Future Savvy: Quality in Foresight

Economists make a handy, if mildly irreverent, distinction between “freshwater” and “saltwater” economics. Freshwater refers to economic theory that rests on the efficient markets hypothesis — a belief in the efficiency and rationality of free markets. It is associated with Milton Friedman and the University of Chicago school. It was the thinking behind Thatcher and Reaganomics and still more-or-less holds sway today, or it did up until the credit crunch.

Keynesian or saltwater economics by contrast holds that free markets often behave irrationally and inefficiently, and therefore need corrective policy from government. Saltwater economists say people and institutions often behave in ways contrary to the general good, or in ways that can bring markets (on which they depend) to their knees. Sound familiar?

Anyway, a recent Knowledge@Wharton article comments: “Like a natural science, freshwater economics lends itself to complex, often elegant mathematical modeling. The freshwater view is that consumers, offered an array of choices, will select the one that is best for them — a straightforward assertion that can be neatly expressed in mathematical formulae.

“In contrast, many assertions made in behavioral economics are more challenging to express mathematically. ‘Behavioralists’ argue that consumers don’t always act in their own interests, especially when they fail to understand the choices on offer or succumb to irrational impulses involving those choices… but such impulses are inherently vague and difficult to define.”

Cognitive bias

In other words mathematically modeling the economic future is possible if humans and the markets they create are rational, but far less possible if we act irrationally.

Now, as elaborated in Future Savvy, the fact that humans make irrational choices due to many cognitive biases and heuristics  is indisputable, not least since the work of  Tversky and Kahneman. Biases and heuristics such as “anchoring,” “recency effect,” “personal validation fallacy,” “herd mentality,” and so on, in which people make irrational choices, are well documented.

That’s why mathematical projections of economic behavior are unreliable. The economy may be counted in numbers, but it is still a human system, with associated inefficiency and irrationality. Blow this little debate in economic forecasting up large, and you have the essential problem with quantitative forecasting of any type. It assumes, erroneously, a freshwater view of humanity.

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In a recent Times article ‘The future was never going to be the C5‘ actor-comedian Ben Millar offers a familiar criticism of foresight work. Inter alia he says: “For all our achievements in art, science, and technology, the human race has always been spectacularly bad at predicting the future. Literature is littered with shockingly wide-of-the-mark utopias, dystopias, shiny suits, flying saucers and whole meals contained in a single pill. As a child of the Seventies, I was taught that as an adult in a world run by machines my main challenge would be how to spend my endless hours of leisure time…”

Yes, Ben. I’m sure you know this has all been said before ad nauseam. But more importantly, 40 years on many lessons have been learned, and it wouldn’t run foul of quality journalism standards to reflect this.

First, let’s be clear: nobody can predict the future. Anyone who says they can is a charlatan. Also, yes, unconscionably dreadful and irresponsible predictions have been made and are continually being made. But there are three problems with the ‘no-flying-car-so-there-we-can’t-predict-the-future’ argument:

(1) The kinds of predictions Millar cites are a product of a particular moment in Western thought and therefore foresight. The 1960s and early 70s were a time of Post-War American emergence, unleashing for a while a techno-futurist predictive rapture, most of which has indeed proved to be rubbish. There are still people, very famous talking-head futurists, promoting techno-rapture for the 21st century (caveat emptor) but as a whole the foresight field has moved on to become much more circumspect about what can be predicted.

Balancing techno-fantasy

Foresight practitioners are these days more likely to balance technology wowee with economic, social, and environmental friction; see systemic (often indirect or counter-intuitive) effects where once only simple cause-and-effect was seen; and create scenarios of key alternative outcomes rather than predict one.

(2) The second thing that is missed in gleefully deriding foresight work, is how many people and institutions get it right, or right enough.  It’s axiomatic that in order to be successful a person or organization must have correctly assessed both key changes and rate of change in their operating environment. To take a famous case, as quoted in Future Savvy, while Nixon’s Vice President Spiro Agnew in 1972 erroneously forecast super-sonic passenger air travel, Herb Kelleher, founder of SouthWest Airlines, foresaw the low-cost air travel industry. Bingo. Billionaire. Similarly, behind every success one can find future thinking that, while sometimes latent, was present and correct.

