Everything I’ve Ever Learnt About The Future

Here’s a prediction. You are reading this because you believe that it’s important to have a sense of what’s coming next.

Or perhaps you believe that since disruptive events are becoming more frequent you need more warning about potential game-changers, although at the same time you’re frustrated by the unstructured nature of futures thinking.

Foresight is usually defined as the act of seeing or looking forward – or to be in some way forewarned about future events. In the context of science, it can be interpreted as an awareness of the latest discoveries and where these may lead, while in business it’s generally connected with an ability to think through longer-term opportunities and risks be these technological, geopolitical, economic, or environmental.

But how does one use foresight? What practical tools are available for individuals to stay one step ahead and to deal with potential pivots?

The answer to this depends on your state of mind.

In short, if alongside an ability to focus on the here and now you have – or can develop – a culture that’s furiously curious, intellectually promiscuous, self-doubting, and meddlesome you are likely to be far more effective at foresight than if you doggedly stick to a single idea or worldview. This is because the future is rarely a logical extension of single ideas or conditions.

Furthermore, even when it looks as though this may be so, everything from totally unexpected events, feedback loops, behavioural change, pricing, taxation, and regulation have a habit of tripping up even the best-prepared plans.

Looking both ways

In other words, when it comes to the future most people aren’t really thinking, they are just being logical based on small sets of recent data or personal experience. The future is inherently unpredictable, but this gives us a clue as to how best to deal with it. If you accept – and how can you not – that the future is uncertain, then you must accept that there will always be numerous ways in which the future could play out. Developing a prudent, practical, pluralistic mind-set that’s not narrow, self-assured, fixated, or over-invested in any singular outcome or future is therefore a wise move.

This is similar in some respects to the scientific method, which seeks new knowledge based upon the formulation, testing, and subsequent modification of a hypothesis.

Not blindly accepting conventional wisdom, being questioning and self-critical, looking for opposing forces, seeking out disagreement and above all being open to disagreements and anomalies are all ways of ensuring agility and most of all resilience in what is becoming an increasingly febrile and inconstant world.

This is all much easier said than done, of course. Homo sapiens are a pattern seeing species and two of the things we loathe are randomness and uncertainty. We are therefore drawn to forceful personalities with apparent expertise who build narrative arcs from a subjective selection of so-called facts. Critically, such narratives can force linkages between events that are unrelated or ignore important factors.

Seeking singular drivers of change or maintaining a simple positive or negative attitude toward any new scientific, technological, economic, or political development is therefore easier than constantly looking for complex interactions or erecting a barrier of scepticism about ideas that almost everyone else appears to agree upon or accept without question.

Danger: hidden assumptions

In this context a systems approach to thinking can pay dividends. In a globalised, hyper-connected world, few things exist in isolation and one of the main reasons that long-term planning can go so spectacularly wrong is the oversimplification of complex systems and relationships.

Another major factor is assumption, especially the hidden assumptions about how industries or technologies will evolve or how individuals will behave in relation to new ideas or events. The hysteria about Peak Oil might be a case in point.  Putting to one side the natural assumption that we’ll need oil in the future, the amount of oil that’s available depends upon its price. If the price is high there’s more incentive to discover and extract more oil especially, as it turned out, shale oil.

A high oil price also fuels the search for alternative energy sources, but also incentivises behavioural change at both an individual and governmental level.  It’s not an equal and opposite reaction, but the dynamic tensions inherent within powerful forces means that balancing forces do often appear over time.

Thus, we should always think in terms of technology plus psychology, or one factor combined with others.  In this context, one should also consider wildcards. These are forces that appear out of nowhere or which blindside us because we’ve discounted their importance.

Similarly, it can often be useful to think in terms of future and past. History gives us clues about how people have behaved before and may behave again. Therefore, it’s often worth travelling backwards to explore the history of industries, products, or technologies before travelling forwards.

If hidden assumptions, the extrapolation of recent experience, and the interplay of multiple factors are three traps, cognitive biases are a fourth. The human brain is a marvellous thing, but too often tricks us into believing that something that’s personal or subjective is objective reality. For example, unless you are aware of confirmation bias it’s difficult to unmake your mind once it’s made up.

Once you have formed an idea about something – or someone – your conscious mind will seek out data to confirm your view, while your subconscious will block anything that contradicts it. This is why couples argue, why companies steadfastly refuse to evolve their strategy and why countries accidently go to war. Confirmation bias also explains why we persistently think that things we have experienced recently will continue.  Similar biases mean that we stick to strategies long after they should have been abandoned (loss aversion) or fail to see things that are hidden in plain sight (inattentional blindness).

