Future Savvy: Quality in Foresight

Today I offer a rather naked punt for a site called “Global Voices,” but there is a solid foresight methods reason for doing it.

In its own words: “Global Voices is a community of more than 300 bloggers and translators around the world who work together to bring you reports from blogs and citizen media everywhere, with emphasis on voices that are not ordinarily heard in international mainstream media. Global Voices seeks to aggregate, curate, and amplify the global conversation online – shining light on places and people other media often ignore. We work to develop tools, institutions and relationships that will help all voices, everywhere, to be heard.”

There are of course other places to get local-blog perspectives on current issues and concerns, but this site appears to be the broadest and best, at least at the moment.

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Why is this important for thinking adequately about the future?

The biggest problem we have in foresight work is the double-whammy that (a) people, on aggregate, choose and make the future, and (b) we don’t know what they will choose because we don’t adequately listen to their concerns and motivations, or worse, are we are deaf to their motivations because they are outside of our frame of reference.

(a) Yes, the future is influenced by new capabilities, driven by new technologies, but technologies come out of societal perspectives (what are we going to invest in or research towards?) and then adoption (which technologies “make it”) is all about social and economic choices. So what defines the future is what most people want. (Not everyone wants the same thing: that’s what politics is about.)

(b) Share of voice is political too, and in our world some people and companies have vast sway over media channels, but most have no voice. But just because they have no voice doesn’t mean they are not making choices as to (a) above. All it means is that if you’re not listening, the future will surprise you.

A “surprise future” = a lack of mental preparation. Without exception.

It is easier both practically and ideologically to listen to ourselves and our micro-communities of associates online or off, which confirms what we think and how we think. It’s much tougher to absorb alternative perspectives. Global Voices is not perfect. It is still, naturally, the preserve of the literate and educated. But it is a first step out of the frame.

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I was lucky enough to have Future Savvy included in a lengthy review of critical thinking in forecasting & foresight, done on the SmithySmithy “info-savvy” blog. The post also included Nassim Taleb’s ‘The Black Swan’ (2007) and ‘Fooled By Randomness’ (2005); Kenneth Posner’s ‘Stalking the Black Swan’ (2010), and Chris Luebkeman’s Drivers of Change (2009).

As Stoyko’s is head-and-shoulders the most insightful and thorough assessments of the book itself, and the book in context, I’m reposting it here, with thanks. There are also fabulous graphics added, such as these (see more below):

“My search led to Adam Gordon’s Future Savvy. Like Posner, Gordon challenges Taleb’s blanket dismissal of forecasting. Gordon does not deny the existence of Black Swan events. And his book is a giant compendium of all of the things that usually go wrong with predictions. Moreover, Gordon offers a sceptical discussion of the subject that chastises simple-minded futurists, tech enthusiasts, and various other prophets of doom and boom. The difference between Taleb and Gordon is that Gordon doesn’t dismiss out-of-hand the usefulness of structured thinking about the future. Many important decisions require us to speculate about what the future might hold. Gordon wants us to be savvy in the way we anticipate the future instead of flying by the seats of our pants, so to speak.

“To set the stage, Gordon talks about how the forecasting industry is rife with problems. There are no standards, no accepted methods, no standard terminology. There are no penalties for failure given that people tend to forget forecasts by the time they can be proven wrong. And when dealing with the forecasts offered by pundits, stakeholders, and activists, Gordon reminds us, “we are knee deep in predictive wishful thinking, scare-mongering, or blatant self-promotion.” (p. 5) Buyer beware.

“Then there are the data problems. Forecasters use data from the past to project trends into the future. They rely heavily on data gathered for other purposes, not gathered for the task at hand. Availability is patchy. The data comes from multiple sources and is created using different methods. Important statistical caveats get lost. The context of the original studies gets forgotten. Variables are often defined loosely … and change over time … and are measured differently in different places. Data gathering methods often change over time in ways that exaggerate or obscure a trend. Sensationalist “newsy” data often commands the most attention. Some things are inherently difficult or impossible to measure accurately. All sorts of assumptions get embedded in data projected into the future. Furthermore, Gordon talks about the ways in which numbers can be finessed in an underhanded way. He advocates “number scepticism”, warning: “But no matter how scientific the data appears, choices have been exercised at every point about what to observe, what to count, how to measure it, and how to report it. … But numbers are not bedrock. There is no bedrock.” (p. 59)

“As an aside, statisticians have a snide nickname for analysts who mix’n’match statistics from a hodgepodge of sources to create complicated models or story-lines. That nickname is junk-yard dog. Gordon gives the impression that the forecasting business is, by necessity, heavily populated with these collectors.

