Amazon becomes the Wal-Mart of the publishing industry, and other dystopias

Posted by Adam Gordon on Apr 14, 2009 in all, forecast filtering, Future Savvy, lifestyles & values, scenario planning, strategic foresight

There’s been a storm in the past few days over Amazon.com excluding “adult” books from its sales rankings. Among the almost 60,000 books affected was not just Erotica. Feminist books, Gay & Lesbian titles, and books in Health, Mind & Body, and Reproductive & Sexual Medicine also disappeared from the rankings

Amazon the new Wal-Mart? pic:Huffington Post

According to yesterday’s LA Times Amazon says the whole thing was a cataloging error. But when author Mark Probst had previously contacted Amazon for an explanation, he got this: “In consideration of our entire customer base, we exclude “adult” material from appearing in some searches and best seller lists.”

Aside: Everyone is trying to figure out what Twitter is good for, or how it will be used, and it has become clear that one application is to quickly aggregate mass protest, evidenced in the anti-Amazon outrage, see Twitter “Amazonfail.”

Author Maya Reynolds has been connecting the dots in the future of publishing, watching Amazon move via acquisitions such as Abe Books, Audible, BookFinder, BookSurge, Brilliance Audio, FillZ, GoJaba, Library Thing, Mobipocket and Shelfari.

She is among various industry watchers who claim, with fair evidence, that Amazon is following a “Wal-Mart” strategy – the well-documented essence of which is to gain enough retailer power to be able to pressure suppliers (telling them what to make or what to charge, or exacting special discounts) to achieve better retail prices and get more retailer power, in a reinforcing spiral which, inter alia, squeezes all the healthy mom-’n-pop-shop diversity and other balances of power out of the industry.

In a post of July 08 she paints the full dystopia scenario:
“1. First, the smaller presses, POD presses and e-publishers will disappear as Amazon’s margins squeeze them out of business. Amazon will help the process along by offering better terms to authors if they will use BookSurge’s POD press and Kindle’s e-book to publish. Even if authors don’t embrace Amazon initially, as their publishers go out of business, they will be forced to do so.
“2. Brick-and-mortar stores have two constraints which Amazon does not: (1) limited shelf space and (2) a limited geographic range. Bookstores carry books “on spec,” filling their shelves with stock they hope readers will seek. Amazon, on the other hand, has unlimited virtual shelf space and unlimited geographic reach. Amazon does not have to warehouse stock. They can wait until a book is actually ordered and the money is in hand before using a digital file and BookSurge to print the book. Because they cannot match the deep discounts Amazon offers, bricks-and-mortar bookstores–already under siege–will be squeezed out of existence.
“3. Like Wal-Mart, Amazon will continue to apply pressure on publishers to give more favorable terms. Wal-Mart’s suppliers used cheaper materials and out-sourced to cheaper overseas labor. As the publishing houses’ profit margins are squeezed, their cost-cutting efforts will take three directions: (1) Focus even more attention on signing best-selling authors whose work is guaranteed to sell; (2) Begin to pressure their mid-list authors to accept lower advances and lower royalty percentages; and (3) Sign fewer and fewer new authors because of the uncertainty and the expense of growing a new writer.

Where will they go?

“4. Mid-list authors and new authors, unable to either find a publisher or unwilling to accept the low royalties, will seek to self-publish. Where will they go? Since, by that time, most of the self-publishing houses will have gone out of business, they will go to Amazon’s BookSurge or to Amazon’s e-book division, Kindle. Amazon will welcome them.
“5. The next death on the food chain will be the publishers and agents themselves. First the mid-level publishers will die. Well-known agents and the larger houses will be protected for a period of time by their best-selling authors who are loyal to them. However, as those cash cows die off, so will the agents and larger houses. A new paradigm will emerge: Amazon as both publisher and retailer.
“6. Eventually Amazon will have so much power, they will be able to decide WHAT is worthy of being published. Welcome to the future of publishing.”

Is this the future of publishing? The logic of unregulated industry power suggests it is. But Future Savvy says response – regulation – is also likely. As with Microsoft and many before them, when Amazon gets too powerful, anti-trust regulators should be in business. But only if their hand is pushed. Articulate and persuasive dystopias such as Reynolds’ are the single most powerful mechanism by which the word is spread (spread it! forward it, tweet it!) so that enough consumers get to see and believe threatening future outcomes early enough, and pressure regulators to act.

The luxury good sector gets humble about forecasting – but knows what follows “bling”

Posted by Adam Gordon on Mar 30, 2009 in 2015, all, economy & finance, leadership, lifestyles & values, management, managing uncertainty, social change, strategic foresight, trend tracking

The International Herald Tribune (New York Times Global Edition / Reuters Business) last week ran an interesting foresight story headlined ‘Crisis complicates forecasting by luxury brands,’ reporting from the International Herald Tribune’s eighth conference on luxury in New Delhi. The gist was that although most of the famous brands continue to do well despite the recession, luxury sector executives are very uncertain about the future.

Christian Blanckaert, Executive Vice President at Hermès International was quoted as saying: “We have absolutely no visibility into 2009!”

On the one hand, fair enough. This economic downturn is steeper than previous down cycles, and the basic viability of the financial sector has been tested. Access to credit is normally easier in a recession, but in this one it is not. All of which makes luxury spending harder to predict.

No doubt the most unlikely prediction of all would have been that Hermès, Burberry, LVMH, Moët Hennessy, Louis Vuitton, and PPR (Gucci , Yves Saint Laurent) have all recently reported better-than-expected results.

Nevertheless luxury industry leaders have declined to provide investors and analysts with any official outlook. What’s curious, from an industry foresight point of view, is how executives such as Blanckaert thought they really had more “visibility” into any previous year, or that they will somehow gain it again when the financial crisis is over. They will not. The world will continue to surprise them and us. What they will gain, certainly, is a greater likelihood that the standard business-as-usual future assumptions they make will not be upset by reality.

Meanwhile, judging by the conference, the luxury goods industry has a very decent grip on current social and moral trends, and clear insight into the bigger picture of change in its industry over the next five to ten years. As they know from before, what happens in a recession is that luxury goes out of fashion. Conspicuous consumption wanes, or retreats further behind secluded walls. This is a basic pendulum swing that tracks the economy (witness how the early 1990s recession stimulated a return to “values” era after the “me, me, me” 1980s.)

Sustainable luxury

So we are again in a swing to modesty. But we also know that each swing of the pendulum also carries with it the specific issues of its time. Current key issues for consumers in this segment are sustainability, global warming, business ethics, and globalization (or fear thereof).

Therefore the luxury brands will be looking for ways of making, transporting, and displaying goods in an energy-efficient and socially conscious way, including a renewed emphasis on local artisans and traditional craftsmanship that speaks sustainability in both natural and human resources. This will be the basis of the “sustainable luxury,” positioning that the famous houses will define and compete in. Fabulous and renewable  – now there’s something you can charge top dollar for.