(3) The purpose of foresight work is misunderstood. We cannot predict the future and it’s pointless to try. We can only assess signals of change, trends, and potential for surprises and reversals, including challenging our all-too-easily calcified mental models, and take this into a process of understanding alternative outcomes and pre-considering best strategic actions. In other words, actively stimulating the investigation and analysis of future conditions in order to create the basis of better decision-making today.

In fact sometimes the ’strategic conversation’ that results from poor predictions is instructive to managers. As I say to clients: the goal of foresight work is better decisions not better predictions.

Back-street abortionists

The reality is that there is good and bad foresight work. Yes, some futurists are the technical and moral equivalent of back street abortionists. But the good work remains, and quality foresight is a critical advantage to decision-makers. The key thing is to be able to tell good foresight work from bad.

Simplistic trashing of foresight work en bloc ignores the weight of case evidence that people and organizations can improve their management of future uncertainty and/or create a situation where they manage the future better than competitors. Further, it encourages managers to fly blind into changing environments, often resulting in spectacularly poor decisions that deeply and widely punish their dependent stakeholders.

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Listening to the radio this morning there was a review that quoted a news room adage — one that I am indeed old enough to remember from my days as a newspaper reporter — which is: “if it bleeds, it leads.”

That is: disaster, mayhem, and death goes to the top of the page and towards the front of the newspaper.**

“If it bleeds, it leads” can be interpreted more or less narrowly. Mostly it means, literally, that accidents, explosions, injuries, and deaths will take page priority in the news over “talking stories” about politics and government and society. Disasters sell more newspapers than policy debates. But more generally it means bad news is more arresting and interesting, and will get more attention (and, again, sell more newspapers or gather more listeners and viewers) than good news, therefore it takes priority.

Now, if you were a ‘forecasting pundit’ or a think tank, or investment institution with an interest in getting media attention for yourself, which route would you choose in garnering media exposure? Good news or bad news?

Bad news. Of course. Russian Professor Igor Panarin gets an insane amount of publicity because his book claims that the United States could collapse soon (in two months time, I believe.) Ditto asset manager, Egon von Greyerz, who bangs on, for example saying: “America is hemorrhaging financially and economically. Other countries now realize they hold ‘worthless’ US dollars” in a piece called: The Dark Years Are Here. And just in case you think these are all gloomy foreigners, consider how Bronx boy, Gerald Celente, has dominated media coverage in the credit-crunch era predicting doom-and-gloom in every way, including riots and revolution on U.S. streeets within in the Obama-presidency term. For example http://www.youtube.com/watch?v=46MEqEgdLTg

These are just three that I single out just to make the point, but they are not different from many hundreds that trawl for media attention by predicting, essentially … “bleeding.” In fact, the real future will have good and bad in balance, just like the past. One of the lessons of Future Savvy is: if a prediction bleeds, it probably shouldn’t lead your thinking.

** In fact, the task of deciding what story to lead page one (or any other page) with, and what other stories to run, in what order, and at what length, is one of the more intellectually demanding tasks around, and one that quality journalist take seriously. So, “if it bleeds, it leads” is, in part, cynical journalist-ese for saying that the popular audience doesn’t have the time, patience, or interest in the deeper issues.

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Arsenal FC manager Arsène Wenger this week made a big prediction about the future of football in Europe. Now it’s hardly news when a sports coach predicts the future, but that’s because their forecasts are of the day-to-day variety and restricted to their own micro-climate: “Ronaldo has been going well in practice, I predict he’ll get on the scoresheet come Saturday.’ Or, ‘We’ll beat Chelsea in next months return leg,“ and so on.

Arsène Wenger

But this was different. Wenger (on the eve of the Arsenal vs Celtic Rangers Champions League match) predicted a “European League” in 10 years featuring the continent’s top clubs – that is, he offered foresight into potential structural, industry-wide change in multi-billion-dollar UK and European soccer industry.

Currently clubs play in their national domestic leagues. And all Europe-wide competitions are cup (pool stage + knockout) competitions.