“The sources of potential error don’t end with data. Our biases cause us to misinterpret and misreport the data.

“Some bias is intentional manipulation. Rascally analysts ignore or downplay countervailing evidence. They give evidence less scrutiny if it confirms the desired result. Emotionally charged language and associations are used. Terms are defined in leading ways. Extreme cases are used to represent the norm. Forecasts that don’t accord with an agenda get ignored, especially if the forecast is sponsored by a powerful interest. Organisational incentives can cause those being scrutinised to fudge the numbers. When forecasts are presented to the media, the most extreme trends get attention and important caveats remain unreported. Gordon is particularly critical of the so-called futurists who use “stretch thinking” and “big-picture thinking” to imagine a world full of only big changes. Many have a technophile bias, or the assumption that technology is the sole motive-force of large-scale societal change. Gordon’s advice is to keep your guard up and be wary of motives.

“Setting aside the thinness of this advice, Gordon has a strange attitude when talking about manipulation. He makes a distinction between forecasts that attempt to be accurate and forecasts that attempt to influence. Employee-prodding managers, partisan policy wonks, and alarmist activists use loaded forecasts to move minds. Humility, qualification, and tentativeness don’t have a place in these circles. There may be a legitimate reason for using leading forecasts, such as communicating the art-of-the-possible or giving someone an ambitious target to strive for. However, leading forecasts without full disclosure are instruments of underhanded manipulation. Gordon is eerily agnostic. His advice and tone of voice suggests that he is oblivious to the ethical problems posed by the manipulative use of forecasts. It’s a strange contrast with Gordon’s advice about being careful and pragmatically sceptical. [Editor's note: Agnostic? Moi? Hardly, but perhaps the chill of my irony was not chilly enough.]

“Back to the sources of error.

“Gordon itemises a number of cognitive biases that are inherent to the way we think. We often miss Black Swan events and abrupt changes in prevailing wisdom (“paradigm shifts”), he argues, because we are always filtering information based on perceived relevance. This “inattentional blindness” causes us to not notice important influences on the future. We also overemphasize recent happenings over older events (the recency effect). We’re susceptible to herd thinking and faddish ideas. A few chance events are often mistakenly interpreted as a trend or other pattern. Gordon places particular emphasis on how our current context frames the way we see and think (situational bias), especially how the prevailing mindset and preoccupations of an era skew the way we think about the future (Zeitgeist bias). For example, nuclear-powered airplanes may have seemed inevitable to someone living in the 1950s, a time preoccupied with thoughts of nuclear technology, suggests Gordon. That notion seems absurd today. To counter this problem, he argues for the need to extract the assumptions underpinning our expectations. Those assumptions need to be questioned and tested. And one good test is to reverse the assumption; that is, consider how the future would be different if the opposite (or very different) assumption were used.

I would add that people habitually rely on lazy assumptions about the future in general. As Howard Segal points out in his book Technological Utopianism in American Culture (2005), late-19th and early-20th-Century intellectuals assumed a technological plateau when describing the future. Even today, we assume our arrival at some destination—a future steady state—instead of a world of on-going change that is unevenly distributed and erratically paced, as exists now.

Gordon invites us to consider the utility people derive from a particular technology before jumping to conclusions about how it will revolutionise everyone’s lives. Tech-happy futurists are too quick to assume broad public acceptance of a new technology while ignoring the trade-offs of adoption. There are costs to be considered. In many cases, the price is too high and existing technologies do a good enough job. Or old technologies have an inertia, such as when users are “locked in” to a particular technology. Or social values change. Or switching creates undue inconvenience and aggravation. Or the technology has uneven appeal across diverse groups in society. Or, or … Gordon reminds us that simple technological domino effects almost never happen. The pace of change is usually slower than anticipated. A variety of factors determine how successful an innovation will be.

That leads us to the dynamics of change. I’m not going to describe each dynamic in detail. Gordon devotes a lot of space to them. Instead, I’ve listed them iconographically in the following diagram. Note that the darker lines signify consequences (and consequences of consequences; a.k.a. second-order and third-order events).

“A trend observed today may not continue onward along a straight-forward path. Trends peter out … change course … hit limits … get caught in reinforcing loops … have side-effects … provoke reactions … et cetera. The same goes for underlying causes. Trends can be particularly difficult to track within the complex systems that govern our lives. Thus, Gordon offers a chapter on system analysis.

“As someone who studies organisations, I’m often seeing policies and strategies change with sadly predictable pendulum swings. Gung-ho leaders push in one direction with gusto only to get a lesson in humility. Their efforts hit limits and opposition. Their assumptions hit reality. Subsequent leaders see wreckage everywhere and push in the opposite direction, looking for balance. Balance alludes them and they go to far. Another pendulum swing begins. Some swings happen from season to season. Others happen over decades. These swings may be predictable, but their exact timing certainly isn’t.

“Gordon rounds out Future Savvy with a utilitarian survival-guide of sorts. His big advice is that “it’s better to be vaguely right than exactly wrong.” Success is being alert to important changes and being prepared to cope, not with having accurate predictions. Narrowing down the things that need to be prepared for is an important practical benefit. In that spirit, Gordon talks about the strengths and weaknesses of using multiple scenarios instead of pat forecasts. He steps the reader through the analysis of some forecasts while looking for weaknesses. A chapter-long battery of questions is offered to guide the analysis. These questions do a good job of summarising the book.

“All told, Future Savvy is an excellent textbook for those who want to discipline the way they think about the future. I disagree with Gordon’s tangents about the inherently subjective nature of truth. I also have a few qualms about his take on scepticism. But these tangents rarely get in the way of his stock-taking exercise. That exercise has led me to be even more suspicious of forecasting, especially forecasts in volatile industries where data is patchy and assumptions are legion. I’d love to know the success rate of high-tech cheer-leaders … er, research firms that peddle forecasting numbers. Gordon dismisses the tracking of forecast failures as “smirk lists”. I’m with Taleb and his tsk tsking. If these numbers are just part of the hype machine and have a dismal track-record, then what good are they? Validation for reckless investment strategies? Fodder for misleading Power­Point slides? Numbers that give a false sense of being in-touch with the market? Tsk tsk.

“That said, Future Savvy has increased my interest in foresight more generally. Gordon’s guide left me wondering how I can better prepare groups of decision-makers to think about the future. How do we get them to see the many changes afoot with greater foresight?”

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Anyone can see a trend – a pattern in the data, something waxing or waning in the world. You often see trend lists put out by research organizations or trend-tracking firms that itemize things on the march or in decline: people living in foreign countries up 10%; biodiversity down 30%; numbers of patents filed up 60%, and so on.

The harder task in achieving quality foresight is to judge across such lists what is really going to change the world and therefore the operating environment for most firms, and what is just, well, merely of passing interest. The true test is to get trend impact right, not merely to call the trend.

There is no exact science to this of course. But a good heuristic is to judge the strength of the trend (drivers for vs. blockers against) x change to status quo (how new is this really?) x number of people affected. In this regard, a recent FT article reports on a genuinely world-changing trend.

The story is about how Indian television stations, led by Murcdoch’s Star India and Viacom are writing more independent, assertive roles for women in soap operas to reflect new realities in the Indian middle class. They hope to renew viewer ratings, as this clip explains:

New womens’ roles and aspirations have permeated Western society in the past generation and a half, and have profoundly changed everything from dress to daycare. Now the other 5 billion are going there too.

I would not (I stress) expect the Western model to be followed to the letter. Cultures always interpret world trends and technologies their own way. But billions of girls are growing up to be unlike their mothers in key respects, and will demand industries  — not just the media — move with them, and will reward those that do with unprecedented commercial opportunities. That’s a certain future.

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I’ve been meaning to write about the business model canvas and how it fabulously advances industry foresight (principally by providing a way to take foresight ideas forward into actions, to-do’s, and next steps.) It is truly breakthrough stuff. See The Business Model Innovation Hub and the book Business Model Generation, by Alexander Osterwalder and Yves Pigneur.

But, it is the eve of the soccer World Cup so in the interest of providing more couch potato time for myself, I table the longer discussion in favor of this taster, which shows the FIFA business model canvas. The point of the canvas is it provides a “sandbox” for thinking how elements could be rearranged, taken away, or new ones added, to renew the business model for the future.

Of course, renewing a business model begs the question does it need renewing? Which is the question that bedevils all scenario and futures thinking. For some the status quo works perfectly! Did you know that FIFA demands that Sepp Blatter is hosted by South Africa at the protocol status of a visiting Head of State? Hmmm.

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I’m always looking for ways to explain the role of quality foresight in everyday management, so I liked this little animated gif from managewell.com.

Imagine driving down a country road when a street dog starts chasing your car. The dog attacks the car, but by the time it gets close, the car has moved ahead, so the dog changes direction and attacks the new coordinates. This goes on as the dog adapts, but it never quite catches up, and once it is following behind it is obviously too slow to catch up. Had it thought ahead and run straight it would have had its day with the tires.

The resulting curve looks something like this:

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In mathematics, this is known as the ‘curve of pursuit. The dog is attacking the problem as it sees it right now, but by the time it reaches it, the problem has moved on a few steps. A ‘problem-solving’ approach like this is going to prolong the time it takes to get to key decisions, and give the initiative to competitors. The better approach in managing moving situations — and all situations are moving — is to anticipate and tackle tomorrow’s position today.

Obviously the devil is in the quality of the anticipation, but for that there is Future Savvy and other key resources that exist for determining quality in foresight work. Industry foresight can never be done perfectly, but it can be done well enough to avoid the “dog chase” future-management style that characterizes much of industry leadership.

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Successful people are considered to be better future prognosticators than average. Why? Because it is assumed they must have known something about the future at some previous point in order to become as successful as they are. (Unfortunately Taleb’s various injunctions as to the workings of randomness fall on deaf ears, as do Gladwell’s many observations as to the tricky relationship between cause and effect.)

In 1995, at the height of Microsoft’s power over the economy and the zeitgeist (before Google came into its own, before Apple renewed, etc.) Bill Gates wrote “The Road Ahead,” which was, as one would expect, a broadly techno-optimistic look at the future. Did it see 9/11? No. Iraq War 2? No. The Credit Crunch? No. For a start it only really thinks about digital technology, and that’s going to be a very partial guide to the road ahead, at best.

But, in a recent The Atlantic article, “Bill Gates: More Profit than Prophet,” Tom McNichol evaluates Gates’s foresight on its own terms. As reproduced below, he finds it more “miss” than “hit.”

In general, Gates makes the mistakes outlined in Future Savvy, particularly in predicting the future based on its technological possibility rather than economic or social practicality. He’s short on systemic/feedback thinking and therefore misses side effects and unintended consequences. He also falls into the wishful-thinking bias: mixing up what he and (and Microsoft business) would like the future to be with what it really will be.

This last factor is less a mistake than a classic tool of future advocacy, and Gates would no doubt admit to a bit of this. It is illuminating (and sobering for future predictors) to see how much of the digital future Microsoft had within in its area of control in 1995, which it ceded to others. That lowered Microsoft’s ability to influence the road ahead and therefore weakened Gates’ predictions.

The McNichol analysis (shortened in places):

E-Mail
Prediction: Gates wrote, “Electronic mail and shared screens will eliminate the need for many meetings. … when face-to-face meetings do take place, they will be more efficient because participants will have already exchanged background information by e-mail. … information overload is not unique to the (information) highway, and it needn’t be a problem.”
Verdict: Miss. Gates’s view of e-mail now seems naively Utopian, failing to account for unintended consequences. If anything, e-mail has made workplace meetings more frequent and less efficient. “Didn’t you get that e-mail?” is probably the single most common question posed at meetings, a query that often leads to … another meeting.