Forecasting the future has its own archeology, and here is a good guide to it

Posted by Adam Gordon on Mar 10, 2009 in all, failed predictions, foresight tools & methods, history, Perils of Prediction, politics of the future, strategic foresight

One of the more alarming mistakes in foresight work is that forecasters don’t see themselves as operating within their own world view, and the preconceptions and priorities of their own time. In fact the very idea of foresight – why do it and how to do it – has changed quite markedly through human history. Knowledge of this historiography is of course important in assessing current forecasts. This is why Oona Strathern’s A Brief History of the Future (Robinson, London, 2007) is an important book.

One doesn’t start reading a “Brief History of” book in a series that includes A Brief History of the Birth of the Nazis and A Brief History of British Kings & Queens, without a certain trepidation. But, in fact, A Brief History of the Future is well-considered and well-written summing up of the characters and concerns that have shaped and continue to shape the future studies field.

Strathern, is a British journalist-turned-futurist, based in Vienna. One of the key attributes she brings is a journalist’s (and sub-editor’s) critical “don’t-bullshit-me” faculties, which is welcome in a field that is often short on common sense.

The book is hardly brief (at 300 pages) so there’s no sense that it’s a potted history. And it’s not compromised by what one – alas – expects of this kind of setup: pandering to all characters in positive or equal terms. In fact a key value of the book is its clear-headed and plucky judgment of who the key figures are (and who are not) and what their contributions have each been (vs what they might have thought they were). It is also unusually even-handed in balancing US and European inputs.

The book follows the obvious structure, starting with the oracles of Ancient Greece, Plato, moving through Leonardo de Vinci, and Thomas Malthus and so on through to the 19th century (Jules Verne, Karl Marx, etc.) and on to the present. In this Strathern argues for and operates with a wide definition of futures work – including in the dreamers, social reformers, and sci-fi writers in addition the more formal analysts and planners.

20th Century Weltanschauung
The book really hits its straps in the 20th century – in discussions of Aldous Huxley, H.G. Wells, George Orwell, Arthur C. Clarke, Herman Kahn, Buckminster Fuller, Alvin Toffler, Isaac Asimov, Margaret Mead and many lesser known figures. What is most interesting here is how the links between foresight approaches and the evolving broader existential and political “weltanschauung” of the century is knitted together, inserting “futurology” into the 20th century world of ideas at each point.

Although the book deals with institutions of foresight pretty well, the one angle I missed was the development of foresight education over the past 40 years. Part or full university degrees in foresight methods are an important part of the evolution of the field. Much has been learned in the debates over what and how and where to teach it. Ironically, the book – as intelligent a summary of the “future studies” field as you will find – would be an ideal text for an introductory course in such a curriculum.

Sir Fred Goodwin and the Imperative for Looking Long and Rewarding Longer

Posted by Adam Gordon on Feb 26, 2009 in 2025, all, decision-making, economy & finance, forecast filtering, leadership, lifestyles & values, management, policy, politics of the future, risk management, social change

Publication of the Institute for the Future’s “Map of Future Forces Affecting Sustainability” on the same day that it is revealed that Sir Fred Goodwin (50) of failed & baled Royal Bank of Scotland (RBS) will get a £693,000 (about $1,000,000) a year payment for the rest of his life, gets me thinking about short-termism and its entrenchment.

The IFTF’s full map is available for download here.  Quick aside: these maps, putting complex forces into visuals, have defined IFTF’s public (and client, one presumes) communications for over five years, and have raised the bar of excellence in the foresight communications. The company has produced many such outstanding maps, some publicly available.

The new map and Sir Fred-gate are unrelated of course. But here was the connection for me: The IFTF map lists six “Key Driving Forces” (2007-2017) in the area of sustainability, and the first is:
“An Imperative for Looking Long: The 21st century will test our ability to grasp the future impacts of present choices, but even as we struggle to incorporate future knowledge into our day-to-day decisions, we’re tuning up our bodies and minds and even our cultural frameworks for a much longer view.”

My question is, “really?” Is the long view really a driver – something that will drive change and shape the future? Or do we hope it is. Are we trying to talk it into being?

No question that the long-term view is crucial. Solving just about any social, technological, or environmental problem requires sustained long-term action. And everyone who works in foresight keeps evangelizing long-termism. But, in fact, what we have in industry and government is rampant short-termism and there is no indication this will change, despite the crisis and many heartfelt calls.

Linking big to long

The problem with Sir Goodwin’s package (in career and in retirement) is that the reward numbers were based on short-term company returns. “Hey, we made lots of money this year, so you get a big bonus, and you get a big bonus,” etc. But a few years down the line  – in the long term – it turns out that no bonuses were valid (if a bonus is, truly, a reward for success).

Put it another way: in finance, as in other aspects of society, technology, and the environment, we don’t know if we’ve succeeded or failed until the long-term numbers are in. Few would have a problem with handsome rewards for a valuable job well done, but those rewards must surely be delayed, and delayed, until we are in command of the long view of the performance.

Easy in theory, hard in practice. Perhaps impossible in practice when most politicians and legislators are themselves on a short 3-7 year cycle, like CEOs. I have some inkling from the IFTF map that the thinking is that life-extending technologies will improve to the point where people will really see themselves in for the long haul, and so adopt a longer perspective on benefits and rewards.

Time on the clock

Perhaps. But, life-technologies aside, plenty of decision-makers – Goodwin included – still have a lot of time left on the clock and that doesn’t appear to stop them chasing and cashing in short-term incentives at the expense of the future. Or legislators (and the public who votes them in) structuring performance rating on our immediate perception of their performance.

What we have, and what we have increasingly had (the trend) over the past few decades, is systemic short-termism. Winning in the next annual report or the next election is what what leaders’ rewards are based on. Incentives for politicians or business leaders or even scientists or engineers to make a better world for 2025 or 2050 are negligable.

Until there is reason to anticipate that this fundamental underlying short-term incentive structure and mentality changes (that is – convince me – who will change it and how?) the future savvy perspective must say that the “long-term imperative” remains a nice sound-bite, but not a material driver of anything.

Design and future studies: siblings after all in the quest for valuable innovations

Posted by Adam Gordon on Feb 12, 2009 in all, design, emerging technologies, innovation, lifestyles & values, managing uncertainty, systems dynamics, technology change

It’s an auspicious time for those of us long convinced that design and future studies are fields with significant overlap whose coordination is helpful in addressing both social and commercial problems and/or future opportunities.

Conference: March 19-21

Tim Brown of IDEO, the the industrial design firm, recently published a Harvard Business Review piece Design Thinking – investigating designer-methods in business innovation. At Davos last month there was a “Global Agenda Council/ Design,” featuring Newsweek’s Bruce Nussbaum and built-environment design firm ARUP’s head of foresight, Chris Leubkeman. (The general agenda may be found here.) Next month, the Association of Professional Futurists are having a “Futures by Design”  conference in association with The Art Center College of Design in Pasadena, CA.

