Crystal Balls & Time Machines: The Power of Forecasting


"The planning fallacy is that you make a plan, which is usually a best-case scenario. Then you assume that the outcome will follow your plan, even when you should know better." - Daniel Kahneman

Since the 1890s' Industrial Revolution, much of business has focused on scaling their operations through the most efficient methods - cutting costs, producing more, more quickly. To do so, managers have standardized every conceivable process along the way. They've exploited the least skilled of the workforce to perform the simplest of isolated tasks...ensuring the worker is as easily trained (and replaced!) as possible.

Do not misunderstand what I am saying. Some of these modern workers are highly educated and talented. They are also likely hyper-specialized. But what I am saying, is that it's possible that someone is trying to figure out how to replace you and me with something or someone cheaper or faster. Maybe a computer program, a robot, or a group of 12 year old boys in Indonesia.

Simply, if your job doesn't require you to consider the intangible uncertain future effects of your decisions, your employment is at stake. 

Standardization does work, as long as the conditions, inputs, and outputs are certain. There are functions that become more consistent, repeatable, and predictable when controlled by a checklist, flowchart, or technical process.

However, this race towards efficiency has a downside. It's stifled the creativity, adaptability, critical thinking, and decision-making of generations of our workforce and student body. 

We live and work in a world with growing uncertainty, change, and development. If not increasingly unpredictable, we are more aware and informed of the dynamic environment through data, social media, automated reports, and the like. This speed of change (or speed of recognition of change) requires thinkers who respond - through empowered decisions and actions. 

At the core of creativity, adaptability, critical thinking, and decision-making is FORECASTING. Forecasting is making predictions on the future:

  • For what potential changes or responses should I prepare?
  • What are the probabilities of each possible scenario?
  • Of the potential changes, what are the priorities?
  • How does this decision impact the short term? the long term?
  • What are the (multiple possible) effects of my decision?
  • Then, what are the second- or third-order consequences of my decision? 
  • Am I prepared for how my decision will impact the future?

I am an American police officer. As a training and policy consultant, I see firsthand how the law enforcement industry succumbs to the pressures and allure of standardization, rigid policy, and efficiency. Our training has its roots in the Taylorism of the assembly line. It's overly focused on the technical, mechanical, and digital aspects of physical performance. It's low on nurturing adaptive mental processes, critical thought, and decision-making. We issue unrealistic policy that removes the need for thought - and turns decisions into "if-then" responses or burdensome, inapplicable checklists. 

It's challenging for today's leaders and managers to accept that few workers operate in predictable "assembly line" environments anymore. It's been programmed in management schools to engineer tight tolerances, timelines, expectations, and contingencies for everything. However, the fight for efficiency is one that ignores individualized problems, diverse perspectives, artisan craftsmanship, and special opportunities. Simply, rules stifle creativity. Rules, standardization, and checklists require no forecasting or consideration for the future. All of the "thought" and decisions have been made ahead of time. Just follow the rules.

So why are we surprised, when a unique situation presents itself, at the lack of creativity and problem-solving in our people? We shouldn't be. We've always had a standardized policy in place to handle all other decisions! Right? When have we freed our people to actually....think? 

The solution is in growing our people into decision-makers, not merely policy followers. We must teach them HOW to think...not WHAT to think. 

This requires that our people understand how to forecast into the future. They need to become familiar with looking into the crystal ball, know what to look for, and anticipate change. We must get them to ask the above questions about cause-and-effect of their actions. Decision-makers have to understand how the future can "branch" into many possibilities, some branches being more likely than others. (Texas Hold 'Em poker players embrace this concept.)

We must also learn how to take a time machine back into the past to properly debrief or evaluate decisions. Decisions have to be evaluated on the information known or believed at the time...and what reasonable forecasting would/should have told us about the historical situation and non-linear possibilities. Using current information to critique a past decision is completely unfair. 
“Life can only be understood backwards; but it must be lived forwards.” - Søren Kierkegaard 
The last point, is that sometimes change happens so quickly, we cannot possibly forecast every possible alternative or option. Forecasting is also not about moving through questions in a list; it's a concept that considers what might or will likely happen in the future, and each possibility's impact. 

Few things in life are simple or certain. We need people who can navigate this complexity and uncertainty with a level of confidence. This confidence should be built upon a foundation of creativity, adaptability, critical thinking, and decision-making. All of which require looking into the crystal ball and taking trips in the time machine. Let's make sure our people have the skills and authority to do so. 

***

Lou Hayes, Jr. is a police training unit supervisor. He studies human performance, learning, and adaptive decision-making science. Follow him on Twitter at @LouHayesJr.

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