The Wallet PC
Prediction: “You’ll be able to carry the wallet PC in your pocket or purse. It will display messages and schedules and also let you read or send electronic mail and faxes, monitor weather and stock reports, play both simple and sophisticated games, browse information if you’re bored, or choose from among thousands of easy-to-call up photos of your kids.”
Verdict: Hit. Gates’s wallet PC is more or less today’s mobile smartphone with voice capability added.

Wireless Networks
Prediction: “The wireless networks of the future will be faster, but unless there is a major breakthrough, wired networks will have a far greater bandwidth. Mobile devices will be able to send and receive messages, but it will be expensive and unusual to use them to receive an individual video stream.”
Verdict: Miss. Today, receiving a wireless video stream is neither expensive nor unusual; in fact, it’s so commonplace that most people don’t give it a second thought. Gates failed to anticipate that wireless would become cheaper and faster, but his chief mistake was a common but flawed assumption among techno-futurists: that new technology is adopted chiefly on the basis of technological superiority rather than social factors.

Social Networking
Prediction: “The (information) highway will not only make it easier to keep up with distant friends, it will also enable us to find new companions. Friendships formed across the network will lead naturally to getting together in person.”
Verdict: Hit and Miss. One of the killer apps of the information highway has turned out to be social networking… But friendships formed online don’t regularly lead to face-to-face meetings. Far more common is the user with 250 Facebook friends, most of whom he rarely, if ever, sees in person.

Online Shopping
Prediction: “Because the information highway will carry video, you’ll often be able to see exactly what you’ve ordered. … you won’t have to wonder whether the flowers you ordered for your mother by telephone were really as stunning as you’d hoped. You’ll be able to watch the florist arrange the bouquet, change your mind if you want, and replace wilting roses with fresh anemones.”
Verdict: Miss. Gates was right that the information highway would carry video, but he completely misread the social and economic factors that would shape its use in online commerce. How on earth would a harried florist find the time to hold a videoconference with every customer who orders flowers for Mother’s Day? What company would absorb the colossal expense of having orders changed at the last second according to customers’ shifting whims? Gates’s vision of online shopping has turned out to be a lot like past predictions about personal jet packs and moving sidewalks: a future that’s technologically possible but socially and economically impractical.

Videoconferencing
Prediction: “Small video devices using cameras attached to personal computers or television sets will allow us to meet readily across the information highway with much higher quality pictures and sound for lower prices.”
Verdict: Hit. What came to be called webcams are standard issue on PCs, or can be purchased from Bill Gates’s favorite company for under $30.

The Internet and the Web
Prediction: Gates’s 286-page book mentions the World Wide Web on only four of its pages, and portrays the Internet as a subset of a much a larger “Information Superhighway.” … Verdict: Miss. Gates’s notion that the Internet would play a supporting role in the information highway of the future, rather than being the highway itself, was out-of-date the day The Road Ahead was published… and he made major revisions to a second edition of The Road Ahead, adding material that highlighted the significance of the Internet. In many ways, Gates’s cloudy crystal ball regarding the Internet amounted to wishful thinking. Gates built Microsoft into a global powerhouse by selling proprietary software that users loaded onto their PCs. He wasn’t likely to warm to the idea that the same functions could be delivered cheaper and faster through a decentralized network that he couldn’t control.

Privacy
Predication: “A decade from now, you may shake your head that there was ever a time when any stranger or wrong number could interrupt you at home with a phone call. … by explicitly indicating allowable interruptions, you will be able to establish your home — or anywhere you choose — as your sanctuary.”
Verdict: Little Hit, Big Miss. It’s true that technology lets you explicitly indicate allowable interruptions — you can use caller ID to dodge unwanted calls or sign up at the National Do Not Call Registry to nix telemarketers. But the notion that technology would pave the way to greater privacy has turned out to be anything but true.

