Predicting the unpredictable
This article, written by Neil Mason, was originally published on Clickz.com and is republished here with permission.
As you’re reading this, probably, like me, you’re already wondering what 2009 might bring. At this time of year I often wish I had the attributes of the Roman god Janus (with his ability to look backwards and forwards at the same time.) It’s easy to look back and review a year, it’s harder to look forward and see what might be. Having said that, this time last year I wrote in this column “If I’m to make one more prediction for 2008, it would be that I don’t think it’s going to be a dull year!”. Sometimes you can wish that you were less prescient! It’s been anything but dull and for a lot of us this is the first time we are experiencing anything other than relative economic stability and growth.
If you’re in the forecasting business then what you are mostly doing is identifying patterns and extrapolating trends. What makes forecasting difficult is when you suffer “shocks” to the system that radically change the way that the “system” works. On our news at the moment we hear comments like “nobody anticipated this”, “these are unprecedented times” and so on. This makes it hard to extrapolate any trends because the trends have been broken or disrupted. We can only look back to the last time such events occurred (decades ago) and try and get some signals from all the noise. The problem is that looking back to the last occasions when our economy went into recession is also not likely to help much. Circumstances were very different back in the late 80s and early 90s. For a start, technology did not impact our lives in the same way and the internet was in its infancy. Fax and telex were still the primary forms of “immediate” communication. With such a difference in our technological capabilities what can we learn as marketers from previous recessionary environments? Probably not a lot.
The other difference is the scale of the problem. Historically one global economy might be in recession when others might be stable or in growth. Multi-national companies could play a “portfolio” game, managing losses in some markets whilst seeing compensating growth in others. This time round there are no safe harbours.
If there is one prediction I would make about 2009, it would be that 2009 is going to be unpredictable. The degree of turbulence and volatility means that it will be difficult to separate the signals from the noise. One result I think will be that planning horizons are going to get shorter, from years to months and from months to weeks. As a result of that, measurement cycles are going to get faster. In turbulent times people are going to want more frequent information and better insight delivered more quickly. Analytics and insight teams (if they still exist) are going to be under pressure to produce more goods of a higher quality with a faster turnaround. For organisations this has implications around the use of the human and technological resources they have at their disposal.
Whenever I write or talk about this subject, I always get the same mental image. It’s of a boat or yacht sailing in a storm. On a calm day you can see for miles ahead and you probably don’t need to check your maps and equipment that often. You have the time to plan and plot your course ahead and the navigator has time for a coffee break. In a storm you have to be much more reactive to the circumstances you find yourself in. You can’t see that far ahead and so you need to rely on your equipment to tell you where you are and what to do next. You need to quickly communicate your decisions to those around you and the navigator is chained to the desk.
Without hopefully running the risk of torturing the metaphor, I see it the same way for organisations heading into 2009. We know the storm is coming but we may not know exactly when or where or how bad it’s going to be. We don’t know exactly what the impact will be and so we can’t predict how we may need to react. But we do know that the storm is coming and so we need to get ourselves prepared. For analytics and insight teams now is the time to make sure that the technology is working properly, the data is sound and that the business processes are in place. If you’re in the right kind of organisation you’re going to be having a very busy, challenging but hopefully rewarding year.
May I take this opportunity to wish you all the best for 2009.