The Business Weather

One of the quietest but biggest advances we have made in forecasting is the weather. A few years ago, forecasting accuracy was laughable beyond even a couple of days. Now, we can be pretty confident up to around five days, and get a useful, if less accurate predictions for up to a couple of weeks.

The difficulty comes of course from complexity. Chaos theory was triggered by the change in weather forecast accuracy caused by recording data at five rather than six decimal places. Driven by that realisation, and aided by huge advances in AI and machine learning, we are where we are today.

As the business environment becomes ever more connected, and as a result, ever more complex, we face similar challenges. Our ability to forecast is heavily foreshortened. We used to write five year plans; today five months is a challenge.

We have to adapt, and to do that I believe we need to look not to forecasting technology, but to ourselves. If we accept that our forecasts are at best short term templates, and not reliable, we have to look to how we relate to these forecasts.

If we stick to our traditional habit of making forecasts, setting goals, and going for them regardless we end up blind to the threats and opportunities that will emerge around us.

We need, above all else, to consider the human aspect. Hierarchies, formal processes, bureaucracies and the like do not serve us well. What becomes important are the depth and honesty of our relationships, a deep understanding and sensing of what is happening in the markets we serve, our agility – freedom to move with as little encumbrance as as we can manage; making sure those who need to make decisions – those at the customer interface – can do so without delay and lastly, a really clear focus, understood by all, as to what needs to be achieved.

If we do this, we can not only cope with complexity, but thrive on it. It requires though big changes in our cultures and structures. Old ideas of hierarchical status, rank and ego have to go, and purpose, ownership and personal commitment have to be central.

Things will not “go back to normal”.

We have to start. Each one of us.

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