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The short-term future in South Africa is the Fifa Soccer World Cup, and at the moment it is really hard to get anyone to see or think beyond it. Football is life. Nevertheless a few hundred intrepid thinkers gathered in Cape Town earlier this month to consider South Africa in 2030, under the auspices of the World Future Society, South Africa Chapter, and its very capable leader Mike Lee.

I was lucky enough to be asked to do the opening address at the conference, and even luckier in that this Web site: South Africa – The Good News summarized some of what I and others said:

“Adam Gordon, Foresight Project Director and author of “Future Savvy” gave us some pointers:

1. Beware of sector experts, they are deeply entrenched in the present.
2. The consumer and choice is the determinant, not technology.
3. Change is about overestimating followed by underestimating.
4. Trends are patterns in the data, behind the trend are enablers and drivers, but frictional forces exist and in front of the trend are turners and blockers.
5. Trend extrapolation is limited, don’t fall foul of the turkey syndrome.
6. There is well behaved and badly behaved change. Both can be predictable and unpredictable. The potential of sudden shifts always lurks.
7. Scenario planning wraps up the key uncertainties over which we have no control.

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“The ‘BIG’ question he asks is ‘when do we influence the future and when do we adapt?’ There are big predictable forces out there (like population growth / the diminishing availability of oil etc), and there are big unpredictable forces out there (ja, well no fine!). Importantly, we can design our ability to influence and we can design the way we adapt. It is critical that we are able to do both.

“But managing the future is more than just about scenario planning, it is also about the implementation of the plan. It is about developing a methodology that prioritises, engages with stakeholders, and enables proactive actions on the ground.

So how?

Some important considerations (from various speakers):

1. Often we know what causes the problem (poverty, crime, HIV) but we don’t know what to do about it.
2. Often the logic that gives rise to the problem is not the logic that will solve the problem.
3. Mostly the problem does not contain the makings of the solution.
4. Solutions in one area can exacerbate problems in another.
5. The current situation has momentum, change to the system should happen concurrently not suddenly.

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“What is critical is the foresight process, it must be well-informed so that the implementation strategies that follow have buy-in, are doable, are relevant and far-reaching. There is a very real danger of visions being disconnected, unachievable and, at the end of the day, a pipe-dream.”

Dr Elizabeth Dostal talked of a stakeholder democracy in which she promoted the design of a matrix that recognised different stakeholder levels on the vertical axis and different environmental dimensions on the horizontal axis. A multi-level, multi-dimensional model.

“Imagine” she said, “putting four Nobel Peace laureates together and asking them what the causes of global conflict are. One may argue poverty, another ideology, another resources, and another greed. In no time, they would all be in different silo’s defending their view, in one sense they are all right, but in another sense they have not looked at the whole picture. A multi-level, multi-dimensional model would reveal this, the gaps in their logic, and the opportunities for agreement.”

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The strategy world has mourned the sudden passing of C.K. Prahalad, Professor of Business Administration at the Ross School, University of Michigan, this week.

Front page 'Competing for the Future' Hamel & Prahalad, HBR 1994

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As many have commented, Prahalad made great strides in getting business to see the potential in emerging markets and ‘poor’ consumers, in The Fortune at the Bottom of the Pyramid and allied work.

In our rush for the new and latest, early work often gets buried. So I would like, as my take on the passing of Prahalad, to go back to his fundamental testimony to the role of and need for foresight in management, which is to be found in his co-authored piece (with Gary Hamel) ‘Competing for the Future,’ Harvard Business Review, 1994, which became a very famous book of the same name. Sixteen years on and now in the wake of the credit crunch, this piece remains as relevant as it ever was:

“Ask yourself: Do senior managers in my company have a clear and shared understanding of how the industry may be different ten years from now? Is my company’ point of view about the future unique among competitors?

“On average managers devote less than 3% of their time building a corporate perspective on the future.

“The painful upheavals in so many companies in recent years reflect the failure of one-time industry leaders to keep up with the accelerating pace of industry change… Those companies were run by managers, not leaders, by maintenance engineers, not architects.

“If the future is not occupying senior managers, what is? Restructuring and reegineering. While both are legitimate and important tasks, they have more to do with shoring up today’s business than with building tomorrow’s industries. Any company that is a bystander on the road to the future will watch its structure, values, and skills become progressively less attuned to industry realities.

