Which is useful–trend spotting or market planning?
Q: We just ended the first round of our Corporate Strategic Planning for 2014. As far back as anyone of us can remember, every time we do this three-day retreat, we start with two or three one-hour-and-a-half sessions on scanning three to four future business environments. They’re basically exercises in predicting the future.
We usually have a prominent economist giving us a session about what to expect of the economy the following year. We also invite a political analyst to give us next year’s likely political and social scenario. We don’t have a technological trend speaker because the head of our IT department is a leading tech authority and professor.
Some three or four years ago, we attended your seminar on market foresighting. That was about how to have “a better than chance” success at predicting next year’s economic, political and social conditions that our business will face. This way, you said our marketing planning would be based on more realistic assumptions.
You also said then that once you have ten or more client applications, you will verify how true or false those foresighted market predictions are. We wanted to attend this year’s offering of that seminar to learn about your validation. But the seminar was no longer in your lineup of offerings. And this is why we’re writing. Please share with us your validation results and tell us how really useful to our marketing planning those expensive market trend spotting sessions.
A: Our validation is an on-going process. This is not to say though that we won’t respond to your request.
We start with these two clarifications. First, the more unpredictable the future is, the greater the risk of wrong prediction. This implies that you should distinguish among three kinds of future: (1) the highly unpredictable, near-zero visibility future, (2) the predictable, near-20-20 visibility future, and (3) the about 50 percent-visibility future.
Here’s our second clarification and proposition. The further in the future you wish to predict, the more likely that your prediction will be off the mark.
Let’s relate this to your practice of immediate 1-year term planning, medium 3- to 5-year term, and long 10-year term. We don’t do anymore 5-, 10-, 20-year long-term planning. They all were a waste.
Let’s tackle the most difficult. That’s the case of the “highly unpredictable, near-zero visibility and 5-to-10-years-from-now” kind of future. It’s for this case where this Hebrew aphorism applies: “Man plans for tomorrow, and God howls with laughter.” Judging by the unabated growing practice of medium-term and long-term planning, we must say that many of our colleagues still dare to play futurist when it comes to predicting even the future that’s highly unpredictable and near-zero visibility.
The French chemist, Louie Pasteur, is often cited to have said that when it comes to predicting the unpredictable “chance favors the prepared.” But prepare for exactly what? It’s the Lebanese statistician, Nassim Taleb, who wrote an entire book to answer this question. It was a 2007 best-selling book, The Black Swan: the Impact of the Highly Improbable.
In a previous MRx column, we had the occasion to mention Taleb and his Black Swan. But that was for a different purpose. As to managing the unpredictable future, according to Taleb, if you cannot predict the unpredictable it’s a waste of time and effort to keep on predicting. Instead, Taleb says, give your time to preparing. Be a Boy Scout.
So back to our question: prepare for what? Prepare for the consequences of what happens should the unpredictable take place. Consequences are easier to know. That’s because all unpredictables have had precedents. They all happened before. What’s hard, often impossible to know, is when and how the highly unpredictable will happen.
There are two basic kinds of the highly unpredictable. There’s the “positive unpredictable” and the “negative unpredictable.” When a positive unpredictable future occurs its consequences are beneficial.
A good example is the case of Arnel Pineda and his discovery by the American rock band, Journey.
As a poor and homeless street kid who knows he had an exceptional singing voice, Arnel, at 15 years old, landed in 1982 a job as the lead singer of Ijos Band at Shakey’s Taft. It was then that Arnel knew what he wanted. That’s to win in big singing contests in Asia so that he’ll become known in the region and eventually in the world. So in 1986, he joined the Amo Band that entered and won in the Rock Wars contest. In 1988, Arnel entered and won the Philippine leg of the Yamaha World Band Explosion. In 1990, he again entered the Yamaha World Band Explosion and won the Best Vocalist award. That same year, Arnel decided to move to Hong Kong and sang six times a week at the popular entertainment restaurant, Grammy’s. That work pace was just too much. In 1994, Arnel had a serious health problem that almost cost him his voice. He returned to the Philippines and spent six months to recuperate. After this, Arnel went back to singing and in 1999, caught attention when Warner Bros. recorded an Arnel solo album where one song, “Iiyak Ka Rin,” became Asia’s Karaoke favorite. At the same time, another Arnel song, “Sayang,” became a radio favorite.
Twenty years after 1982, from 2001 to 2005, Arnel persisted. He wrote, arranged and recorded more theme songs. Then in 2006, he joined a new band, Zoo, where he performed Journey’s cover songs. Arnel placed those songs in YouTube where they gained more and more online visitors. Then the highly unpredictable happened. On June 28, 2007, Neal Schon of Journey who was scouting for a replacement of the band’s lost lead singer, saw Arnel’s rendition of Journey’s songs, liked what he saw and heard, contacted Arnel, auditioned him in August 12 and on Dec. 5, 2007 signed him and announced Arnel as Journey’s lead singer.
So how did Arnel prepare for that highly but positive unpredictable? From all that he did and persisted to do over 25 years, Arnel simply maximized his exposures so that the chance of his getting discovered would have a high likelihood of happening. And it finally did. That’s the kind of preparation to undertake for a highly but positive unpredictable.
What about for a highly but negative unpredictable? We’ve run out of space. We’ll get into that in next Friday’s MRx column.
Keep your questions coming. Send them to us at [email protected] or [email protected]. God bless!