And so on. I’m going to be blogging more about this. But for now I wanted to put out a note-to-self I wrote on the issue about five years ago, trying to briefly define how the fields relate to each other, and what the crossover is. Here goes:

The tools of design and planning dovetail closely with those of industry foresight. The overlap and interaction between these two disciplines is not commonly understood, and so the methods and process insights from design professions that could augment the range of strategic foresight tools is often ignored.

1. Beyond aesthetics
Sunday supplements and glossy magazines often use “design” to mean style and fashion. While aesthetics is important, good design means much more than how products appear. It is about creating better processes, interactions and solutions for human benefit. This often involves experimenting with new technologies, envisaging possibilities under conditions of uncertainty and complexity, exploring and comparing alternatives, and determining the best and most durable solution for the long term.

2. Future focus
Whether planning a building, or redesigning a product, or innovating a process, the designer is called on to anticipate a solution that caters to future needs ­ often responding to futures issues, for example environmental-sustainability pressures and changing social values. In other words, design methods, like futures tools in general, form the bridge between current products, systems and practices and what it will be required and desired in the future.

In achieving this future focus, designers, like good “futurists,” must use techniques of imagination, creativity and intuition to generate and evaluate future outcomes. Like futures professionals, designers are called on to practice original thinking, imagine the world differently and see possibilities that others don’t. They are required to take risks, negotiate change and challenge the status quo under conditions of ambiguity and uncertainty. And like good foresight work, design succeeds only if it finds the right tradeoffs between technology possibilities, economic realities, and social needs.

3. Rendering
More than merely anticipating the future, designers and planners are practical agents of visual imagination, creating the blueprints for the objects and experiences of tomorrow. From product creation to urban renewal, designers and planners have tools and experience translating abstract future concepts and ideals into visible or tangible form ­- “making the invisible visible.” Through this rendering function they are primary agents in articulating the future, and therefore in helping us see and negotiate (or refuse) the transition.

4. Systemic innovation
Design is about systems and practices as much as products: better-designed systems improve utility, cut costs, and improve resource use. Designers play a key role in the organizational innovation process as a whole, including the development of integrated product and services, or inventing new types of value chains, alliances, and collaborations.

In sum, much of what foresight professionals are trying to do every day is already being done by design professions. Their methods and process insights should be integrated into the foresight field as a whole.

Hello Davos: all crises of the present are foresight failures of the past

Posted by Adam Gordon on Jan 30, 2009 in all, decision-making, failed predictions, forecast filtering, Future Savvy, leadership, managing uncertainty, policy, risk management, strategic foresight

All crises of the present can be viewed as a failure of foresight or planning at some previous point, and the current global economic crisis is no different.

The mood is justly sombre at the World Economic Forum’s Davos meeting this year, as grim-faced world leaders mull over the dismal state of the global economy and how to fix it. This is in marked contrast to recent years, when the top executives were warmly congratulating themselves on the general state of things.

In one sense this is perfectly understandable. The crisis is upon us and leaders should be directly and practically involved in tackling it. On another level it’s profoundly disturbing, because world leaders and senior managers should be doing more than merely responding to situations. When crises occur, crisis management becomes part of a leader’s job, but their real job is thinking ahead effectively to avoid crises and, on the positive side, develop opportunities.

Put another way: the heads of a companies or countries – Davos-level people – are tasked far beyond effective daily management. They are tasked, fundamentally, with negotiating the VUCA (volatile, uncertain, complex, ambiguous) world on behalf of the rest of us. If not them, then who?

This requires foresight and vision. In this sense, many who are at Davos this week are responsible for the current crisis. They failed to foresee it, in fact they generally endorsed the growth of complex financial instruments, the shadow banking system, and private equity growth –- much of which bypassed SEC or equivalent regulation, and which is now seen to be the root cause of the meltdown.

In fact much of the “new finance” system was thought to spread and therefore actually lower risk. Turns out that was a poor view of the future. In fact the present situation as a whole is the result of key decision-makers operating on a poor view of future. As a group, their mental model was not open to bad outcomes, or even just alternative outcomes to what was commonly expected.

Could we have thunk it?

Their response might be: “nobody can predict the future!” “Easy to say after the event!” This is true. But it’s common knowledge that there were those who foresaw the mess — The Times identified at least 10. As Davos attendees might now be forced to agree, some forecasts are clearly better than others.

This is where executive leaders can learn from the foresight field and particularly the history of failed predictions. Everyone relies on predictions for their guide to the future – nobody can be an expert in every field. And there’s never a shortage of them – they are frequently published in the media, offered by consultancies and think tanks, and are a key part of Davos.

While getting a prediction is easy, the key leadership skill is to be able to tell a good one from a bad one: that’s what turns a forecast into a strategic resource. That is what leads to better decisions, better plans, and better actions.

Can one do that? Can one critically assess a particular or consensus-held view of the future, to identify its strengths and weaknesses? Absolutely yes. Among the tests one can run on a prediction are:

•    assessing motivation – who is speaking and what their agenda might be, particularly if they have an interest in maintaining a current system or shaping the emergence of a new one
•    determining whether the tools used are appropriate to the level and type of uncertainty faced. High-uncertainty situations and long-term views require different approaches to standard modeling
•    questioning consensus mental-models and forcing consideration of alternative outcomes. All foresight is swayed by “zeitgeist” – spirit of the times – and good forecasts swim against this tide.

These are just a few among the many forecast tests one can run, as detailed in Future Savvy.  But even if Davos attendees had been applying just these three in previous years, their foresight would have been greatly improved. It won’t help with this crisis, but it might forestall the next.

* This article, authored by Adam Gordon, was first edited and published by Bnet.co.uk

A future of computing scenario where digital meets the stone age

Posted by Adam Gordon on Jan 13, 2009 in 2015, 2025, all, emerging technologies, failed predictions, forecast filtering, innovation, Perils of Prediction, scenario planning, strategic foresight, technology change

Microsoft - Computer Electronics Show 2009

Product prototype communication is a close cousin of scenario building. Typically the company creates their product or service in action, in the future, being used by happy customers, their “preferred future” scenario. Prototype communication doesn’t typically build in alternative scenarios, the litmus test of strategy-based scenario work. It’s more a kite-flying exercise, designed to put out a future-oriented message to stakeholders and the public, garner broad feedback, and (if you’re powerful like Microsoft) put up “this-is-the-future-of-the-industry” markers.

Nevertheless, with the caveat that they are one among many plausible outcomes, product showcase scenarios can be an eye-opening guide to what’s actually possible and what the future will be like.

A newly released Microsoft “Future of Computing” video, showcased at CES 2009 in Las Vegas in the past few days, is an example. The 10-minute piece, presented by Janet Galore, Program Manger: Strategic Prototyping, takes us through a scenario of interactive education in the future (when, exactly, is not said but the implication is it’s not too far off) showing how participants would find, use, and share information across devices and across platforms.

