Why We Fail To Predict The Future
The future is not a far-off point: it arrives daily
The emergence of new infectious diseases is unpredictable but evidence indicates it may become more frequent. In light of evidence from recent emerging infectious diseases such as Ebola and Zika, the likelihood of this risk has increased since 2015.
A lot of money and time is going to be spent on corporate risk registers in the year ahead. Following a crisis, regulators and managers naturally take steps to prevent a recurrence. There’s a danger of retrospective risk management: believing in and using a strategy that has been successful in the past but is no longer a relevant tactic in the present, never mind the future.
In military terms it’s called fighting the last war. A famous example is when France built a series of concrete fortifications along their border with Germany: the Maginot Line. What was a winning move in WWI didn’t help in WWII, when Germany flanked the Maginot and invaded from the North, from Belgium. A border that the French hadn’t fortified. The line has since become a metaphor for expensive efforts that offer a false sense of security.
It’s one thing to imagine a future scenario and an entirely different thing to preempt it. Pandemics have been top of national risk registers since the end of the nuclear threat, but that didn’t stop most of the western world failing to seal their borders in January 2020. In fact, amidst a global panic many threw out their carefully draw up pandemic response plans and did something entirely different instead.
This week I’ve been at a couple of events where we discussed horizon scanning.
Most executive teams will tell you they scan the horizon on a regular basis. I made a comment the other day that when you probe what horizon scanning means in practice it often equates to just reading the news and following Elon Musk’s Twitter feed. Helena Moore responded “I raise you a HBR subscription and a friend thats a futurist”.
Far from something that is only done randomly, horizon scanning is a structured process designed to capture, make sense of and assess the importance of emerging issues and trends that are often not very obvious today.
In an increasingly complex world organisations need to horizon scan to prepare for future disruption. By the time significant emerging disruptive risks are known, quantifiable and recorded on a risk register, it may be too late to respond effectively.
Weak Signals Getting Stronger
How do you look for non-obvious trends?
According to Vijay Govindarajan weak signals consist of emergent changes to technology, culture, markets, the economy, consumer tastes and behaviour, and demographics. Weak signals are hard to evaluate because they are incomplete, unsettled and unclear. “Planned opportunism” is his term for responding to an unpredictable future by paying attention to weak signals. Ultimately our organisations will succeed by exploring these weak signals — abandoning them as they fade or focussing investment when they get stronger.
What We Can Learn From Super Forecasters
Jean-Pierre Beugoms is the forecaster featured in Adam Grant’s book Think Again. He has an outstanding record in predicting the outcomes of elections. While regular pundits rated Donald Trump as a joke, with just a 6% chance of gaining the Republican nomination, Jean-Pierre gave him a 68% chance. How? By constantly challenging his own beliefs and biases.
As he says “I would advise people to question assumptions that are unsupported or weakly supported by the evidence. That is the best way to spot potential opportunities to set yourself apart from the crowd. You also need to become adept at evaluating evidence. I would also advise people not to trust their gut. Thinking with your gut is what pundits do and that is why they are so often wrong.”
Most of us don’t have the skills to become super forecasters, celebrated historians or futurists. So what can any of us do practically? I’d suggest:
- Create a circulatory system for new ideas and provocations
- Develop the capacity to prioritise, investigate, and act on those ideas
- Build an adaptive culture that embraces continual change
- Be prepared to constantly change your mind about what you think you know
No-one can predict the future but history shows us that it often turns out very different than we imagine. The more our organisations actively think about the future the easier it becomes to close the future gap and put yourself into that future.
And let’s remember the future is not a far-off point: it arrives daily. Our choice is whether to be an active participant in what it looks like or just let it relentlessly unfold around us.
Originally published at http://paulitaylor.com on June 18, 2021.