Although not fleshed out, the form is not hard to see: the top four-or-so clubs from each major country (fewer from smaller countries) in one annual league competition. This means that Manchester United, Liverpool, AC Milan, Porto, Juventus, Real Madrid, Barcelona, Roma and so on would all be playing each other on a weekly basis throughout the year (and, presumably, playing in no other league competitions).

Drivers of Change

The point of Future Savvy is that one can judge the validity of predictions like this before time. In this case, part of the way to assess Mr Wenger’s future view would be to gauge the strength of driving vs blocking forces behind his outcome.

There is evidence of strong drivers in favor of a European Super League. These are:

1. The rise of “super-teams.” In the UK and across Europe the same few teams dominate their domestic league year after year. The reason is a simple reinforcing feedback loop where winning teams get more money (from TV rights, from gates, from merchandising, etc.) which means they can buy better players, which means they win more. Over the last decade the English Football Premier League has become, effectively, a competition between Manchester United, Chelsea, Liverpool, and Arsenal. (In the US the “draft–pick” system mitigates against any franchise getting too strong in this way, but no such system-balancer exists in European football.)

2. The growing ease and ubiquity of continental travel. Whether fans will follow their teams across Europe is a key issue, but indicators from cup competitions is that fans can and will travel.

3. The growing role of, and technological sophistication of television, particularly Sky Sports. Despite the many who travel, most people these days follow games at home or in sports bars. Television’s coverage and choices (the remote control options “red button”) have exploded, and screens themselves have got bigger and better. And genuine personalization of camera feed and other forms of interactively is emerging. In this, football, and professional sports as a whole, is becoming more about the screen as the stadium, accelerating a long-term trend. The reality is it makes little difference to most fans if the game is being played 50 miles away or 500.

4. The move to high-level, star-packed, events. There’s a clear trend across sports in general for events featuring the best players playing each other in all-star environments, not as a special “all-star” game but as an everyday occurrence. In cricket, for example, the Indian IPL has ridden this trend, offering franchised matches of, effectively, one mixed team of global superstars versus another. The fans love it.

There is also the financial do-or-die logic that soccer clubs face. The money feedback loop means they must continually drive up their revenues. It’s not possible to stand still. A European Football Super League would compel participation from the top teams for this reason alone.

vs Blockers

Adequately assessing the likelihood of the Wenger view of the future further requires investigation of blockers – factors which will prevent the outcome. In this case these may be overwhelming logistics of moving teams around to this extent week in and week out; limits on fans’ travel energy and budget; extent of fans’ loyalty to the relatively minor (non-super) domestic teams; and domestic league administrators’ determination and ability to keep domestic leagues from loosing their cash cows and following their own downward spiral into television obscurity.

These blockers on the European football league forecast are real. The question is whether they stop the future or how long they delay it. I’d judge the blockers as considerably weaker than the drivers and so I’d go with Wenger in predicting a European Super League (even richer and more “glamorous” than anything soccer has seen before) in about 10 years from now.

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The copy of USA Today, slipped under my Chicago hotel room door on Friday—failing which I would have missed the event entirely—marks the 40th anniversary of Apollo 11 putting man on the moon (July 20, 1969). It says: “40 years after Apollo 11: What’s our Next Step?” The strap goes on: “The moon again? Mars? An asteroid? Four decades after the moon landing, NASA seeks a new—and affordable—frontier in space.”

The failed “our-future-in-space prediction” cluster is useful because it is the poster child for bad predicting, nothing less than foresight idiocy in its purest form, worth mentioning only because it helps us to see smaller and more subtle future-thinking mistakes we make routinely.