What we see is a tablet PC that can communicate seamlessly with other electronics and interact with Web info on the fly. Okay nothing new there. What’s interesting is how it’s all held together by surface computing, a smart desk with a screen, which allows information to be viewed in the process of collaboration, sharing, and filing.  In some futurist fantasies it is thought that communication is ideally invisible (my phone e-handshakes your phone without me doing anything, etc.) But actually humans mostly seem to prefer to see what’s happening, and to have the choice to interact with what is happening while it’s happening – not least so they know what machines have done and don’t have to pull their hair out before they find their precious work buried four subdirectories into the Temp folder… sheesh. But I digress.

The scenario focuses on organizing and sharing multiple inputs, therein making a pretty clear statement about the future: what will be really valuable is not access to information anywhere, anytime (an assumed, table-stakes factor), but a way to share and collaborate with the information in an productive way. It refreshingly assumes that whiz-bang graphics – they are there too – are the easy stuff, but that collaboration and teamwork are the hard things to get right, and the truly valuable service given the chaos of billions of voices and trillions of data objects that pertain in any human-work future.

The other real strength of the prototype and related scenario is its close attention to natural (or, at least, strongly socialized, conventional, classic) human ways of doing things, which are slow to change, and therefore will change slowly. The smart desk is something one can really see oneself sitting around, because this is what we already do. Also this future of computing envisages no stylus, no mouse, no magic wand to master. Rather, we move digital stuff around the desk with our hands. We point to it and we shift it. That is, digital capability accommodates and interlaces with Stone Age human and organizational patterns. That’s why this view of the future is persuasive.

Credit crunch: the foresight was there, the problem was elsewhere

Posted by Adam Gordon on Dec 15, 2008 in all, decision-making, failed predictions, forecast filtering, Future Savvy, managing uncertainty, Perils of Prediction, scenario planning, strategic foresight

One of the questions I’m asked a lot is whether Future Savvy would have helped to predict the credit crunch. My response, as in this INSEAD interview, has been that the book gives readers the tools to judge the merits of predictions, so wouldn’t have directly helped predict the financial crisis, but it would have been a key resource in drawing attention to the poor view of the future that bankers and regulators were acting on.

In many ways, focusing on whether “this” or “that” is predicted, or not predicted, is to put the cart before the horse. The horse is the adequacy of our approach to anticipating outcomes and the quality of our foresight as a whole. When this is good, the cart – not missing important changes – will follow.

Credit: http://www.lewrockwell.com/blog

In this, it’s important to realize that many did predict the financial crisis (as many predicted 9/11 in various ways). Sticking with the financial crunch for now: it has generally been portrayed it as a “why-didn’t-anyone-see-it-coming” event. It wasn’t. Hats off to The Times for their October 12 piece: “10 People Who Predicted the Financial Meltdown.”(Summary here). Allowing for a fairly loose definition of “predicted,” the article shows that among those who foresaw the crunch were: Vince Cable, deputy leader of the Liberal Democrats (2003); US congressman Ron Paul (2003); Stephen Roach, senior executive at Morgan Stanley (2004); Christopher Wood – chief strategist of a broking firm in the Asia-Pacific Market (2005); and Nouriel Roubini, economics professor at NYU (2006)… and there were many others.

A different problem

So this reframes the problem entirely. It’s not that the predictions were not there. It was that not enough people believed them and, particularly, important decision-makers didn’t believe them or didn’t have the institutional capacity to respond. So there are two halves to the problem: the ability to see the full spectrum of what may happen, including unexpected outcomes; and the ability to act on what we see. Quality in foresight work – the raison d’etre of Future Savvy – makes it possible to see more outcomes more clearly, and to act with more confidence in choosing what to prepare for. (In the real world we can’t prepare for every outcome.)

There was a good letter published in the FT from eminent futurist Peter Schwartz on December 2, which describes this very well. It shows predictions for what they are (one-horse scenarios), and how decision-makers are typically bound into inaction or wrong action not only by working on the basis of a wrong prediction, but by the predictive mindset itself. This mindset – the habit or culture of picking “one right answer” in the face of a complex situation with many competing outcomes, prematurely closes alternatives and leaves us open to surprise. As Schwartz says, as scenario planners have always said (and he was one of the people who defined the field in the first place), a compelling set of alternative future scenarios encourages decision-makers to recognize unlikely and unpopular outcomes, along with expected outcomes, and therefore to be able to respond earlier and more effectively whatever happens.

Scenarios also contribute to the “act” side of the problem. In a well-done set for the banking industry, a financial-meltdown scenario would at least have been in play, institutionalizing the consideration of less unlikely, less popular outcomes in company and government forums, forcing serious consideration of necessary strategies and contingencies, and therein creating the ability to act early and effectively without having predicted the crisis.

The letter is well worth quoting in full:

Sir, The real question regarding the financial crisis is not, as the Queen asked: “Why did nobody see this coming?” In fact, any number of thoughtful people in academia, politics and business had been compiling the data and sounding warnings for several years.
The question we should be asking is: “Why didn’t decision-makers believe that a global financial meltdown was increasingly likely and then act on that belief?” Or, to put it another way: “What would it take to make decision-makers both believe and act?”

The problem is that decision-makers believe that they are forced to pick one right answer: the most likely scenario. Their approach to decision-making does not afford them the opportunity to consider apparently low probability but highly consequential scenarios. The answer, therefore, to the “believe” half of the question is a decision-making process that considers several scenarios: compelling stories about alternative futures that incorporate the analysis of “outliers” and describe three or four plausible paths forward.
Good scenarios force decision-makers to challenge their own assumptions and reconsider what is possible. As a result, they can take seriously those scenarios that seemed less likely at first, but whose plausibility increases over time.

The second part of the question – “What would it take to act?” – is much harder to address. Suppose that Ben Bernanke or Hank Paulson had come to believe a year or two ago that the house of cards was about to collapse and trigger cascading, global failures. What would they have done, given the realities of the complex interconnected systems at the heart of the problem? Perhaps if they had good scenarios with appropriate indicators to start with, they could have rehearsed different strategies and contingencies. Importantly, these decision-makers could have used these scenarios to persuade others on all sides of the issue also to recognise the complexity of the impending crisis in a more timely way. It’s never easy to convince everyone around you that the game they have been playing to their great benefit is about to change. But with a shared recognition of the magnitude of the risks and the ways they might unfold, they could have acted far earlier to prevent some of the dire consequences that have occurred, let alone what is to come.

