In the past year, writers of every stripe have concentrated on “back to normal, “the new normal,” and even “no normal.” They rightly point out that we must be nimble and seaworthy to adjust to the tempests of change.
What many fail to point out is that we also need to use disruption or instability as offensive weapons, and not shields against change.
Superforecasting is one of those armaments.
Writers of every stripe have concentrated on “back to normal, “the new normal,” and even “no normal.” They rightly point out that we must be nimble and seaworthy to adjust to the tempests of change. Click To Tweet
The Birth Of Unreliable Forecasting
Leaders who have proactively assumed the role of disruptors have learned to dramatically improve their organization’s forecasting skills. Often that wisdom was born of pain.
They have experienced just how unreliable their predictions, and the people making them, really were.
Frequently, the pandemic or a failed acquisition pulled back the curtain. Just as often the day-to-day processes of running a business distracted leader from their most important decisions. For example, Decisions regarding where the company will be in the future.
Why Did Your Calculated Risk Fail?
There are one of five things that usually explains why a failure to take a calculated risk occurs:
- Most people in most organizations can’t recite the company’s mission statement, and much less articulate an ideal future state for the organization.They don’t understand why a disruption should happen.
- Leaders lose sight of the macro, by concentrating too much on the micro. They have too much focus on tactics and activities and not enough on long-range goals.
- People have an exaggerated concern about short-term change instead of optimism about future gains or rewards. Leaders can develop a propensity to fix current symptoms (to problem-solve), which only restores circumstances to the status quo. Thus, ignoring innovative decision-making.
- Companies rely too heavily on big data and fail to hire those with big judgment. Those capable of superforecasting use data, logic, and analysis as the basis of their predictions, while they also gauge intangibles like biases, compatibility, and anticipated synergies.
- Research suggests that usually groups make better decisions than individuals working alone. Groups take more risk because no one person “owns” the decision, the benefits, or consequences of it.Yet, leaders often fail to assemble and utilize the talent they have.Sometimes they create an environment where groupthink can lead to flawed forecasting.
When we allow blind spots and pain points to delude us, we also permit organizational biases to inhibit our ability to discuss risk and failure. We trap value.
When this happens, groups facing uncertain conditions often engage in groupthink. This is a tendency for group members to suppress their objections (No matter how valid—and fall in line).
Groupthink happens most often when the leaders, internal or external, are overbearing or overly confident. These leaders inadvertently stand in the way of superforecasting. They also impede the group’s capacity to engage in logical predictions.
Individual and organizational biases explain why so many leaders overlook or misread ambiguous threats. Rather than mitigating risk, the leaders in these kinds of organizations incubate risk through normalization of deviance.
This is a term American sociologist Diane Vaughan used to describe the process by which deviance from productive behavior becomes normalized in a corporate culture.
When decision-makers learn to tolerate apparent minor failures or defects, they tend to treat early warning signs as false alarms. Rather than as alerts to imminent danger.
When we allow blind spots and pain points to delude us, we also permit organizational biases to inhibit our ability to discuss risk and failure—and we trap value. Click To Tweet
How To Avoid Failure
What can they do?
- Hire and promote for brains. Only those with the talent of discernment can engage in superforecasting.
- Learn from your mistakes.
- Repeatedly ask, “If we weren’t already doing this, would we now start?”
- Constantly ask, “What do I want to be different a year from now?”
- Determine what they want their legacy to be.
If disasters like a global pandemic can happen on a national or international level, what are the chances corporate leaders won’t experience them if they fail to forecast intentionally and intelligently?