In 2013, a study in the US called the Good Judgement Project asked 20,000 people to forecast a series of geopolitical events. One of their key findings was that an understanding of these natural biases produced better predictions. An understanding of probabilities was also shown to be of benefit as was working as part of a team where a broad range of options and opinions were discussed.

You must be aware of another bias – Group Think – in this context, but if you are aware of the power of consensus you can at least work to offset its negative aspects.

Being aware of how people relate to one another also recalls the thought that being a good forecaster doesn’t only mean being good at forecasts. Forecasts are no good unless someone is listening and is prepared to act.

Thinking about who is and who is not invested in certain outcomes – especially the status quo – can improve the odds when it comes to being heard. What you say is important, but so too is whom you speak to and how you illustrate your argument, especially in organisations that are more aligned to the world as it is than the world as it could become.

Steve Sasson, the Kodak engineer who invented the world’s first digital camera in 1975 showed his invention to Kodak’s management and their reaction allegedly was: ‘That’s cute, but don’t tell anyone.”  Eventually Kodak commissioned research, the conclusion of which was that digital photography could be disruptive.

However, it also said that Kodak would have a decade to prepare for any transition. This was all Kodak needed to hear to ignore it. It wasn’t digital photography per se that killed Kodak, but the emergence of photo-sharing and of group think that equated photography with printing, but the result was much the same.

Good forecasters are good at getting other peoples’ attention using narratives or visual representations. Just look at the power of science fiction, especially movies, versus that of white papers or power point presentations.

If the engineers at Kodak had persisted or had brought to life changing customer attitudes and behaviours using vivid storytelling – or perhaps photographs or film – things might have developed rather differently.

Find out what you don’t know.

Beyond thinking about your own thinking and thinking through whom you speak to and how you illustrate your argument, what else can you do to avoid being caught on the wrong side of history? According to Michael Laynor at Deloitte Research, strategy should begin with an assessment of what you don’t know, not with what you do. This is reminiscent of Donald Rumsfeld’s infamous ‘unknown unknowns’ speech.

“Reports that say that something hasn’t happened are always interesting to me, because as we know, there are known knowns; there are things we know we know. We also know there are known unknowns; we know there are some things we do not know. But there are also unknown unknowns – the ones we don’t know we don’t know….”

The language that’s used here is tortured, but it does fit with the viewpoint of several leading futurists including Paul Saffo at the Institute for the Future. Saffo has argued that one of the key goals of forecasting is to map uncertainties.

What forecasting is about is uncovering hidden patterns and unexamined assumptions, which may signal significant revenue opportunities or threats in the future.

Hence the primary aim of forecasting is not to precisely predict, but to fully identify a range of possible outcomes, which includes elements and ideas that people haven’t previously known about, taken seriously or fully considered.

The most useful starter question in this context is: ‘What’s next?’ but forecasters must not stop there. They must also ask: ‘So what?’ and consider the full range of ‘What if?’

Consider the improbable

A key point here is to distinguish between what’s probable, and what’s possible. (See Introducing the 4Ps post).

Sherlock Holmes said that: “Once you eliminate the impossible, whatever remains, no matter how improbable, must be the truth.” This statement is applicable to forecasting because it is important to understand that improbability does not imply impossibility. Most scenarios about the future consider an expected or probable future and then move on to include other possible futures. But unless improbable futures are also considered significant opportunities or vulnerabilities will remain unseen.

This is all potentially moving us into the territory of risks rather than foresight, but both are connected. Foresight can be used to identify commercial opportunities, but it is equally applicable to due diligence or the hedging of risk. Unfortunately, this thought is lost on many corporations and governments who shy away from such long-term thinking or assume that new developments will follow a simple straight line.  What invariably happens though is that change tends to follow an S Curve and developments tend to change direction when counterforces inevitably emerge.

Knowing precisely when a trend will bend is almost impossible but keeping in mind that many will is itself useful knowledge.

The Hype Cycle developed by Gartner Research is also helpful in this respect because it helps us to separate recent developments or fads (the noise) from deeper or longer-term forces (the signal). The Gartner model links to another important point too, which is that because we often fail to see broad context, we tend to simplify.

This means that we ignore market inertia and consequently overestimate or hype the importance of events in the shorter term, whilst simultaneously underestimating their importance over much longer timespans.