(therefore) “Most layoffs at large US companies have been the fault of managers who fell asleep at the wheel and missed the turnoff for the future.

“If senior executives don’t have reasonably detailed answers to the ‘future’ questions, and if the answers they have are not significantly different of the ‘today’ answers, there is little chance that their companies will remain market leaders.

“The Quest for Foresight: Why do we talk of foresight rather than vision? Vision connotes a dream or an apparition, and there is more to industry foresight than a blinding flash of insight. Industry foresight is based on deep insights into trends in technology, demographics, regulations, and lifestyles, which can be harnessed to rewrite industry rules and create new competitive space.”

Footnote: this from the FT: The last time CK spoke to the FT he was buzzing with intellectual energy. “Really, in all my career I have been interested in ‘next practices’, and not merely ‘best practices’,” he said.

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I couldn’t resist reposting this yesterday’s bit o’ fluff from the cleantech news portal Greenbang, itself reproduced from Forum for the Future, first, well because it cites yours truly; but even more agonizingly because the headline is exactly what I should have called Future Savvy if I knew the first thing about marketing, which I obviously don’t.

So may I say, this is what I was trying to say: When trying to predict the future, watch for dog poop!

Or perhaps: apparently helpful guides to the future are often dog poop disguised as chocolate, and here’s how to know the difference.

Something like that.

Note that this Greenbang story, below, is damaged by letting the most extreme predictions (the howlers) stand in for the general item. Prediction howler-spotting is sobering, but misses how many people got the future right, or right enough to make excellent decisions, and therefore overly damages the foresight field.

Also, howlers are actually the low-hanging fruit. Being future savvy is ultimately about the more subtle job of correcting weighing apparently very credible and well-founded predictions, some of which are excellent, but others of which are far flimsier than they appear.

There are various other minor problems such as not knowing the difference between the Gartner Hype Cycle and Zeitgeist bias, etc. And I would never call myself, not even in my most self-deprecating moments, a “futurologist.” But anyway, as I said, just a bit of fun:

Greenbang (13th April 2010) by Trish Lorenz & Martin Wright: Prediction is very difficult, especially about the future.” Niels Bohr’s words are a wise warning to reckless forecasters.

“Combining a nuclear reactor with a home boiler is no longer a problem. It would heat and cool the house, provide unlimited hot water and melt the snow from sidewalks and driveways. All that could be done for six years on a single charge of fissionable material costing about $300.” — Robert Ferry, US Institute of Boiler and Radiator Manufacturers, 1955

“Nuclear-powered vacuum cleaners will probably be a reality in ten years.” — Alex Lewyt, President of vacuum cleaner company Lewyt Corp, also 1955

Lewyt and Ferry both stumbled into a risky habit of all amateur futurists: extrapolating from present trends. In this case, they were caught up in the surge of excitement over the rise of nuclear power. They were not alone. In the tech-fuelled optimism of the ’50s, magazines, radio and the infant TV were buzzing with predictions of flying cars and lunar settlements.

They had fallen victim to what later became known as the Gartner Hype Cycle. This maps the enthusiasm and subsequent disillusionment typical in the introduction of new technology — a useful reality check for those caught up in “irrational optimism.”

By contrast, there are those whose feet are too firmly rooted in present realities, and fail to see how innovation can combine with social changes to speed the widespread adoption of new technology.

“The Americans need the telephone, but we do not. We have plenty of messenger boys.” — Sir William Preece, Chief Engineer, Royal Mail, 1878

“The horse is here to stay, but the automobile is only a novelty, a fad.” — President of the Michigan Savings Bank, advising Henry Ford’s lawyer not to invest in Ford Motors, 1903

It is difficult to consider any factor that doesn’t apparently exist at the time of making a prediction, but that’s essentially what looking ahead requires. It wasn’t all that long ago when people were predicting a bright future for teletext and fax machines. Few would have anticipated that both would be made almost obsolete by the internet and email. And yet the weak signals were there for those who chose to hear them. A fax machine, after all, is simply a modem with a rather complex print interface attached. It only evolved as it did because people were unused to reading information solely on screen, and computers were too big to carry around with them. Once laptops took off in the early ’90s, the fax was doomed.