The Wheel Turns on the Same Old Future for Drug Policy

Posted by Adam Gordon on Nov 20, 2008 in all, failed predictions, foresight tools & methods, Future Savvy, lifestyles & values, policy, social change, systems dynamics

The foresight news story of the day is undoubtedly the breakthroughs in stem cell use in facilitating human organ donation. Instantly one can add decades to the human lifespan in places where this class of treatments will be available and affordable. But that’s a topic for another time. What I’ve been mulling over is a Columbian government media tour in the UK, aimed at drawing middle class “recreational” drug consumers’ attention to the environmental cost of drug production, particularly cocaine. As reported in the Guardian yesterday (November 19), Columbian VP, Santos Calderón told a police conference that 300,000 hectares destroyed each year in Columbia for coca plant, that is, 4sq meters of rainforest  for every gram of cocaine produced. (Savvy says: what’s the validity of these numbers and who do they favor? Place a question mark there.) But it’s probably safe to assume the profit motive behind drug production overrides Green sensitivities, and the environmental cost is severe.

The environmental pitch is a new salvo in the old “war on drugs,” which has been waged backwards and forwards, over decades now, without being won. It’s worth stopping to think why it has not been won, because it’s a salutory lesson in thinking about the future. It has nothing to do with the morals of “pushers” or willpower of “addicts” or the “the youth of today.” It is perfectly explained by the reinforcing loop (aka viscious/virtuous cycle) that dominates the drug-prevention system. This can be diagrammed as follows:

Alternatively the identical idea may be represented as a “fixes that fail” archetype, as defined in “The Fifth Discipline Fieldbook” (Peter Senge et al, Doubleday, 1994, p125).

For more on systems thinking see The Systems Dynamics Society. The role of systems thinking in improving our understanding of change (or non-change) is also the topic of Chapter 8 of Future Savvy.

So, yes, these are simple charts. We could make them more complex by filling in details of all agents and institutions at work in drug supply, demand, and prevention – but this would only elaborate, not alter the logic of the system. Either way, the chart allows us to see the wood for the trees, which is that drugs and their prevention are in a reinforcing loop. While it appears that preventive laws and their enforcement will lower drug use, in fact law enforcement constrains availability, pushing up the price, which makes production more attractive, which creates incentives to farm (incl, in rainforests), which raises supply, which leads to drug pushing (marketing by another name), which leads to drug trial, usage and addiction, therefore social concern, and therein renewed pressure for stricter legislation and crackdown, which sends the loop round once again. (There are many side effects of this main loop, including increased street crime – funding drug habits; the creation and enrichment of gangs and warlords; and so on.)

Scratching doesn’t help

Nobody in their right mind wants this to happen. But even a kindergarden child can see that policing and jailing, like a good scratch, feels good in the short term but just drives the wheel of the problem in the long term. What are the alternatives? From time to time pressure is brought to bear on production, for example, trying to obliterate coca or poppy fields, or disrupt supply chains. But this is also hopeless because as long as there is a good price to be had, the systemic reality is that drugs will be grown, produced, and shipped. What shows great promise is tackling price. The legalization lobby is all about capping price by making drugs legal, supervised, available, and free (or low-price), removing the superprofits from the industry and thereby blunting the primary interest of drug bosses and warlords. (This is what happened when Prohibition was repealed).

From a systemically informed viewpoint, only a solution that changes the system (interrupts the reinforcing cycle) can change the future. In other words nothing significant will occur in the future until the system changes, and removing drug barons’ price interest is the only way to do it. Until this happens the savvy forecast must be: no change.

Educating consumers

But the public is not ready for such policies. So we are left with the holding pattern we are in. And this includes exhorting the consumer, as Vice-President Calderón is doing. (The same story and interview was featured earlier this week on Radio 4′s “Today” Show.) He’s targeting the middle class, occasional, and recreational drug users who, he says, otherwise recycle, and compost, and “drive a hybrid” and buy fair trade coffee, and so on, and so should be desist from drug use because of it’s environmental impact.) This is not the first time that consumers have been “educated” – school and public education programs consistently target, inform, and discourage consumers and would-be consumers (including, of course, in the laughable “Just Say No” campaign.) All good or at least harmless work, in a good cause.

Into this Calderón has added a new-to-the-industry category of demotivator – the environment. Sure, this should work in giving middle-class consumers pause. But if environmentally sensitive cocaine customers are a big part of the market — and it’s hard to tell if they really are — expect producers to just respond with Green reassurance, real or fake: “No trees were ploughed under in the creation of your snort.”

“Future Savvy” prescribed for Masters Program in Strategic Foresight

Posted by Adam Gordon on Nov 4, 2008 in 2025, all, forecast filtering, foresight tools & methods, Future Savvy, horizon scanning, managing uncertainty, strategic foresight

My aim for this blog is not particularly to champion success stories for Future Savvy. I’m happy to let the book talk for itself. I’d prefer to look at forecasts and foresight work out there and think about how well it is working, and/or who it may be working for. However it’s nice to be able to report, inter alia, that the book has been quickly picked up and prescribed as a required resource in the Masters Program in Strategic Foresight, at the School of Global Leadership & Entrepreneurship, Regent University (VA).

Future Savvy is intended to be a book for business and policy professionals, not academics. But it does speak to students and scholars who need to assess and evaluate foresight work. In any event, professors Jay Gary and Dennis Walters have included it alongside works by Wendel Bell, Jerome Glenn, and Ted Gordon (no relation) — household names in the foresight field — so the comparison is of course very happily accepted.

The following is from the course outline. I’ve included the full bibliography, which is in itself a valuable collection of sources in the futures field, and merits attention all the way down the list.

Course Description:
Surveys traditional forecasting theory and methods. After a consideration of forecasting in general, students learn how to conduct research using both qualitative (secondary sources, interviews and questionnaires) and quantitative (data analysis, numerical forecasting and trend decomposition). They also apply critical thinking skills to existing forecasts. [Learning objectives:] 1. Managing: understand the principles and applications of operational forecasting within organizations. 2. Assessing: decide when to use statistical or judgmental methods in strategic forecasting, and how to combine foresight methods to generate 10 to 20 year outlooks. 3. Evaluating: gather information in a specific domain that can be used to forecast baseline as well as alternative futures. 4. Researching: construct a long-term strategic forecast for a client organization that draws upon both quantitative and qualitative sources.

