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.

Heft

I find it an attractive word. With its origin in Anglo Saxon, it is normally used in terms of weight, or effort but there is another very specific use in terms of animals and people, hefted, which is used to describe the relationship between them and the land they live on. Hefted flocks are those that are so inextricably linked with the land they live on that they cannot be relocated.

In the past, up until the industrial revolution, most of us were hefted to where we were born. A function of generations past living on the same land, and the interdependent relationships that developed, we were woven into where we lived. The movement of people from economic necessity as the economy moved from agrarian to industrial broke that bond for most of us.

I came across the term in “The Shepherd’s Life” by James Rebanks. A beautifully written account of life in the Lake District through the eyes of one remarkable man, it opens with definitions of hefted, and goes on to recount how it defines his life and the society of which he is part.

What struck me most was perhaps what we have lost. When our families lost that hefted relationship with the land they lived on, what did they cling to? Rebanks doesn’t mention purpose or values right until the end of the book, and then only in terms of discovering the power of what was already present. The society of which he is part didn’t have to go looking for them, they were part of who they are, and released through their everyday work. I suspect the idea that you might have to define purpose or make a values statement would be ridiculous to them

So, in our modern day search for purpose and values, perhaps we are starting at the wrong end. Maybe we discover our purpose and values by what we don’t do as we work our way through life (and sometimes from what we do and later regret). Maybe we are born with purpose and have our values inculcated whilst very young, only to risk losing sight of them as we allow ourselves to be shaped by the expectations of others.

And equally, perhaps the same is true of the businesses we start. They are rarely started for money, but rather in an attempt to bring something into being. The primacy of money comes later, in the involvement of others and normally at a point when we have enough money from a degree of success to meet or reasonable needs. I’m not talking millions.

I suspect one definition of hell is the realisation of the impact on others of decisions we may have made in the pursuit of money we don’t really need.

When it comes to how we live and work, I suspect those who are happiest are hefted to something important, even if they cannot articulate precisely what it is. It shows up in how they live their lives and deal with others.

Processing speed

Concentrating on how fast we process data is a dangerous and unhealthy trap. Rather like fast food, we don’t consider what we’re consuming, and fall foul of the carb rush.

Instant gratification.

We’re entering (if not already in) an era where processing faster is ceasing to be an advantage. Except, maybe on trading floors, where milliseconds enables us to take advantage in a passing, temporary trade. It doesn’t add any real value to the stock being traded.

In areas of rather more substance, the data is valuable but partial. It will tell us where we’ve been (though maybe not why), but is a poor indicator for anything other than the very short term of where we’re headed.

Like the carb rush though, it’s as addictive as it is unhealthy.

Data is great for those judged on their operational strategy. Lots of numbers, comparisons, forecast returns. We become seduced and blinded by the beauty of the numbers, and judge the strategy at speed. Read the executive summary, maybe scan the rest. Compare the numbers to alternative offerings, Judge. Move on.

The foundation of strategy though does not lie in the numbers. It lies in awareness, purpose, spirit, relationships, agility, imagination, reflection. All qualitative, not easily measurable, yet vital.

The reason that the vast majority of operations strategies fail is because they are not grounded in these softer qualities. A fast food diet with little real sustenance.

I find it a sobering thought that most of the stuff of operational strategy is moving towards algorithms. Much better than us flaky humans at analysing history and projecting it forward and removing the extraneous, outlying data that is the harbinger of change, but not renowned for it’s imagination or thoughtful questioning.

The qualities that will define lasting success in the next era will be our ability to think, reflect and imagine. If we don’t make time for that, as individuals and organisations, we’re likely to have the useful lifespan of fast food packaging.