Plans and predictions seem to be the number one control tools used by managers today. But it this a case of pseudo control that simply consumes resources with limited value add?
"If you can look into the seeds of time, and say which grain will grow and which will not, speak then unto me. " -William Shakespeare
Just as some organizations are revamping performance management ( Adobe, Accenture, DeLoitte,) so the time has come to question how it plans and predicts. This post drives right to the core of management today and begs the question whether the value of plans and predictions are overrated and outdated. Particularly the annual planning process that often leads to a huge waste of management and staff time.
All we ever experience is right now, right? We have memories of the past that appear to us in this moment. We have ideas and plans of the future that come to us in this moment. In addition, the circumstances of this moment continues to change.
We have concepts of how we can ensure a future we imagine. But how often do things pan out the way we planned? At times, the result may be approximately what we expected. Sometimes close, but rarely exactly, particularly not the way to the end result. At other times, unforeseen events may have completely taken our plans and their outcomes in a new direction.
"Those who have knowledge, don't predict. Those who predict, don't have knowledge. " -Lao Tzu, 6th Century BC Chinese Poet
Does “luck” – good or bad - have something to do with what is achieved in the end? What then is “luck”? A concept for something that we can not explain? Or an excuse for not having full knowledge (i.e. lack understanding of the business) of the various factors and variables that impact our plans and predictions?
In 1973 Princeton University professor Burton Malkiel wrote in his bestselling book, A Random Walk
Down Wall Street, that “A blindfolded monkey throwing darts at a newspaper’s financial pages could select a portfolio that would do just as well as one carefully selected by experts.” During the period 1973 to 2010, the monkey outperformed the index by an average of 1.7 percent per year.
This begs the question, will the same be achieved with or without a plan?
We strive so hard to develop the perfect plan that will deliver, or predict, a specific outcome. We plan, to the micro task level in an attempt to “make it happen”. We attempt to control what we think we have control of. But how much control do we really have when the factors and variables are not clear or randomly change?
I realize that what I have written above may seem a little philosophical. Truth is, having managed and coached hundreds of projects, business strategies, and tactical plans, I have observed that the final outcome very rarely delivers the original plan. I believe most individuals have experienced this too, however, we continue to measure performance against the original plan, even though we know circumstances will and do change.
So then why bother to plans and predictions? Management bases its entire existence on plans and predictions, and accordingly shuffling resources in an attempt to ensure a predefined result.
Even with sophisticated models we are unable to plan for the unpredictable. And when a model seems to perfectly predict and achieve a particular outcome, something changes and it almost instantly becomes obsolete. There are so many factors and variables that can influence the outcome. Things happen daily, whether in a small or mega way, that we have not foreseen.
Am I suggesting that we abandon planning and predicting completely? Nope, in the business world we will always require direction to optimize and align resources. I am simply suggesting that the time has come to find a more efficient and effective way.
For now, I believe that we need to turn to “agile” planning and predicting for that new direction. “Agile” implies continuous iterations of plans and predictions. Naturally, with such an approach one has to guard against abuse, or misuse, due to poor management. Rules and controls will need to be introduced.
As you ponder the above, here are some interesting “plans and predictions” quotes I have come across:
“Occurrences in this domain are beyond the reach of exact prediction because of the variety of factors in operation, not because of any lack of order in nature.” - Albert Einstein
"A good forecaster is not smarter than everyone else, he merely has his ignorance better organised. " –Anonymous
"The herd instinct among forecasters makes sheep look like independent thinkers. "--Edgar R. Fiedler in The Three Rs of Economic Forecasting-Irrational, Irrelevant and Irreverent , June 1977.
"I think there is a world market for maybe five computers." -- Thomas Watson (1874-1956), Chairman of IBM, 1943
"Who the hell wants to hear actors talk?" -- H. M. Warner (1881-1958), founder of Warner Brothers, in 1927
"Heavier-than-air flying machines are impossible." -- Lord Kelvin, President, Royal Society, 1895
"Everything that can be invented has been invented." -- Charles H. Duell, Commissioner, U.S. Office of Patents, 1899
"Inventions reached their limit long ago, and I see no hope for further development." -- Julius Frontinus, 1st century A.D.
"There is no reason anyone would want a computer in their home." -- Ken Olson, president, chairman and founder of Digital Equipment Corp., 1977
"This 'telephone' has too many shortcomings to be seriously considered as a means of communication. The device is inherently of no value to us." -- Western Union internal memo, 1876.
""The wireless music box has no imaginable commercial value. Who would pay for a message sent to nobody in particular?" -- David Sarnoff's associates in response to his urgings for investment in the radio in the 1920s.
"640K ought to be enough for anybody." -- Bill Gates (1955-), in 1981
"We don't like their sound, and guitar music is on the way out." -- Decca Recording Co. rejecting the Beatles, 1962
"I confess that in 1901, I said to my brother Orville that man would not fly for fifty years . . . Ever since, I have distrusted myself and avoided all predictions." -- Wilbur Wright, 1908