An example of this tendency is the home computer. In the 1980s, most industry observers were forecasting a Personal Computer in every home. They were right, but this took much longer than expected and, more importantly, we are not using our home computers for word processing or to view CDs as predicted. Instead, we are carrying mobile computers everywhere, which is driving universal connectivity, the Internet of Things, smart sensors, big data, predictive analytics, which are in turn changing our homes, our cities, our minds and much else besides.

Drilling down into the bedrock to reveal the real why.

What else can you do to see the future early? One trick is to ask what’s behind recent developments. What are the deep technological, regulatory of behavioural drivers of change? But don’t stop there.

Dig down beyond the shifting sands of popular trends to uncover the hidden bedrock upon which new developments are being built. Then balance this out against the degree of associated uncertainty.

Other tips might include travelling to parts of the world that are in some way ahead technologically or socially. If you wish to study the trajectory of ageing, for instance, Japan is a good place to start. This is because Japan is the fastest ageing country on earth and consequently has been curious about robotics longer than most. Japan is already running out of humans and is looking to use robots to replace people in various roles ranging from kindergartens to aged care.

You can just read about such things, of course. New Scientist, Scientific American, MIT Technology Review, The Economist Technology Quarterly are all ways to reduce your travel budget, but seeing things with your own eyes tends to be more effective. Speaking with early adopters (often, but not exclusively younger people) is useful too as is spending time with heavy or highly enthusiastic users of products and services.  

Academia is a useful laboratory for futures thinking too, as are the writings of some science fiction authors. And, of course, these two worlds can collide. It is perhaps no coincidence that the sci-fi author HG Wells studied science or that many of the most successful sci-fi writers, such as Isaac Asimov and Arthur C. Clarke, have scientific backgrounds.

So, find out what’s going on within certain academic institutions, especially those focussed on science and technology, and familiarise yourself with the themes the best science-fiction writers are speculating about.

Will doing any or all these things allow you to see the future in any truly useful sense? The answer to this depends upon what it is that you are trying to achieve. If you aim is to get the future 100% correct, then you’ll be 100% disappointed. However, if you aim is to highlight possible directions and discuss potential drivers of change there’s a very good chance that you won’t be 100% wrong. Thinking about the distant future is inherently problematic, but if you spend enough time doing so it will almost certainly beat not thinking about the future at all.

Creating the time to peer at the distant horizon can result in something far more valuable than prediction too. Our inclination to relate discussions about the future to the present means that the more time we spend thinking about future the more we will think about whether what we are doing right now is correct. Perhaps this is the true value of forecasting: It allows us to see the present with greater clarity and precision.

Richard Watson April 2023. richard@nowandnext.com

Quote of the week

“No plan of operations reaches with any certainty beyond the first encounter with the enemy’s main force” (Helmuth von Moltke, Prussina military commander, 1880).

Or another version….

“Everyone has a plan, until they get punched in the mouth” (Mike Tyson, former World Heavyweight boxing champion).

Inevitable Surprises

I don’t know if this will ever make it into a book, but I wrote this over a year ago and given what’s happening with Brexit it’s perhaps worth putting out there…

Chapter 1: Thinking straight

“If we could first know where we are and whither we are tending, we could better judge what to do and how to do it. – Abraham Lincoln.

Slowly wind back your mind. To the 23rd June 2016 at 9.00am to be exact. You may have no idea what you were doing on this day, but I think I know what you were thinking, especially if you were living in Europe. I think you were thinking “Yes!”, “No!” or “WTF!!!”

23rd June 2016 was the day that the world woke up to the news that Britain had decided to leave the EU. I was giving a lecture to the leadership team of a bank, and from what I can recall, it was like herding cats in thick fog in the middle of a zombie apocalypse.

The bankers had been caught unawares. They were shocked that Britain had voted to leave. I was shocked that they were shocked. Honestly, had this not always been a yes or no vote? Had there not been two possibilities? I could understand that the decision hadn’t gone the way they’d wanted or expected, but total dead-eyed disorientated disbelief?  We will never know exactly what was in these peoples’ heads, but I have a suspicion that the answer to their collective confusion might have been down to a heavy dollop of group think served with a light sprinkling of confirmation bias.

One big problem with achieving even a homeopathic level of success can be that one develops an enduring capacity to believe that your thinking is always correct, that the way you see the world is the same as any other right-thinking person would. Why bother really thinking about anything if you already know the answer? This situation is not helped by education systems that tend to teach that there is one correct answer. Exams generally teach us that things are true or false. They don’t teach maybe or that things depend on other related and frequently fluid factors.

