By
Christophe Pelletier
A question that I am being regularly asked is whether I have a crystal ball.
Although I believe that it is more of a nice icebreaker than actually a question. There is a bit of a fascination in all of us about the idea that someone may actually be able to see into the future and tell others what is coming their way.
If it were indeed possible, it certainly would reduce uncertainty but it also would make life quite a bit less exciting. Sorry to kill some of the mystique but foresight is not about crystal balls, cards or goat’s insides. Unfortunately, there is no magic in trying to identify likely futures scenarios.
Actually, the percentage of accurate predictions is rather disappointing. I heard recently of an American survey that estimated the accuracy level of predictions by economists currently stands at 47 percent; one of my colleagues even joked about this by saying if you flip a coin your predictions will be statistically higher by three points.
The stock exchange in Amsterdam used to be famous by asking an ape to pick the top five stocks for the year and it repeatedly beat the analysts’ consensus.
Mistakes to avoid when envisioning the future
In my opinion, there are a couple of mistakes –or pitfalls- to avoid when trying to envision the future. Trying to achieve an excess of accuracy is one of them, especially by trying to give hard figures.
Numbers always tend to give a sense of precision and security, but all too often they do not mean much if they are not backed by a strong scenario. It is quite likely that you all have witnessed predictions on prices falling flat when the deadline arrived.
Sometimes, the surprise is a good one, sometimes it is not, but the fact is that the prediction was inaccurate. Generally, the cause for this is a scenario built on too many variables for which there is little, if any, control. Assumptions become more prevalent than facts.
Another mistake is to carry out a survey on today’s situation without projecting it in the future. When the plan based on such a survey is implemented, the environment has evolved and the conclusions of the survey are no longer valid.
It may sound obvious, but I am always surprised to see how often a research ends up writing the present in the future tense and call it the future, always causing painful disappointment later on.
Read the full article HERE.
A question that I am being regularly asked is whether I have a crystal ball.
 |
| Christophe Palletier |
Although I believe that it is more of a nice icebreaker than actually a question. There is a bit of a fascination in all of us about the idea that someone may actually be able to see into the future and tell others what is coming their way.
If it were indeed possible, it certainly would reduce uncertainty but it also would make life quite a bit less exciting. Sorry to kill some of the mystique but foresight is not about crystal balls, cards or goat’s insides. Unfortunately, there is no magic in trying to identify likely futures scenarios.
Actually, the percentage of accurate predictions is rather disappointing. I heard recently of an American survey that estimated the accuracy level of predictions by economists currently stands at 47 percent; one of my colleagues even joked about this by saying if you flip a coin your predictions will be statistically higher by three points.
The stock exchange in Amsterdam used to be famous by asking an ape to pick the top five stocks for the year and it repeatedly beat the analysts’ consensus.
Mistakes to avoid when envisioning the future
In my opinion, there are a couple of mistakes –or pitfalls- to avoid when trying to envision the future. Trying to achieve an excess of accuracy is one of them, especially by trying to give hard figures.
Numbers always tend to give a sense of precision and security, but all too often they do not mean much if they are not backed by a strong scenario. It is quite likely that you all have witnessed predictions on prices falling flat when the deadline arrived.
Sometimes, the surprise is a good one, sometimes it is not, but the fact is that the prediction was inaccurate. Generally, the cause for this is a scenario built on too many variables for which there is little, if any, control. Assumptions become more prevalent than facts.
Another mistake is to carry out a survey on today’s situation without projecting it in the future. When the plan based on such a survey is implemented, the environment has evolved and the conclusions of the survey are no longer valid.
It may sound obvious, but I am always surprised to see how often a research ends up writing the present in the future tense and call it the future, always causing painful disappointment later on.
Read the full article HERE.
The Global Miller
This blog is maintained by The Global Miller staff and is supported by the magazine GFMT
which is published by Perendale Publishers Limited.
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