The reality is, unless we’re in a groundbreaking technology startup (and if you are, you don’t have time to read this – go change the world some more, or check twitter), we don’t often have to truly predict the future. It’s only when we are setting strategy that we are asked to make significant decisions based on what we think the future will hold, and that’s pretty rare. So, it can be a bit nerve-wracking, especially in an uncertain or high-stakes environment, because we know prognosticators get it wrong more often than right. How can we manage that risk (and that anxiety) to make good decisions?
Obviously, futurists think about the future all the time, and one wrote an article in Fast Company a while back about three animal metaphors used frequently in talking about why our predictions about the future don’t usually hold – where the surprises come from. He was writing in the context of a broader approach to futurism, but more practical applications to strategy-setting show us how to build scenario-testing and future-proofing into our strategies.
It’s not just that these three animals may upset the futures we are trying to create – the question is, what do we do about that risk as we set strategy and implement it?
The first animal: the dragon.
At a certain point, our knowledge of the present fails us in talking about the future. We simply can’t know everything. The dragon represents the dangers of the unknown, the uncharted waters. But, as decision-makers, we can’t just say “beyond this there be dragons,” and throw up our hands, no matter how tempting that may sometimes be. For one thing, if it’s something we should or could know about it, go find out. We shouldn’t be afraid of the future full-stop. If we do the research and still can’t quite figure out if it’s a dragon or a sea monster or just a misidentified manatee, then we know what we need to keep an eye on, at least. Make a note to take another look once we’re a bit closer to the future – and compare what we see now with what we saw before.
The second animal: the black swan.
The black swan problem is the idea that there are some possibilities which are highly unlikely, but extremely significant if they do arise. Managing this risk requires us to decide what’s salient, what’s going to emerge. Successfully mitigating the risk of a black swan event is about managing the deluge of information and picking out what’s actually likely to be important. This requires the leadership to have regular strategic or future-oriented conversations, and also to systematically look beyond its own perspective. Bringing in a third party to take an objective look at your strategy can help as well; everyone has their own frame, sees different things as relevant or irrelevant, and finds different things interesting.Diversity of perspectives should be a habit of the organization.
The third animal: the Mule.
This refers to the event which was truly unpredictable – really, there weren’t signs there for us to anticipate it – but which makes our path much harder to follow. It bears repeating that the Mule is a rare beast indeed, but if it emerges, that means we have to be resilient. It’s the possibility of a Mule that spurs us on to build in good decision-making processes, business continuity plans, succession plans, brand equity, goodwill, and financial reserves. We can’t run things at the breaking point all the time. If a Mule were to emerge we would have to take action quickly, so the work we do to make our organizations responsive, effective and nimble will pay off then.
The good news is that, to mitigate the risk of all of these animals taking a bite out of our strategy, we don’t have to do anything that isn’t a good idea for other reasons:
- To guard against dragons, keep an eye out – check and see what’s a dragon and what’s not. Get comfortable with the idea that we don’t have all the answers yet but don’t let that keep you from making decisions.
- Black swans are a problem only if they’re unexpected – if we anticipate them, we can profit greatly from them. So make sure feedback systems are varied. And be willing to try new things based on the data we receive.
- And mules just remind us that prudent management can offer a lot of protection – and that keeping nimble is a good thing.
If you’d like to discuss the menagerie of animals you see in your future – and the implications on strategy-setting – please get in touch.