This self-centred certainty, can result in major disagreements between individuals, but also in thinking that’s there’s no need for deep thinking. This tendency can work inside large organisations too. The more successful an organisation becomes the more blasé´ it gets about self-evident ‘truths’ and you can end up with a pyramid of egos, all convinced of their righteousness and all certain that there is little need to look at things differently. Even when due consideration occurs it tends it be short-term and reactive, not long-term and reflective.

There are endless away-days, strategy days and take your shoes off to be more creative days, but these rarely ponder beyond the next 18 months (36-months if you’re very lucky) or question fundamentals (or fundamental questions). Even CEOs, who are supposed to spend a great deal of time thinking about the long view, can get sucked into daily distractions and find it difficult to fix an appointment with themselves to just think.

Hence, what I’d term the unthinking organisation. Such organisations can be likened to reanimated corpses. These are zombie-like organisations that wander around in a mindless manner sinking their teeth into anyone with a different opinion or a free mind.

They are dead from the neck up, although they still manage to have a highly efficient immune system that forcefully rejects any alien thought or new idea. Maybe it’s why the average lifespan of an S&P 500 company in the US has fallen from 67 years in the 1920s to just 15 years today and why 75 per cent of firms in the S&P 500 now will be gone – or going – by the year 2027. These figures come from a study by Richard Foster at the Yale School of Management and echo a similar study from the Santa Fe Institute that found publically quoted firms in the US die at similar rates regardless of age or industry sector.

In the UK, it’s a similarly skeletal story. Of the 100 companies in the FTSE 100 in 1984, only 24 were still breathing in 2012. Nothing recedes like success or so it seems. Why do organisations behave like this? (why do they die like this?). I think it’s because they think they think, but they don’t really. Their thinking is largely tactical and bounded by conventional wisdom. It’s largely about plucking some numbers out of the sky and then working backwards to explain how these numbers will come into being. This can work well for a while, a long while in some instances, but if the wider operating environment becomes complex, volatile and ambiguous it’s usually only a matter of time before what used to work doesn’t any longer. These organisations then get ambushed by what is happening outside of them: specifically, new technologies, new competitors, new business models, new economics, shifting social attitudes and behaviours and geopolitical change.

Why aren’t large organisations in particular more open minded? Some are. The Ministry of Defence in the UK and the Department of Defence in the US both ponder the imponderable, not because they will necessary be 100% right, but because they don’t want to be 100% wrong. Reducing magnitudes of error in combat can literally save lives. But most large organisations don’t do this. They are like super-tankers approaching an iceberg. Having finally decided that an object on the radar is indeed an iceberg, there’s a long discussion on the bridge about the need to turn and at what speed and in which direction. But then it takes ages for the ship to actually turn. It’s all very well talk about organisations ‘pivoting’ but my experience is that most are incapable. The only organisations that can and do change direction rapidly are small start-ups, where again it’s often a matter of life and death.

Exhibit one: Group Think. This idea was first put forward by Yale psychologist Irving Janis in 1973 and sought to explain why groups of smart people often make terrible decisions. The problem, as he saw it, is that groups tend to seek solidarity, harmony and consensus and work actively to supress any form of dissent. This is the main reason, I believe, that the bank mentioned earlier failed to see the possibility of Brexit occurring.

Exhibit two: Confirmation Bias. Groups can display collective confirmation bias, but the term is best applied to individuals and describes the way in which people tend to favour information, data (and individuals) that broadly reflect what they already think or believe.

In other words, we all inhabit echo chambers where our views, opinions and strongly held beliefs are reflected back to us and go unchallenged. Social media has made this far worse, amplifying what used to be a local phenomenon into a global one. Because both these biases, but especially confirmation bias, operate at a subconscious level, blocking any incoming information from reaching our conscious minds, it’s hard to be aware of what’s going on, let alone make allowance for it. In a sense, none of this stupidity is our fault.

To give the bank credit, I understand that they had made mild preparations for a ‘no’ vote in the referendum, but even so it was fascinating to observe how group think, in particular, played out.  The bank was based in London. Everyone, more or less, lived close to the capital. Most of the people these people knew also worked and lived near London and probably thought more or less like they did. It was essentially a self-referencing group.

So how might the leadership team have challenged their own thinking? One way might have been to widen their intelligence gathering operations. I imagine that most read publications such as The Banker and probably the Economist (but doubtfully all of it). Probably the Financial Times too. Had they read The Sun or watched Daytime television or listened to talk radio they might have thought differently. Better still, perhaps they could have left their dozy desks and visited some of their own branches outside London.

