What’s Your Future?

We all have one. Some longer than others. Yet it is odd how little time most of us spend preparing for it, and how ill-conceived our preparations tend to be.

Our most typical mistake, as noted by researchers Daniel T. Gilbert and Jordi Quoidbach of Harvard,  and Timothy D. Wilson of the University of Virginia, is to see our future as an extension of our past. They call this the ‘end-of-history illusion’.    A recent article describing their research suggests why we so often fail in our thinking about our future, if we think about it at all. The article speaks to the personal level of experience. It cites a scientific study which concludes that at a personal level, we are more aware of the changes in ourselves that we have experienced than we are capable of anticipating the changes that are likely to evolve.  In other words, we appreciate how much we’ve changed, but tend to see our present state as static, and projected into the future. ‘Freeze-dried’, if you will. That truth on an individual level is also often the case at the organizational level, our strategic planning fetishes notwithstanding.  Kodak, Polaroid, the auto industry, the oil industry?

This difficulty, or perhaps reticence, to project our evolution as individuals is possibly attributable to a keen awareness of how rarely the future evolves as we expect.  We therefore decide not to invest personal energy charting a destiny that is beyond our control.

Organizations are more inclined to plan ahead as a matter of necessity, but are not necessarily much better than individuals in getting the future right. What is true of individuals is often true of organizations, with some variations on the theme. Although the mythology of modern management is based on the assumptions of pro-action, future-orientation, and anticipating where markets will be, in truth we are still very much wedded to our past, both in business and in government, and see the future in terms of what we know or may wish rather than what may be.

Even organizations that try to project a future different from the present, and invest heavily in its proactive execution fail to meet their objectives as often as not.  Exhibit A for this bold statement? The failure rate of corporate acquisitions; a prime strategic tool of ‘repositioning’ for the future. Also, the failure rate of new enterprises.

So, if we are so incapable of predicting, planning for and effectively executing to a future, why bother?  Is it possibly the case that we expect too much of planning, and perhaps the wrong result?

I will offer three reasons that I have observed for frequent failures in planning:

1.  The ‘experts’ who devise the plan build it on known historical precedents (consistent with the researchers’ observations of individuals).

2.   The organization devises a ‘blue sky’ scenario largely reflective of executive aspirations, and substantially ignorant of the existing organization’s capabilities to execute to it, or the challenges of creating a new organization from scratch.

3.   Management does not understand, or anticipate changes in the ‘market’ or the broader environmental context in which they are planning their specific future.

Experts in general, and planners specifically, often suffer from three flaws:

–  Their ‘expertise’ is founded largely on historical experience.

–  They are over-confident in that experience as a basis for projecting a future.

–  They are generally lousy at ‘anticipating’ the future.  (Note that I used the word ‘anticipating’ rather than predicting, in order to set a more reasonable bar.)

This leads us to the third item which is perhaps most challenging for individuals and for businesses for reasons noted by Prussian Field Marshal Helmuth Graf von Moltke, and oft cited by others: “No battle plan survives first contact with the enemy”.  In the battlefield of life, this recognizes the oft ignored truth that we do not exist and plan in a vacuum.  If our planning fails to anticipate and recognize the possible changes occurring around us by competitors, customers, suppliers, key facilitators, regulators, sundry stakeholders with often misunderstood influence, we are destined to fail. But knowing and incorporating the relevant changes in our environmental context is equally impossible (even for the NSA) so why bother, particularly long-range planning?

A plan is both a road map and a measuring device and should be used as such; not as a fixed blueprint of destiny.

Just as a map has mile markers and alternate routes that may be taken along an intended route, a plan should map decision points and contingencies as well as the preferred path to the primary destination. It should be a living document; not a fire-and-forget-until-next-planning-cycle document.

To cite an example when I was a finance director for a non-profit research and community service organization, we grew 300% over a three-year period through a variety of grants and contracts from a variety of sources in a very competitive academic and governmental market.  Each planning year, we began our year with a known operating deficit which was reflected in our budget.  We had obligations to staff specific grant requirements, and then had excess professional capacity which needed to be absorbed through entrepreneurial marketing to opportunities that would appear on the radar.   The recognized deficit was an unambiguous target in our plan, not obfuscated by aspirations. When opportunities arose, we would often have to adjust staffing assignments to align the right mix of expertise with the combination of grants and consulting contracts that would evolve.

The frequent changes in our budget in the course of the year would drive our auditor crazy, not because it was wrong, but because it was an uncharacteristic way of running a non-profit.  But we ultimately demonstrated to him that it was a proactive means of assuring that we met our grant and contract staffing accountability obligations, AND adjusted our resources to evolving circumstances.  The concept of flexible budgeting is now becoming more broadly accepted by more organizations as a replacement for the rigid annual exercise that is more ritual than management tool.

As a measurement tool, managements and individuals should not see deviations from plan  as indications of operational failure, though that may be the case. Deviations may be indicators of two other factors:  failure of the planning process to understand the operating context (factors and influences external to the organization which may be changing and unknown to the planning process); and failure in the planning process itself to incorporate internal and external information that is knowable. These deviations should be seen as indicators to drive positive change, and not as evidence to invoke an executive inquisition.

To understand and accept the limits of intelligent planning is the first step to making it an instructive and agile tool.  To regard it, as we too often do, as an inflexible mandate of unquestioned wisdom and authority is to condemn the organization to suffocation by stifling creative and innovative thinking.

A plan, whether for an individual or an organization, is a guide; not destiny.  Changing a plan that is not working is not a sign of failure, but of wisdom.

And the aphorism holds: ‘Those who fail to plan, plan to fail.’

Onward

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