Friday, September 30, 2011

Looking backwards into an uncertain future

It's budget time in our business; time to look to an open future and dare to put some numbers up against it.

When it comes to prognosticating about tomorrow's joys or woes, our society's mainstream media seems to have an obsession with two social sciences: psychology and economics. It is the psychologists with their analysis of human behaviour, and the economists with their analysis of financial trends that become the prophets.

We seem to draw comfort from putting numbers on the future -- especially when faced with great uncertainty. Those numbers seem to have additional value to us if they are accompanied by either $ or %.

One of the ways that we do this is to look to the past. We examine past trends. And then we play with some 'But what if?' market scenarios, and offer our picture of the future.

A future that is bequeathed to us from analysis of the past fails dismally to serve us well. A public educator captured the heart of it when he said to me in an email last week: "It always amazes me ... that we turn to economists to help us determine what tomorrow's world will be like (if they really knew then why are they so wrong so often?)"

Analysis is most useful for telling us something about where we are, or have been. But looking backwards is a very limited tool for moving us forward. I'm not talking about being attuned to the ebb-and-flow of history -- even economic history -- but I am wrestling with the idea the economists aren't particularly good prophets, and that if their vision of the future becomes our vision of the future it is quite an impoverished (pun intended) picture to be carried forward by.

We started going through our numbers yesterday. You can see how stimulating it was for one team member who was already feeling a bit under the weather:

When you sit down to forecast budgets for the coming year, it is important to look back at past customers ('The best source of new business is old business') and buying trends. But there is a profound feeling of helplessness about casting numbers into the future.

It is one reason that it has been so good to be part of a business that has chosen to not reduce its picture of the future simply into a set of numbers. That would be crushing.

The future is more than a set of backwards-oriented numbers -- though they have a place in the dialogue (and so we have our budgets for 2012).

The conversation around budgets works smarter when we are having conversations about the possibilities for the future (and not simply about $$$), what our clients are aspiring to, and what sort of future they are imagining. Then we become engaged as 'authors', not simply as 'readers' of past numbers and trends.

We can speak to an open future with more intelligence (and hope) if we reframe our conversations around 'design' questions (complemented by a rich anthropology and some good, road-tested business sense). This then provides a context for good economic commentary, instead of having economics as the frame, and the supposed 'all-seeing eye'.

And before I sign off this morning: TB, we'll miss you. You have been a valued team player. DJ was right when he said last night that you have 'honed your craft'. You are a craftsman, mate. We cannot speak of the strengths of our business without talking about what you have given to it. We'll miss you. A lot. Go well, and with our blessing.

No comments: