167,0:08:44.559 But we have an opportunity to change. 0:08:44.583,0:08:46.726 No two of us are the same. 0:08:46.750,0:08:51.643 Every single one of us has the opportunity[br]to change our attitudes, 0:08:51.667,0:08:54.393 our own and those of people around us. 0:08:54.417,0:08:57.643 So today, I want to invite all of you 0:08:57.667,0:09:02.351 to join me in helping to spark[br]an open and honest conversation 0:09:02.375,0:09:03.851 with the people around you, 0:09:03.875,0:09:07.226 about the gray rhinos in our world, 0:09:07.250,0:09:11.184 and be brutally honest[br]about how well we're dealing with them. 0:09:11.208,0:09:13.851 I hear so many times in the States, 0:09:13.875,0:09:16.559 "Well, of course we should[br]deal with obvious problems, 0:09:16.583,0:09:18.643 but if you don't see[br]what's in front of you, 0:09:18.667,0:09:20.809 you're either dumb or ignorant." 0:09:20.833,0:09:24.601 That's what they say,[br]and I could not disagree more. 0:09:24.625,0:09:27.309 If you don't see what's in front of you, 0:09:27.333,0:09:30.601 you're not dumb, you're not ignorant, 0:09:30.625,0:09:32.309 you're human. 0:09:32.333,0:09:37.559 And once we all recognize[br]that shared vulnerability, 0:09:37.583,0:09:41.976 that gives us the power to open our eyes, 0:09:42.000,0:09:43.934 to see what's in front of us 0:09:43.958,0:09:47.417 and to act before we get trampled. 0:09:49.208,0:09:52.500 (Applause)