Required Resources
* Bell, Wendell. 1996. Foundations of futures studies: History, purposes, and knowledge. (Human Science for a New Era), vol. 1. New Brunswick, NJ: Transaction. ISBN: 0765805391
* Carlberg, C. G. (2005). Excel sales forecasting for dummies. Hoboken, NJ: Wiley. ISBN: 0764575937
* Glenn, J. C., and Gordon, T. J. Futures Research Methodology V2.0 CD-ROM American Council for the UNU. ISBN: 097220511X
[This item is available through http://www.acunu.org/millennium/FRM-v2.html]
* Gordon, A. (2009). Future Savvy: Identifying trends to make better decisions, manage uncertainty, and profit from change. New York: American Management Association. ISBN: 0-8144-0912-1
* Jain, C. L. ed. (2001). Practical guide to business forecasting. Flushing, NY: Graceway. ISBN: 092126758

Recommended and supplemental resources:
*  Coates , Joseph F 2025, John B. Mahaffie, and Andy Hines. 2025: Scenarios of US and Global Society Reshaped by Science and Technology. Oak Hill Press. ISBN: 1886939098, also available in .pdf files via http://www.josephcoates.com/2025_PDF.html
* Armstrong, J. S. (1985). Long-range forecasting: From crystal ball to computer (2nd ed.). New York: Wiley. ISBN: 0471823600, also available in .pdf files via http://www.forecastingprinciples.com/Long-Range%20Forecasting/contents.html
* Armstrong, J. Scott. 2001. Principles of Forecasting . Kluwer. ISBN: 0792374010.
* Caplow, T., Hicks, L., & Wattenberg, B. J. (2001). The first measured century: An illustrated guide to trends in America , 1900-2000 . Washington , DC : AEI Press. Download chapters at: http://www.pbs.org/fmc/book.htm
* Dawes, R. M. (1979). The robust beauty of improper linear models in decision making. American Psychologist, 34, 571-582.
* Duberley, J., & Johnson, P. (2000). Understanding management research: An introduction to epistemology. Thousand Oaks, CA: Sage.
* Einhorn, H.J. (1986). Accepting error to make less error. Journal of Personality Assessment, 50, 387-395.
* Fischoff, B. (1994). What forecasts (seem to) mean. International Journal of Forecasting, 10, 387-403.
* Gawiser, Sheldon R., and G. Evans Witt. 1994. A Journalist’s Guide to Public Opinion Polls . Praeger. ISBN: 0275949893.
* Gillham, Bill. 2000. The Research Interview. Continuum International. ISBN: 082644797X.
* Hetman, F. (1969). Le Langage de la prévision, the language of forecasting: With a French-English-German vocabulary. Paris: S.ÉD.ÉI.S. http://www.cnam.fr/lipsor/eng/data/langageprevision.pdf
* Jantsch, E. (1967). Technological forecasting in perspective. Paris: OECD. http://www.cnam.fr/lipsor/recherche/laboratoire/data/prevtech_en_final.pdf
* Makridakis, S. G., Wheelwright, S. C., & Hyndman, R. J. (1998). Forecasting: Methods and applications (3rd ed.). New York: John Wiley & Sons.
* Molitor, G. T. (2003). The power to change the world: The art of forecasting. Potomac, MD: Public Policy Forecasting.
* Moore, D. A., Kurtzberg, T., Fox, C. R., & Bazerman, M. H. (1999). Positive illusions and forecasting errors in mutual fund investment decisions. Organizational Behavior & Human Decision Processes, 79, 95-114.
* Orrell, D. (2007). The future of everything: The science of prediction. New York, NY: Thunder’s Mouth.
* Rescher, N. 1998. Predicting the future: An introduction to the theory of forecasting. Albany: SUNY Press. ISBN: 0-7914-3553-9
* Salant, Priscilla, and Don A. Dillman. 1994. How to Conduct Your Own Survey . Wiley. ISBN: 0471012734.
* Seidensticker, R. B. (2005). Future hype: The myths of technology change. San Francisco, CA: Berrett-Koehler.
* Schnaars, S. P. (1989). Megamistakes: Forecasting and the myth of rapid technological change. New York: Free Press
* Sherden, William A. (1998). The fortune sellers: The big business of buying and selling predictions. New York: John Wiley.
* Wood, G. (1992). Predicting outcomes: Sports and Stocks. Journal of Gambling Studies, 8, 201-222.

Issues in legacy systems: why vinyl is still here, and similar tunes

Posted by Adam Gordon on Oct 8, 2008 in 2025, all, emerging technologies, forecast filtering, foresight tools & methods, Future Savvy, horizon scanning, innovation, lifestyles & values, Perils of Prediction, social change, strategic foresight, systems dynamics, technology change

My attention was struck by an advertisement in The Times on October 1, 2008 (on a plane to NY – for better or worse this paper not a routine part of my daily diet) that offered a “LP2CD” machine that transfers vinyl records to CD directly.

This is the item:

There’s nothing new about this of course – the product has been around for a while, and ways to take vinyl and digitize it have been offered since the CD became the music industry standard in the mid-1980s. What’s interesting is that it is still being offered in 2008, more than 20 years after the technology transition. And still being bought, despite a sticker price of gpb 299 (nearly $600. In fact, this is the special newspaper-tie-in deal price.) The producers and marketers have, no doubt, done their homework: there are still enough people out there with vinyl records to justify a product and a campaign, including big newspaper spots that don’t come cheap.

What does this tell us about the future, and about predictions? It illustrates a key principle in thinking circumspectly and more accurately about the future. Legacy investments and legacy situations are a reality. They often represent a significant slice of daily practice or market share, well beyond the time when things have, officially, moved on. For all practical purposes, in any future the past continues to exist for a long time.

A slow and measured exit
This is common sense. But often missed by breathless techo-forecasters whose eyes are fixed on the next new thing. The implication of many forecasts is, when a new technology emerges into the market (which often takes longer than expected) that is also when previous solutions fall away. Not so. Yes, sometimes a new product is clearly advantageous, and adoption is rapid and pervasive. But when there are real investments in prior systems and technologies, these typically work their way out of people’s lives slowly, often over generations. The transition takes longer than we think it will.

While they are still part of the picture, legacy systems work against change (“This is working fine for me, why should I shift?” or “I’ve invested heavily in this, I can’t afford to shift”). On the other hand, as evidenced by the LP2CD in 2008, opportunities in the legacy system, or in facilitating a transition to the new system, may exist and be significatn long after everyone’s attention has moved on.

There are legacies in all kinds of products and services. A case that is currently pertinent, as discussed in Future Savvy, is the existence of deep legacies in the automobile industry and gasoline-petroleum supply chain. Both petroleum supply constraints and carbon emissions worries are driving hybrid engines, new fuels, and renewable forms of energy (technology is not the obstacle here) but the reality is that we are all deeply invested in a legacy petroleum-automobile system, from the well to the refinery to the factory to the forecourt. Even when new / alternative energies are proven, reliable, and equal in price and performance, the legacy will continue to exist, and it will erode gradually, as companies or consumers slowly renew their investment over time. Of course regulatory or social pressure can accelerate the incremental process, but nothing can make it vanish.

This means, in this example, there’s no possibility of a sudden change in individual land-based transport solutions. Whatever comes along will have to emerge into and live side-by-side with past systems and infrastructure for a very long time.

Legacy as luxury
Here’s another principle of legacy systems surviving into the future. There are many examples where a surpassed technology remains in existence, but moves into a niche or luxury market. The car replaced the bicycle and the horse, but both continue to enjoy massive popularity. In the developed world, more bicycles are sold than ever in history, but these are primarily for exercise or leisure. Horses, once widely distributed through society as instruments of work, are still part of a very active industry, but this industry is about leisure and/or gambling. Similarly, electricity replaced candles as our primary means of illumination, but candles are everywhere – associated with mood and romance rather than functionality. Ball-point pens squeezed the fountain pen off the table, but that merely freed the fountain pen to become an icon of status and refinement.