This is what I said in Future Savvy (Chapter 5):

“The forecasts that surrounded the future of space travel and exploration are perhaps the most high-profile and comprehensively poor set of forecasts ever made, and therefore provide a good vantage point to consider what can go wrong in forecasting. From the 1950s, space was a huge topic of interest. All significant earthbound exploration challenges had been overcome, technology was moving rapidly, and what lay ahead, unconquered, was space. The need to explore it was deeply in the zeitgeist.
“At the same time, the Cold War created the specific situation where beating the Soviets in prestige projects was an important priority, important enough to divert massive resources to it. J.F. Kennedy’s rousing (future-influencing) 1961 prediction of putting a man on the moon by the end of the decade motivated and galvanized the United States, and the resulting Gemini and Apollo programs made this not only a human achievement but a successful prediction. As a result, analysts of all stripes were quick to project the trend and predict a moon base, lunar communities by 2000, followed soon by trips to Mars and beyond, and on to the limits of space. . . .
“The last man to set foot on the moon was in 1973. The Space Shuttle tried to maintain forward momentum under the guise of scientific research, not without disaster, and an almost inconsequential international space station has been built. To this day there are many who cry into their soup over the lack of space exploration and conquest. So what happened? The groundswell of prediction was wrong because it failed to see that putting a few U.S. men into orbit did not add enough value to enough peoples’ lives to justify the expense—particularly in the economically uncertain 1970s. In the end, the majority of consumers voted with their wallets to postpone, if not entirely eviscerate, human space exploration.”

One could go into great detail, but simply put, the intertwined elements resulting in this poor view of the future were:

1. Failure to recognize user utility and the choice consumers make in determining the future. That is, for most people the cost of any space venturing is not worth the benefit (i.e. what benefit?) The fact that we “can do it” is hardly relevant. The real futures question is always: do most people want it? In the 1960s space was “worth it” (particularly in that the goal was clear and bounded) because spending billions on a prestige project made sense at a time of (a) absolute US economic prosperity and (b) ideological dispute with the USSR.

2. Projecting trends without considering the strength of underlying drivers. Space exploration was, apparently, on-the-up in the 1950s and 60s. But trends are only as good as the drivers that support them. When the drivers go away (lack of public support due to cost/benefit issues) the trend stops. In fact, there is no real, dependable, trend to space exploration. There was a blip in the 1960s when conditions temporarily favored a national prestige extravaganza. There wasn’t a trend before, and there hasn’t been any since.

3. Forecasting mired in the conditions or spirit of the present, the zeitgeist. Space was important in the golden-era 50s and 60s; and particularly in that it was arena of competition with the Soviets. But it’s always a mistake to assume the framing conditions of the present will exist in the future, and in this case 40 years later, they most certainly don’t.

Don’t hold your breath

What of 40 years time? It is quite likely that “space flip” flights into orbit will be safe and cheap enough to commercialized in the next decade. Unmanned probes (again safe and relatively cheap) will continue, and popular access to their images and experiences will be greatly enhanced. But that’s all that will happen until such time as costs and other conditions of possibility change fundamentally, which implies a completely new form of space travel, of energy, of materials, and of human resilience and longevity. Not in this century.

Wired Science ran a July 20 article “40 Years After Apollo 11, NASA Maps Out the Future,” which puts the best possible spin on  this unmanned-probe future. It is careful to end without crushing the feelings of space junkies, saying: “Any American landing on Mars through the Constellation program would come some time after 2030.” It won’t happen, and here’s another secret: if anyone is going to land anywhere it will be a Chinese person. China still has prestige projects ahead of it, and human space exploration could be one of them.

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Samuel, L., Future: A Recent History, University of Texas Press, 2009

I recently received a copy of Future: A Recent History to review. True confession: what hit me first on picking up the book was (a) “wow, the title Future is not already taken!? And (b) what a fabulous job the University of Texas Press has done producing this book. It is beautifully designed, with an understated Art Deco motif, and carefully laid out with enough text on the page, on delightfully solid paper stock.
It may seem odd to go on about text on the page, but it’s much easier to read like an adult, in paragraphs. So many books, particularly business books, these days appear produced at 14-point, double spacing, like pre-school readers. Makes you wonder…

Anyway, author Larry Samuel’s project is to investigate the history of views of the future from 1920 to the present. (The book has an acknowledged US-centric focus, partially defended by the notion that future-mindedness is “a principle strand in America’s DNA.”) He organizes the book chronologically into six periods between then and now, and shows, with interesting examples, how each period had its own views of the future, and how the views shifted from period to period.

