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Future methods

Prediction, Betting, & Forecasting

My scanning turned a media story recently about two presenters on the agriculture circuit who have been disagreeing about the future price of corn, making rival predictions, and backing up those predictions with a bet for $1000. I think this a microcosm of stupidity about the future. Yes, I’m invoking the s-word here.

One of these people will be right. One will be wrong. One will win. One will lose. And that’s exactly how NOT to look at the future. Too often I’ve seen organization leadership “make bets.” They roll the dice on what they believe will happen. When they’re wrong organizations collapse, people lose jobs, and assuredly investors lose money.

Prediction and betting are folly. No individual is prescient. It is the wrong example to set. Frankly, it smacks of the same arrogance that we saw in the last presidential campaign primaries when one candidate offered a $10,000 bet on a point of policy, labeling him as elitist and out of touch with mainstream America. It’s posturing, pointless, and doesn’t help the audiences they were in front of accomplish anything about understanding their future.

Over the last 5 years I’ve encountered one of the presenters, a “futurist.” After all, the only qualification to become a “futurist” in the US is to say you are one. That goes for me too. I’ve not been impressed with that fellow’s work. My respected colleagues in the futures field don’t predict. We forecast. We engage in useful foresight that changes with time and new information to help clients prepare and take action.

I can’t accurately predict commodity prices as to specific time and amounts. Neither can the two fellows who are making the bet. But what I can do is point up the key factors to observe, outline robust strategies to take, recommend a highly probably range in which a commodity might trade. Those pieces of information are much more useful to a listener than arguing over who’s going to win a bet.

Vigilant Leadership

The single most valuable asset I see in an organization is a habit of foresight coupled with contemplation and tied directly to action.
If I rank the organizations I consult on their effectiveness, those that do all three of these do best overall. They generate more profits, have better looking balance sheets, attract investment, or serve their stakeholders the best.
I like to call it
vigilant leadership.”
What’s involved?
Vigilant leadership engages as many individuals as possible in an organization, and certainly all of the directors and senior management, in a discipline of looking ahead. That means staying abreast of events, being advised of emerging issues, recognizing “weak signals” of shifting environments, having depth of knowledge in areas specific to the organization’s strategy, and focusing particularly on long term thinking about what will affect the organization over a decade-or-longer time frame.
This is extraordinarily difficult for most organizations to achieve. Clients of mine have difficulty with it. I think it’s for several reasons.
One is the lack of a major
commitment to foresight. For example, with some of my financial service clients an environmental scanning piece developed by a national trade organization is distributed to the board in advance of the annual planning retreat. When I ask about what foresight process they’re using that’s the answer I get. A start, but not nearly enough.
Another difficulty is the governance structure and
expectations. I don’t believe organizations ask enough from their directors. Every organization’s director should be expected to be not only up to speed on the industry market as well as geographical or industry or product or service niches. They should be accountable for depth of knowledge in the much broader and higher impact developments in the economy, consumer behavior, emerging competition, and geopolitical forces.
A third barrier is the lack of discipline, time, and process for
contemplation. Retreats are for contemplation. Their very label presupposes getting away to do some thinking. They are for discussion certainly. But most of all they should be an immersion away from one’s typical environment in order to gain perspective and spend time in thought.
I find thought is rare in most retreat settings. There are many reasons. One is the assumption that because the retreat is being held in a nice location with recreation opportunities then one should focus on those. Another is the presence, in too many settings, of spouse and family. Nice, but counterproductive largely. Another is a tendency to crowd agenda. One presentation after another. A need to sign off on strategy. A board meeting with a consent agenda. A race to complete work in order to have fun, socialize, or get to a meal.
Most of all retreats feature way
too much opinion expression and much too little contemplation.
This doesn’t mean that directors and senior management should be shut up in monastic cells to think. But it does mean that there should be time to gather one’s thoughts, form opinion, discuss deeply, and only then to reach consensus on decisions.
Fourth is
stamina. Vigilant leadership is a process, a journey. There is no letup. There is no downtime.
I’m not suggesting that all of an individual’s time away from an organization should be spent in foresight. Nor am I espousing huge amounts of force-fed reading. But I’ve found through the years as I’ve taught anticipatory skills to management, installed foresight systems in organizations, and consulted on strategy that the really good work that makes a successful organization happens in between all the other daily responsibilities in my clients’ lives.
When directors and senior management are introduced to
foresight techniques, integrated into a system that pushes appropriate amounts of information to decision-makers, and encouraged to contemplate on one’s own time, good things happen.
Image: susanvg, via Flickr CC license

Your Major is What?

A while back I observed that the most e-mailed story from the New York Times online edition was about the popularity of philosophy as a major at Rutgers and other universities. Philosophy majors and graduates doubled over the past five years. It’s a trend that is evident at other colleges and universities according to Winnie Hu, an education writer for the Times.
There are more colleges than ever before offering philosophy majors. In schools with well-known programs like UMass, Notre Dame, Pittsburgh, and Texas A&M the number of majors has doubled just like Rutgers.
The attraction? Surprisingly pragmatic. Students say the major is equips them with tools for success.
David Schrader, executive director of the American Philosophical Association says, “It’s a major that helps them become quick learners and gives them strong skills in writing, analysis and critical thinking.”
That gets my attention as a futurist and it’s a parallel with the courses I teach in executive education sessions that target leaders at large companies. It identifies two of the most common shortcomings I see in those executives:
1. The lack of perspective for the big picture. Myopic expertise and a lack of awareness of how major forces are affecting their own functions, teams, and organization is too often present.
2. An obsession with quick and often reckless problem solutions and especially fast action when confronted with a challenge. An emphasis on speed over contemplation is a bad practice. But I see it again and again in corporate America and, too often recently, in our political decision-making.
We can all use a better grounding in the principles from philosophy.
Philosophy programs have changed over last couple of decades. Today the major is less about old texts and more about cutting edge, interdisciplinary fields like cognitive science. It’s often followed as a double major by students planning on careers in the law, medicine, finance, and even investments.
Students say philosophy has a couple of other attractions. It helps them make sense of the big questions that face society like globalization, the environment, war, and technological adoption. Even more pragmatically, it is a field that helps them with a set of skills that can be applied in the range of uncertainty that faces many graduates.
Want to be more valuable to your organization, your colleagues, your family, yourself? Build skills that help you make excellent decisions in uncertainty.