Leaders ought to prioritize foresight over predictive forecasting.
The allure of New Year forecasts is like catnip for business leaders. And who can blame them? In today's rapidly changing business world, managers are constantly seeking ways to stay ahead of the competition. But the truth is, no one truly knows what lies ahead, as evidenced by the frequent failure of predictions. However, despite the fallacy of prediction, the desire to forecast has led to a more valuable pursuit: anticipation.
For the uninitiated, anticipation is a strategic planning approach where organizations gather information about potential futures to develop long-term visions for the business. Unlike traditional forecasting, anticipation doesn't aim to predict a single, definitive future, such as predicting next quarter's sales or the rise of a specific trend. Instead, it explores multiple possible scenarios, helping leaders navigate the uncertainty of a dynamic marketplace with confidence.
But that's not the only difference between predictions and anticipation. Predictions are based on the assumption that past behavior is the best indicator of future behavior. This belief is held by many scholars, from Albert Ellis to Walter Michel and B.F. Skinner. This idea puts too much emphasis on what people have done to gauge what they will do.
Given modern leaders' insatiable appetite for data and seemingly endless access to it, prediction through data analytics is an appealing proposition. Who wouldn't want the benefits of a glimpse into the future, especially if you're already spending a small fortune on data?
On the other hand, anticipation offers a more comprehensive, contextualized understanding of the present to better understand the possibilities of the future. Anticipation involves scanning the horizon for emerging trends, analyzing potential scenarios, and considering the implications of various outcomes based on our understanding of present cultural norms. Prediction focuses on the past to see the future; anticipation relies on its ability to contextualize the present to prepare for a range of future scenarios.
Take Pinterest, for example. The visual discovery platform released its annual Pinterest Predictions report earlier this month, a glimpse into emerging trends for the upcoming year. According to a LinkedIn post from the global chief marketing and communications officer at Pinterest, Andréa Mallard, 80% of Pinterest's predictions over the past five years have come true. That's impressive. But what's the secret behind their uncanny accuracy? It's not magic—it's an understanding of culture.
Pinterest Predictions leverages billions of Pinterest search queries to spot emerging patterns across the platform. This use of historical data would be enough to predict a future trend. But the Pinterest report doesn't stop there; it curates these patterns into trends and actively collaborates with people to better understand how an inclusive community interprets these trends. That is to say, Pinterest captures a wealth of data and culturally translates it into something more meaningful.
From this methodology, Pinterest produces twenty future trends that provide twenty different possibilities for what lies ahead. The plurality of this endeavor shifts the mindset of managers from a single prediction—a big bet, if you will—to a multiverse of potential realities based on a deep cultural understanding of the present. Pinterest may call them "predictions," but in fact, they are (by definition) anticipations.
Essentially, anticipation transforms the manager's role from fortune-teller to cultural anthropologist, decoding the complex tapestry of the present to guide the brand through the ever-changing business environment of tomorrow. Here, the goal isn't to predict the future accurately, as that is an impossible ambition—as articulated by Nassim Taleb's Black Swan theory, which argues that the most impactful events are hardly ever predictable. Rather, the goal is to glean a rich enough understanding of the present to prepare for multiple potential outcomes.
This reframe challenges our reliance on historical data alone and introduces cultural insight as a mediator to see different permutations of what could be. The key to doing so is moving beyond thinking about people as data points and seeing them as cultural beings shaped by shared experiences, beliefs, and social conventions. Seeing them as such illuminates the peculiar nuances of social living and mitigates the hubris that managers can reduce their dynamism into the singularity of a prediction.
As we move into another year of what will surely present increasing complexities and fragmentations in the marketplace, the ability to anticipate and navigate cultural shifts will become even more challenging for business leaders (that's not a prediction, by the way). Those who can successfully blend the insights extracted from historical data with a keen sense of cultural intelligence will find themselves not trying to predict future trends as much as they are actively trying to shape the cultural conversations of tomorrow.
As the late great management scholar Peter Drucker once said, "The best way to predict the future is to create it." With anticipation, we are better equipped to do just that, starting with a profound understanding of the here and now.
- In their strategic planning, many organizations turn to anticipation, a method that utilizes data analytics to gather information about potential futures and develop long-term visions, moving beyond straightforward predictions.
- Pinterest's annual Pinterest Predictions report, released this month, is a prime example of data-driven predictions, but it goes further by curating patterns and collaborating with the community to translate cultural trends into meaningful insights.
- In the realm of business forecasts, the Black Swan theory by Nassim Taleb highlights the unpredictability of the most impactful events, encouraging managers to focus on preparing for multiple potential outcomes instead of relying on single predictions.
- To achieve this, leaders should shift their perspective from viewing people as data points to recognizing them as cultural beings shaped by shared experiences, beliefs, and social conventions, fostering a more nuanced understanding of social living.
- As we approach the new year with growing marketplace complexities, those who can effectively blend data insights with cultural intelligence will not just predict trends but actively shape the cultural conversations of the future, following Peter Drucker's wisdom, "The best way to predict the future is to create it."