In tracing the history of “tommorowism,” in this way, Future is on a similar track to the classic book in this field: I.F. Clarke’s The Pattern of Expectation 1644-2001 (Jonathan Cape, 1979). It ultimately makes similar points, although Samuel’s argument is obviously drawn from more recent examples. As Samuel puts it: “A look back on how people looked forward reveals that while it possesses certain common themes … the future is not a fixed idea but a highly variable on that reflects the values of those who are imagining it.”

Happily I can say this chimes exactly with the argument of Future Savvy, particularly Chapter 4 “Zeitgeist & Perception,” where I argued how heavily the nature of the present and its topical issues frames how the future is seen (what is forecast, what is aspired to or feared, what counts as a valid method for thinking ahead, and so on). Which means the framing conditions of the present  should be carefully analyzed in assessing the validity of any future view.

Historiography

Historiography – investigating the meta-conditions surrounding what is recorded and how it is interpreted by historians – what counts as “history” and for whom –  is a well-understood part of doing good history. Unfortunately, there is no equivalent standard “futuriography” in the foresight field, despite it being absolutely fundamental to understanding the value of our own predictions as, similarly, highly determined by the epistemic configurations of their production. It is here that Samuel very competently fills a much needed gap.

The practical implication of this, which Future does not get into – it’s not that kind of book – is that to make better predictions (or make valid assessments of others’ predictions) we need to ask stiff questions as to how much of what we foresee is determined by the perspectives of today, and expect the answer to be “very much.” Understanding the limitations and biases of our own perspective is the sine-qua-non of a robust view of what tomorrow will actually bring.

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Peter Bernstein, the author of “Against the Gods: The Remarkable Story of Risk,” died recently at the age of 90. In memoriam McKinsey Quarterly reposted this recent Bernstein interview. I put it up here because it’s a timely and timeless lesson in thinking about uncertainty and threats, and avoiding simplistic (quantitative) approaches to managing them – one of core themes of “Future Savvy.” Bernstein offers and endorsement of real options and explains why sophisticated Long Term Capital Management (LTCM) mathematical models to control risk created “a math dependency” that was blind to, among other things, unexpected systemic feedback to its own emergence:

One of the first things Bernstein says is that risk implies that we don’t know what will happen, which could be good things happening too. Risk management, as it is currently understood, gets executives to look at what could go wrong in the uncertain future of the enterprise. (Somehow threats are easier than opportunties to get departmental budget for.) The standard approach is to break risks down into commonly understood threat categories: a typical analysis would illuminated risks posed by technology failure, communications failure, security failure, natural disasters, accidents, or market/reputation risk, liability risk, financial/credit risk, and so on. This negative-outcome identification is typically followed by strategies to monitor, minimize, or control the risk event or its impact.

Doing all this is great, BUT it is just a narrow part of enterprise and industry foresight. Why? First, industry foresight or futures studies for business is focused as much on the opportunities change offers as on threats. Second, foresight tools (when correctly applied) set themselves the task of enlarging perspectives or mental maps so that we can see more things, or more possibilities than the generally expected set (whether good or bad). Set against this, risk management is little more than the catalog of known threats. The unknown or poorly understood threat, or unseen opportunity missed (and grabbed by others) is likely to be more damaging to the enterprise.

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Top of the news yesterday along with Iran’s election protest was Israeli prime minister Benjamin Netanyahu’s statement that he — as leader of the right-wing Likud party — could endorse a Palestinian state. It was framed in conditions on Jewish-state recognition, and requirements on security, borders, refugees and Jerusalem that are, from today’s vantage point, very difficult to imagine Palestinians or Arab states agreeing to. So no change is expected. Even the breaking-story reporters had to admit that, rhetoric aside, this is not a breakthrough.

There’s an old joke in journalism from the 1970s that goes: “You can write the same headline on any and every story about Israel’s relationship with its neighbors: ‘Prospects for Middle-East Peace Dim.’”