“There is no reason why anyone would want a computer in their home.” — Ken Olson, Chairman, Digital Equipment Corp, 1977

Australian Senator Dr Russell Trood sums it up neatly when he says: ” ‘Nowism’ is a serious occupational hazard for those in the prediction game.”

Today’s futurologists no longer try to predict a single outcome for the future; instead they map a variety of scenarios. For Adam Gordon of Future Savvy, scenario-based thinking gives people “permission to think through alternative outcomes without necessarily predicting them.” Instead of trying to forecast precisely what might happen, he says, “we can ask ‘What if it does?,’ and then explore the outcomes and our responses.” Such thinking characterises much of the strategy adopted by forward-looking governments on tackling climate change.

James Goodman, head of Futures at Forum for the Future, agrees: “People think it’s the output that’s important, but actually it’s the process.” And, he adds, “All future planning has uncertainty at its heart.”

Or as Martin Raymond, Strategy and Insight Director at The Future Laboratory, says, “We always try to spot the dog
poop in our forecast.”

Greenbang Editor’s note: This was a guest article by Trish Lorenz and Martin Wright at Forum for the Future. This piece originally appeared in Green Futures, which is published by Forum for the Future and is the leading magazine on environmental solutions and sustainable futures. Its aim is to demonstrate that a sustainable future is both practical and desirable — and can be profitable, too.

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As of writing, Blockbuster clings to business life, with $1 billion in debt, unprofitable stores and continued losses, and it looks inevitable that it will file for bankruptcy protection. In Q4 ’09 the company posted a loss of $434.9m on revenue of $1.08bn. The stock price has fallen is $0.26 per share, down from lofty levels of over $15 in the early part of the decade. That’s a lot of shareholder value down the drain. *

Reading analysis by John Tamny in Forbes, I lighted on the following paragraph — as perfect an encapsulation of why looking to the future in timely and in a high-quality way is essential, and how quality horizon scanning is integral to it:

“As often happens as companies grow, Blockbuster concentrated on perfecting its existing service while beating competitors offering the same instead of looking into ways that outsiders might destroy its business model altogether… For Blockbuster, the “disrupter” in question was Netflix. Indeed, popular as the Blockbuster brand was, getting to the video store in order to take advantage of its services was a hassle for customers–as was returning videos on time to avoid paying late fees. The rise of Netflix from well outside the traditional retail space meant these problems were solved in one fell swoop.” (my italics)

Change that matters, that is, relatively sudden and acutely disruptive to incumbent business-model success, always comes from outside an industry. Britannica wasn’t beaten by another encyclopedia. Eastman Kodak was beaten by digital photo startups, not by Fuji. And so on, and so on, through industry failure, whether it leads merely to value hemorrhage or all the way to Chapter 11.

Looking vs seeing

Sure there are companies that lose because they are simply outcompeted, that is, are less capable than the competition in doing the same thing. Hertz is currently in this category. But when a clear market leader, with brand and capital and customers galore comes totally unstuck, it is always new technology and/or new business model coming from the outside that has done it. In these cases, as with Blockbuster, companies fall to industry entrants that change ways of doing things, solving pain or trade-offs that buyers suffer, or otherwise provide consumers with more value.

These are always, theoretically, innovations incumbents could have done themselves if they were ready to think ahead (and brave enough, when required, to cannabalize existing products that stood in the way of important future steps) and therein lies a conundrum about looking at new, external competitors. It’s seldom that the incumbent can’t see the intruder, that is, is not looking. Often they are looking intensively. It is that they don’t see the absolute disruption in the new until it is too late. It is a problem of perception. This is why industry horizon scanning is a little about the easy task of looking, and a lot about the much harder job of seeing. And why putting one’s corporate head down and making an existing product or service ‘more perfect’ is part of not seeing.

* Interestingly, the Blockbuster demise was called exactly right in November 2007 by Don Reisinger on CNET.

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