The dangers of prediction smirking

Posted by Adam Gordon on Sep 16, 2008 in all, emerging technologies, failed predictions, Future Savvy

In the MBA elective “Industry Foresight and Scenario Planning” that I teach, toward the beginning of Day One, I ask participant some very basic questions – basic questions being, of course, the hardest. One of them is: Can We Predict the Future, Yes or No?

Being graduate students, they’ve learned to prevaricate, and they do. It’s either No, with a bit of yes; or Yes with a bit of no.  Both are correct or course. Clearly nobody can see the future perfectly, but there do seem to be times and/or situation where some see it much more clearly than others. (And therefore make better forecasts. How one can recognize this is a core topic of “Future Savvy.”)

Anyway, I’m reminded of this because I stumbled on two Web links, one after the other, that are salvos in this debate. The first is at:           
http://picasso.rediffiland.com/blogs/2008/09/08/Predicting-the-Future-We-veall-hear.html
This is very much the standard, smirking, “look-see-bigCheese-got-egg-on-his-face” testimonial, of which there are many. Bloggers are, in many ways, journalists, and all journos like to see a big-shot egg-faced.

The other link is a fun 3-min video, posted on the Disney blog, see

which is at
http://thedisneyblog.com/2008/09/08/how-good-was-disney-at-predicting-the-future/

The clip argues, possibly slightly tongue in cheek, that the Disney forecasts as portrayed “Horizons,” EPCOT in 1983 – 25 years ago – were, in fact, not bad predictions. (Context is Disney’s tomorrow visions have, generally, been discredited.)

Back to the smirk site, above, which bears further thinking about. This one is hardly original (why do they all have the same 20 quotes? They also normally start with the Yogi Berra-ism “Predicting is hard, especially about the future.” Yawn) but at least they all correctly put us on our guard as to the poor future thinking of industry experts. In fact, the record of future prediction is littered with the most astounding mistakes. From underwater cities never built to rocket mail that never flew to Y2K disasters that never materialized – the list of laughable errors is a mile long. Experts aside, all of us are liable to confidently anticipate things that wont happen while missing what is brewing right under their noses.

Prediction-skepticism
Fair enough. But, the predictive nihilism behind these smirk sites is is dangerous in a number of ways.

First it promotes the skepticism that “we cant know anything” about the future. If the experts were so wrong – let’s all just give up. And therein we get the problem of many people, including highly-paid managers, justifying ignoring or under-funding future thinking. Sometimes managers, not wanting to look unprepared, suggest resources and expertise be channeled into “fast response” so that when the future becomes clear they can move rapidly to profit. This view is soundly rubbished in Hamel & Prahalad’s classic HBR 1994 article “Competing For The Future,” and I don’t think more needs to be said. 

Second, there’s obviously no science behind the smirk. They pointedly do not show the number or extent of incorrect forecasts *in context of the total forecasts made*. We don’t know, in other words, how many people got it right or at least right enough to have profited or avoided losses. Wherever you have significant success, it is likely that there is a good-enough forecast behind it.

Finally the failed-forecast smirk lists also miss the fact that many forecasts are not meant to be an accurate anticipation of events. Many are trying to influence the future, that is, talk a particular outcome into being or shape it, or stop it from happening. People make predictions to sway an audience, or get a response from authorities or opposing forces. When Gates said: “640K should be enough for anyone,” who was he talking to, and what was he trying to achieve …? A real prediction of the future? I think not. Microsoft did not stop at 640, and nor did anyone think it would. And nor did Gates think anyone else would. Forecasts are often salvos in the games of power and influence, flagrantly used to marshal situations or promote self-interests, in situations where accuracy is not the point.

The Uses and Limits of Prediction Markets in Forecasting

Posted by Adam Gordon on Aug 20, 2008 in all, failed predictions, foresight tools & methods, Future Savvy, prediction markets

Hmm. As the 2008 White House race hots up, we’re going to be hearing more and more – and then even more – about who prediction markets forecast to win, so it’s time to put down a thought or two about uses and limitation of this forecasting tool.

First, what’s if all about? If you already know, skip this section. Let’s start with the example in yesterday’s Telegraph: “Predicting the future – with the power of betting” Paul Parsons, August 19, 2008. As Parson’s reports, the University of Iowa is running a market where investors can buy “shares” in the two major US election candidates, each priced between $0 and $1. On election day, traders holding stock in the winner – Obama or McCain – receive $1 per share while the others lose their money. Investors can buy and sell their shares along the way, and as they do this the candidate more people will want to own (because they think he will win) will get more expensive. In other words, market forces will drive up the price of the outcome more people think more likely. As of August 19, the trading value of the Obama, at $0.62, suggests participants expect a 62 percent chance he will win. (Another prediction market site, midasoracle.org, has the figure currently at 59.8 percent.)

Prediction markets mimic stock market and deploy much the same software. Where a real market trades shares in an underlying asset, in a prediction market it is future outcomes which are “securitized”. The key principle at work is the sage market wisdom that “the price of a stock captures all the information known about it” – that is, all information is factored into the price (notwithstanding that some may have more or better information than others; some may be acting more wisely on their information). Therefore price is our guide to the cumulative knowledge of all participants and, in prediction markets, this “price discovery” allows us to know what most people think the future holds. They allow the “the wisdom of crowds” to be turned to a future problem, and tapped.

Serious Success

What’s exciting about all this is its success rate. Prediction markets are amazingly accurate in many circumstances, and by all accounts consistently beat more conventional quantitative and extrapolative methods. Prediction markets have consistently out-predicted election opinion polls and exit polls. Of course the predictive potential goes way beyond polling. Forecasting markets can and have been set up to predict the dollar movements to the success of same-sex marriage legislation, to who will win best actor Oscar. At one point there was even a US government market in future terror targets (trying to elicit public predictions of likely targets so as to plan accordingly) but this was deemed inappropriate and taken down.

As it has become clear that this method outstrips conventional forecasting methods, prediction markets have taken root in forward-looking businesses. Companies such as Google and Hewlett-Packard routinely use (internal) prediction markets to forecast sales figures, customer preferences, product adoption, and so on. HP is on the record as saying prediction markets consistently outperform their official forecasts.

The method has other advantages too. First, it requires no special techniques or expense. There are no fancy models to apply or complex algorithms to … to do whatever one does with such things. Second the forecasts are available in real time, all the time, and constantly update themselves. There’s no waiting for data collectors to collect, or statisticians to emerge with their answers.

The Limits

In my book, Future Savvy, I show how and why humans are poor at predicting, for dozens of reasons. The record of predicting is littered with failure. But, is that now all in the past? Do prediction markets solve the perennial problem of predicting the future, or at least get us closer? Yes and no.