Sure, it’s partly Eeyeore-ish journalist wit. But what’s interesting from a foresight point of view is that, running the world forward 40 years shows it was a reasonable understanding of the future. Why? Solid foresight is always predicated on a solid understanding of the forces for and against change. “Prospects for peace dim” acknowledged that forces and enablers of change were overpowered by what was preventing anything fundamental from happening (friction and blockers in Future Savvy terms.)

The basic truth is that Israel-Middle East is a complex situation characterized by a more-or-less equal balance of power. Israel has military and nuclear superiority, and US backing. Arab countries have oil, population numbers and population growth, and a billion more-or-less sympathetic moslems around the world, and therefore time on their side. They also have, particularly in Gaza, relatively widespread poverty and low welfare and educational development, which is  a force against moderation and therefore a negotiated settlement.

A genuine balance of power means we have equilibrium, and therefore should expect no change. That’s why we’ve had plenty of skirmishes, but no change in 40 years.

Looking out for the next 40 years, is this still the case? Can we write “Prospects for Middle East Peace Dim” on all news stories for another two generations? Following the foresight logic above, this depends on whether anything breaks the fundamental equilibrium. There are four issues apparently large enough to threaten the status quo:

• Water shortages and water conflicts
• Change in US policy
• The end of oil-based transport energy
• Iran going toxic

Water is a favorite of trend-foresight sessions. It sounds like the key issue in a rising-population world. In theory yes, but it’s unclear whether it will lead to anything more than local conflicts or wars, which in Israels case, we have already. On US policy, the Obama administration is attempting to show even-handedness, but its strategic interest lies with Israel as military ally and ideologically temperate (democratic, at least) bastion in the region. So no change there either. On oil, we are definitely in an era where – for security and climate change reasons – fossil fuel is entering it’s twilight phase, which will erode revenues and therefore power of ME Arab states. But, as mentioned earlier, poverty is as great an obstacle to peace as any other. (Remember the Israeli “let’s-grow-our-way-out-of the-situation-together peace platform of the 1990s, seeing tackling the development issues as the root of creating moderate mindsets across the region.)

That leaves Iran which may change the balance if it really goes toxic (develops and uses nuclear weapons in terror strikes.) This is a low futures likelihood – it’s not just luck that nukes have stayed in their box since 1945 – no state wants to carry the stain of the nuclear pariah for all time. There’s a moral blocker on this outcome that has worked for generations. Nuclear powers rattle, but the don’t bite. But … what if the wildcard scenario of a massive nuclear strike on Israeli soft targets were to happen, what then? The current low-grade hostile standoff would become a supernova, but we’d still have power balance, and while we have that we’ll have status quo and  journalists can expect to write “Prospects for Middle East Peace Dim” on top of every story about the region for another 40 years.

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Normally I make a point of not reposting anything put up elsewhere, but this small list of foresight lessons deserves broader attention than just Electronics Weekly. According to EW blogger David Manners, Tsuyoshi Kawanishi, former CEO of Toshiba Semiconductors in his book Chip Management quotes 10 wisdoms of forecasting, see below.

They have a bit of the fashionable “SunTzu Art of War” feel to them, and some of the quotes may be apocryphal. But no matter. What’s really interesting in this very savvy list is how customer-focused the lessons are. As said in Future Savvy, and one can’t say it too many times, what customers (users, the public) want and the cost-benefit tradeoffs they will make is a MUCH more reliable guide to the future than any techno-fantasy.

The wisdoms also reflect a foresight industry insider truism and paradox: you seldom get to the future by asking the customer directly (e.g. in a focus group) what they would like to have. You have to leap for the customer (and use focus groups only to refine new offerings.)

The list:

“1. St Augustine said that it is a blessing from God that we can’t predict the future. If we predict prosperity, we will become complacent. If we predict evil, we will lose the ability to discriminate.

2 Sharp President Haruo Tsuji: ‘You cannot find out what the consumer wants only by doing market research. You need to pull the ideas out of your brain. Manufacturers of the future should not simply respond to market demands, they must create market demands.’

3. Konosuke Matsushita said: ‘Don’t try to fit your business to a forecast. Fit it to the needs of your customers.’

4. Toshiba President Sugiichio Watari: ‘Money doesn’t come falling into the headquarters of Toshiba. If you want money you need to go to the customers.’