Speaking directly to staff, and especially to customers, rather than relying on research reports and the media, (the latter again largely located in and focussed on London) may have opened their eyes to the idea that some people thought that local identity might trump global economics. Interestingly, it could be argued that both Brexit and Trump are connected to something else people can’t see, namely ageing populations. The problem here, once again, is that most organisations are staffed by people in their 20s, 30s, 40s and 50s and it’s hard for them to imagine what’s in the heads of people in their 60s, 70s, 80s and 90s.

So, my lecture wasn’t going quite as expected. But then, to make matters worse, I suggested that Britain might not leave the EU. At this point the leadership team probably decided that I was certifiable. Had we not just voted to go? So how could we possibly stay? Are you nuts? But, of course, impossible is often a matter of opinion. One distinguishing feature of the future is precisely that it’s so vague. It’s always a moving target too. Anyone that thinks otherwise will eventually get run over by reality. In almost any instance you can imagine, there’s always more than one way things can turn out. It’s usually about probabilities, not inevitabilities, but even here we tend to be hopeless at judging the odds.

Not to be continued (as far as I can see).

Map of Global Mega Trends

Here you go then. Use this link to get to a high resolution version. A3, A1 and rather wonderful AO sized copies on paper are available upon request (no charge except for print, post and a cardbaord tube). See you in the future.

Strategy Conversation Cards

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Long-time readers may remember that as well as maps I have a thing for cards. I’ve previously helped to create a set of cards for PWC to help CFOs discuss the distant future and I also created a set, along with Oliver Freeman, for Public Libraries New South Wales in Australia. I also have a set of Oblique Strategies cards from Brian Eno and Peter Schmidt along with various vintage playing game games.

My latest collaboration is with Tech Foresight at Imperial College with whom I’ve created a set of conversation cards aimed at people in R&D, horizon scanners and people engaged in foresight activities. In this instance there are 64 cards from four categories – cities, resources, data and workforce – along with five wildcards or jokers. The point of the pack is again to stimulate discussion about alternative futures. The cards are still in beta and there aren’t may sets around currently, but if you’d like a set they are available at cost, which is £30 plus postage.

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Weak signals

 

There’s some disagreement about what the term ‘weak signal’ represents in terms of emerging trends or scenario thinking, but I like to think of them as hidden or ambiguous signals of change. In my view weak signals generally represent a change of direction for existing attitudes or behaviour, but they can also represent early indications of totally new ideas or events.

The image above is silly but significant. To many people coins are a pain in the pocket. They are heavy and dirty and somewhat outdated in the digital age. There was even a report a while back that in the US it now costs more than one cent to make one cent due to the cost of the metal. I suspect small coins will be more or less dead in many parts of the world within ten years. Larger coins within twenty. However, I suspect that paper notes will endure far longer, partly for the same reasons that paper newspapers, paper books and paper itself have lasted so long.

Quote of the week

 

 

 

 

 

 

Sorry, time has flown. End of the day and no post so here’s a quick quote.

“We always overestimate the change that will occur in the next two years and underestimate the change that will occur in the next ten. Don’t let yourself be lulled into inaction.” – Bill Gates

That last line is important, although in my view inaction can be a very good thing. Much of what we think is important now won’t be when the future finally shows up. I’d say the trick is not to always feel compelled to react to what’s happening right now. If we overestimate the change that will occur in the next two years and underestimate the change that will occur in the next ten, then we obviously need to spend more time thinking about the next ten. This reminds me of a book called Present Shock, but more on that tomorrow perhaps.

Strategic foresight

 

 

 

 

 

 

 

 

 

 

 

 

 

I was in Cambridge today talking about the benefits of long-term planning. It went well apart from the fact that I was speaking at 9.30 am and most of the audience had been in the bar until 4.00 am the previous night.

Anyway, what I totally forgot to mention, which would have been such a perfect example of forward thinking, was the story (allegedly true, but easily an urban myth) of New College Oxford. After the giant oak beams in the College’s great hall rotted away, the Dons of the college were at a total loss to source some replacement oak timbers of a large enough size. Apparently the dons asked if the College owned any land that could be sold to buy some timber. Well it turned out they did. Not only that, when New College was built, 500 years ago, the Dons had arranged for some oaks to be planted on the land and they were now of sufficient size to be used for the new beams. Now that’s what I call strategic foresight!

Of course the question is did the college then plant some acorns so that the beams could be repaired again in another 500 years.