Winning by Default
(a Summary of October 14 Salon)
Prediction is about avoiding the unacceptable when the unacceptable is not readily foreseeable from the opinion of others or from personal experience.
How did you know?”
“I looked.”
“But why did you look?”
“Because I knew you wouldn’t.”
“But how did that make you right?”
“I didn’t have to be right, just more right than you.”
Peter Drucker said in a 1998 article[i] that the then on-going collapse of Asian markets was predictable a year in advance. You could see it clearly in various financial measures and statistics, he wrote, all of them widely available. In spite of this, most large companies were caught completely unawares.
What this business giant wrote wasn’t news to me. It was confirmation so I shouted with delight. I had 30 years in the trenches of workouts and turnarounds. I knew most were avoidable. To me Drucker confirmed:
That uneasiness of economic prediction, which depends on outside the firm data, is better than the relative certainty of decisions based on accepted opinion, memory and business experience. Know the times; get timing right.
“Yeah, but everybody knows you can’t time.”
“You mean we don’t take time.”
“The big guys missed it.”
“Then you feel better because you have company?”
“Well they can afford it. I can’t, don’t have time, don’t understand. It’s economics, statistics. You can get whatever answer you want. It’s speculation. I won’t do it anyway. How would I explain it? It will reduce profits. I got real problems to deal with ….”
“But?”
“What?”
“What are you going to do?”
Economic prediction isn’t a theoretical exercise by which management draws out a universal on the whole economy. Economic prediction is specific to a single company, to look at those things outside the firm capable of upsetting or accelerating its future results. The objective and the outcome is to make things a little easier and happen faster with better results.
[i] “Peter F. Drucker, “The Next Information Revolution.” Forbes ASAP, 24 Aug (1998), p. 47