5. President Yoshio Tateishi of Omron: ‘Learn from your customers. If you learn from internal resources you will become self-satisfied. If you learn from your competitors you will fall far behind.’

6. Professor Yoshiya Teramoto of Meiji Gakuin University: ‘When companies start a big market research project, it is one sign of the ‘big company’ disease.’

7. Tsuyoshi Kawanishi: ‘The way to predict the weather is to look at the sky. And, every once in a while, you can make your prediction by simply thinking.’

8. President Haruo Tsuji of Sharp says: ‘Don’t be a spider, be a honey bee.’

9. Takeshi Kaneda, a management critic, says: ‘After elaborate research to find out what the consumer wants, Ford produced the Edsel. It was a complete failure. Ford mistook what the customer wanted for what they would really buy. They ignored their insight and relied on consensus. Japanese tend to emphasize harmony and consensus. But insight and decisiveness can be more important.’

10. Someone says: ‘Figures do not lie. But liars often use figures.’”

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I’ve been quite careful not to use this blog as a “brag wall” for Future Savvy. I can say reviewers have all been glowing, without exception. But this review, below, which recently appeared in the St Andrews Management Institute’s Vector Magazine, I felt was worth reposting here because – more than just saying nice things – it also captures the essence of what the book is trying to do. Here it is:

Book reviews by SAMI fellows and associates
“Future Savvy” by Adam Gordon (American Management Association, 2009)

“Forecasts and predictions are ubiquitous. We are bombarded with views of the future on a plethora of subjects from myriad sources, with a diverse set of motivations and self-interests. Adam Gordon seeks to provide a practical users guide to the assessment and interpretation of all things about the future, with special emphasis on the cautions and ‘health warnings’ that need to be applied, so as not to be misled by forecasts. However, the author is careful not to veer towards over-cynical dismissal of all future projections; rather, he seeks to provide guidance to the reader on how to apply the necessary caveats, and in the author’s words “profit from change”.

The book covers a very broad field, from the basic issues of the misuse of data and statistics, covering the quality and validity of data as well as their misinterpretation, through technology forecasting, trend and horizon scanning to quantitative modelling and scenarios. The one theme common to all these activities is the need to be alert to bias, whether it be a deliberate motive to influence behaviour through a dire prediction; or a bias inherent in futurologists needing to see rapid and pervasive change in all areas of society – if it exists or not – and evangelising it.

The track record of much futurology is mixed. Well-known examples are quoted: television did not lead to the end of the cinema industry. Nor has space exploration led to people taking foreign holidays on other planets – yet! Bias may also lie in the beholder. The ‘Zeitgeist’ tendency, whereby we are all influenced by contemporary perceptions, affects not only how “experts” and professionals see the world, but also how the audience receives the views of the future – often with unprepared minds. The internal “official future” of an organisation can pose a real blind spot to its progress.

The weaknesses of much quantitative modelling are highlighted, with such forecasts only being as good as the assumptions on which they are based, but which are often not overtly stated. In contrast to the conceptual and practical errors inherent in much futures output, the role and advantages of scenario planning are emphasised as a tool for challenging assumptions and developing alternative futures: “It’s better to be vaguely right than precisely wrong”.

The penultimate chapter takes examples of relatively recent forecasts from a range of organisations, whose subjects range from US agricultural production to UK dementia sufferers. These are subjected to a form of ‘retro wind-tunnelling’ to illustrate the deficiencies in their construction and how they would have benefited from the application of methodologies described earlier in the book. The final chapter provides a summary checklist, or framework, to apply in evaluating forecasts and future predictions.

Adam Gordon has written a shrewd and perceptive book that deserves a wide readership, especially among managers in both the private and public sectors, as well as the familiar ‘general reader’. Those wishing a more detailed technical guide to the various forecasting and futurist methodologies will need to consult other standard works. Professionals in the fields of management and strategy consulting and scenario practitioners might well be familiar with many of the points made in the book. However, those with some savvy might do well to recommend the book to their clients.

Michael Owen, 20 April 2009

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