Yes where prediction markets are appropriate. They work best under two conditions: first where there is a clear view of the options and operating conditions; second (related) where the time frame predicted is relatively short, usually under 18 months depending how fast things are moving. Where predicting the future means choosing between known alternatives, such as an election winner, or anticipating a point along a known continuum, for example the level of next year’s sales, prediction markets are great.
Where prediction markets run dry is in dealing with unfamiliar conditions, or unknown variables, or potential game-changing disjunctures in the world. Where the future is seriously fuzzy, where there are many variables, and the way they interact unknown, and drivers, blockers, and lags are hidden, prediction markets are of limited use because the outcomes can’t be framed adequately so that people can bet on them or against them. A prediction market for US president in 2012 would be far less useful than 2008. Similarly, while a market for the oil price in 2009 would be helpful, by 2010 or beyond factors driving the price may be so different (viz. developments in sustainable energy or geopolitics) that the result of a prediction market conducted in 2008 would be undependable.
So while prediction markets sort out probabilities between known likelihoods, they are not adequate to the task of investigating complex situations where we cannot frame the likely outcomes, or at least can’t know if we’ve framed them right. Also while prediction markets do help us, on aggregate, avoid some perceptual/cognitive fallacies, they are as likely as any other predictive tool to fall into the Zeitgeist effect. More on this soon…

A good list of articles on prediction markets is available here: http://www.midasoracle.org/best/

Media Futures Conference, 2008: How value will survive into the future

Posted by Adam Gordon on Jul 17, 2008 in 2015, all, emerging technologies, failed predictions, forecast filtering, innovation, systems dynamics, technology change

I was at the recent Media Futures Conference 2008 in London where a lively cross-section of delegates spent their time – as to be expected, this is the topic-du-jour – pondering the impact of social networking-based “citizen journalism” on the traditional media. In the era where everyone can “publish” all the time, what is the role and purpose of, for example, the BBC? As major news sites are scrambling to allow reader’s views, or eyewitness pictures and so forth, do they become dissolved in a sea of chat, blog, and tweet?

I don’t think so. There are many new communication modes to explore as established media outlets get to grips with the micro-publishing and social networking technological possibilities and consumer preferences, but the fear that traditional journalism or traditional media is “under threat” is, to me, overblown. Yes, anyone can publish news and views anytime, but most strive to put their 2c worth on the media sites associated with the major newspaper and electronic media brands. Why? To benefit from (a) the visibility, that is, presence of many readers, and (b) the editorial quality – the brand promise – of the established media outlet. A submitted picture that is seen, for example, on The Guardian site, is worth a thousand pictures on mynonameblog.com. This is all-the-more true if the publication editors flag readers attention to the citizen journo contribution: giving it an editorial stamp of approval.

The power of hubbing has been talked about a lot, not least by management guru Michael Porter, and there can be no doubting the reinforcing feedback loop at work in hubs. In this case, where more readers are that’s where more writer-contributors want to be, which makes the hub more valuable to readers, etc. What’s most valuable to readers in a world of a billion potential journalists? Little doubt it is what has always been valuable to readers, that is, the activities of editors providing oversight and quality control: filtering, choosing, framing and balancing information and viewpoints. Any content that is not subject to oversight is, well, just someone yapping.

From origination to “hubbing”
What will surely happen to the main media outlets is that the percentage of own-originated content will go down as the percentage of publicly contributed content goes up. They will have to adjust their game to include wider information quality management. In addition to providing what they always have (quality and timely and relevant content) they will need to be able to function less as own-content originators and more as hubs – providing editorial-quality oversight and therefore attracting many readers in the virtuous-cycle spoken of above. But they will still be in business, and still in essentially the same business of information collection, editorial processing and oversight.

The citizen journalist may effect what the media outlets says and does – for example by providing evidence that must be included in a story – but this does not change the balance of power. The value of the editorial oversight and synthesis is higher than ever. This is what branded media providers offer and the citizen journalist cannot. The principle of anticipating the future here is this: where a service provides a value, the service-provider will continue to exist into the future. Nothing has changed in the value of editorial oversight, in fact, it is more valuable than ever. That’s why major media outlets will be part of the future.

This is not to say the current major media brands will survive – they may well miss or mismanage the transition to information quality hub function – and fold, as brands or as companies, as new ones emerge. The general news brands may also, over time give way to narrower topic niche brands. But the concept of a centralized quality-enforcing media hub is not dissolving into citizen yapping any time soon.

More on “Future Savvy” rationale, and then I’ll stop. Promise.

Posted by Adam Gordon on Jul 11, 2008 in 2015, 2025, all, failed predictions, forecast filtering, foresight tools & methods, Future Savvy, managing uncertainty, Perils of Prediction, strategic foresight, technology change, trend tracking

This is a how-to book: how to evaluate predictions about the future – how to assess which ones are credible and/or how credible they are (how likely the future will turn out similar to the prediction). It is not just a guide to bad forecasts, it is also about how to identify and extract what is valuable in any forecast. This benefits readers who are required to manage professional or  personal situations that depend on correctly anticipating change. Whatever we want to achieve – help a company be more profitable – solve the world’s problems – develop their career – success depends on a good reading of the future. There are many guides to the future (predictions) but no guides to the guides. This book fills that gap. It helps readers assess predictions so they can make better judgments about the future for themselves and their organizations.

Decision success always implies congruence between decisions and the world in which those decisions play out. If we decide today to launch a product, buy a house, study for a degree, build a new light rail system, or take any similar decision of significance, the environment of tomorrow will be a key factor in the success or failure of that decision. What we do will be tested by the future conditions that emerge. Where there is a good “fit” between the initiative and the environment it plays out in — “the right product at the right time” — we can expect success. If not, we should expect to fail. Our decisions are only as good as the view of the future they rest on. All opportunities and successes and profits are realized in the future. All threats, failures, and losses are in the future.

In a fast-moving world, we know that the future environment will be different to that of today in big or small ways. New technologies, market shifts, changes in legislation, or evolving social values damage or destroy the traditional good fit we have between ourselves and the world. To achieve “future fit” we therefore use forecasts to position ourselves and our organizations, creating (or renewing) the fit between our initiatives and environment. In some cases we may be strong enough also to influence future events and outcomes for our own future benefit, and forecasts help us do this too.

All enterprises benefit from narrowing down what they must adapt to and plan for – all effort spent preparing for a future that will not emerge is a waste of personal or organizational resources. Good forecasts are a key ingredient in limiting the vagaries of uncertainty, and therein working smarter not harder, avoiding surprises, exploiting new opportunities and plugging weaknesses in fitting in with the future, and where possible influencing the future to suit the organization. This is true not only of business. People and institutions of all types position themselves for success by anticipating and adapting to events, or shaping them. Whether it is an NGO raising money for developing-world children, an urban planner advocating a light rail system, a homeowner deciding to sell a house, or a student making a career choice, identical principles apply — a higher-quality reading of the future operating environment in which these decisions will play out is what separates winners from losers. We should all be vitally concerned with forecasts as we are all effectively betting significant resources on their validity.