Future ‘Ain’t’ What It Used To Be: Here’s How To Prepare.

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Preparing for The Future

The Future ain’t what it used to be. What does this famous Yogi-ism mean for organizations today? Why predicting the future is so difficult? Why must we imagine different worlds? And what can an MMA fight teach us about the future? Read on to find out more.

Image by Liuzishan

Attention Economy

3,682 words | 14’43” reading time | 63/100 readability (better than NYT)

Editor’s Note

We have updated this article as of August 10, 2021. Here are the updates —

  • Recognizing the inherent difficulties in ‘removing’ cognitive biases, we now use the more pragmatic guideline — ‘Train to reduce.’
  • The ‘Screenshort’ and nutshell summary synthesize the principles of preparedness differently, highlighting the above point and the importance of cross-functional teams.
  • We have added two additional resources — one each on cognitive biases and superforecasting — to the section Free Your Mind to aid your thinking.
    • Though we have added the resource on superforecasting, our position on futures thinking is not about ‘forecasting’ or ‘predicting’ the future in a traditional sense.
    • Our position is to encourage organizations to imagine, and prepare for, different possible futures.
    • The resource is added as the techniques described are likely to be effective for our purposes as well.

“Ay! I’m not surprised Motherf…!”

Nate Diaz was pacing back and forth with intent, a mean look on his face. His opponent, ‘The Notorious’ Connor McGregor, was variously trying to get his attention, pointing to people outside the cage, and doing his pacing in ellipses.

The occasion — the main event at UFC 196, five 5-minute rounds of Mixed Martial Arts (MMA) actions. As Bruce Buffer, the longtime UFC announcer, started the proceedings that evening, the oddsmakers in Vegas sat comfortably in their hides.

Diaz was a +300 underdog to Connor McGregor, a -400 betting favorite. To brush you up on the odds, that meant you had to risk $400 of your money on a win for Mcgregor to win $100, whereas a $100 bet on a Diaz win would make you $300 profit. That’s how sure the bookies were.

Diaz entered the fight with a 19 – 10 record overall, 2 – 2 record at the agreed-upon weight class, welterweight, for that evening. After his last fight, which he had won, Diaz had refused to do the customary Octagon interview with color commentator Joe Rogan. Instead, Diaz had chosen to call out McGregor in a rant so profane, it is mostly a series of ‘beeps’ in the censored version.

It is one of the most-watched video snippets of all time in the MMA community. Diaz had fought after a significant lay-off period, and though he had won, no one had expected him to call out Connor McGregor, who at the time was on an unprecedented run.

McGregor had won 15 straight fights before he met Diaz. His MMA record stood at 19 – 2. He was coming off the fastest finish in a UFC title fight, defeating the famed Brazilian featherweight champion Jose Aldo — a brutal 13-second first-round knockout that ended Aldo’s 10-year win streak. Of McGregor’s 19 wins, 18 had been finishes, of which 17 had been knockout victories.

On the other hand, Diaz had missed weight in the bout before last and had lost that fight via a unanimous decision to Rafael Dos Anjos. Dos Anjos, another Brazilian, was McGregor’s original opponent at UFC 196. He had pulled out of the bout merely ten days ago due to an injury, and it is then that Diaz decided to enter the fray.

Diaz was now looking at a short-notice war against one of the best MMA fighters in the sport’s history who had famously told him at a promotional press conference, “You WILL be KO’d inside the first round.”

By this time, you have guessed the result of this fight, even if you have no context of what the hell I am talking about here. Joe Rogan interviewed Diaz in the Octagon after Diaz had submitted McGregor. Rogan said to him, “You just shook up the world,” and Diaz responded, casually, “Ay! I am not surprised, Motherf…!”

While this wasn’t the biggest upset in MMA from an odds perspective — for sure, the sport has seen fighters overcome far more challenging betting odds — Nate Diaz definitely “shook up the world” on March 05, 2016. He had McGregor tap out due to a rear-naked choke submission. The pundits hadn’t given him much of a chance, and neither had a lot of fans.

And even though I say these weren’t the biggest odds, they had still heavily favored McGregor that day in the MGM Grand Arena in Las Vegas.

How did the pundits, the oddsmakers, the dedicated fanbase, and McGregor get it so wrong?

Autopsy of an Interview

It turns out that correctly predicting the future is hard to do — a risky business prone to failure. “Thank You, Mr. Obvious,” I hear you say. But despite our predilections about ‘forecasts being wrong,’ it’s shocking how these fails litter history.

Just google, and you will find pages upon pages of these blunders — some laughably so in hindsight.

There’s no chance that the iPhone is going to get any significant market share. No chance.

Steve Ballmer at CEO Forum, 2007

Bad predictions especially pervade Technology and Product histories, even when the technology was already out there or agonizingly within grasp. Take Western Union’s rejection of the Telephone back in 1878 or Steve Ballmer’s famous dismissal of the iPhone in 2007 — more on this in a bit.

We fare much worse on things that we do not yet know or comprehend. Or (as in the case of our current global predicament), do not appreciate. And don’t even get me started on American Evangelism’s penchant for the end of the world every quarter.

That is what the Yogi-ism sitting atop this post is all about — the notorious difficulty of predicting the future. Paul Valéry, the French poet and philosopher, who originally coined the maxim in 1937, said — “we can no longer think of [the future] with any confidence in our inductions.”

That last line from Valéry speaks to why many predictions of the future fail — inductions or generalizations. One could loosely cast this in machine learning terms for a human context: induction bias, the set of assumptions used to predict outputs for never-before-encountered inputs.

We tend to think in frames developed from experience to adjudge new stimuli or think about new situations yet to arise. While those mental models bring order to the chaos of information, they can also burden us with the baggage of cognitive biases.

In this regard, it will be instructive to circle back to Steve Ballmer right about now. His infamous interview, in which he laughed off the iPhone, is a masterclass in what I am trying to say.

Ballmer Laughs at iPhone

Let’s do an autopsy of this interview statement-by-statement because it has several elements that hinder foresight. As you listen through the interview above, remember one thing — Blackberry.

“$500! Fully subsidized with a plan! I said that is the most expensive phone in the world, and it doesn’t appeal to business customers because it doesn’t have a keyboard which makes it not a very good email machine!”

Where do I begin?

He focuses on price first. At this time, Blackberry was around $350 retail ($199 with a plan). Motorola Q (that he evangelizes in this interview) was $99. An example of focusing bias if there was one.

And a perfect email machine should have a keyboard? Form-function attribution bias. And he talks about business customers — there’s no mention of retail consumers. That’s because he is wholly anchored here on Blackberry — that’s the competition in his mind because RIM had the largest market share after Symbian-based phones at that time. And their core business model — business customers.

Business customers using keyboard phones to send emails have hints of illusory correlation though I wouldn’t sign the affidavit on that. It’s more of Ballmer’s mere exposure of such devices that leads him to ascribe functional fixedness to this customers. They would soon prove him wrong.

The implicit assumption that iPhone prices will remain at $500 is a form of end-of-history illusion. Apple slashed it to $350 in September, two months after launch. In some version of our reality, Steve Jobs probably kept the initial price high as a subterfuge, adding several months to his already long head start.

“Now, it may sell very well or not. I, you know, we have our strategy. We’ve got great Windows mobile devices in the market today. We, you can get a Motorola Q phone now for $99. It’s a very capable machine. It will do music; it will do internet; it will do email; it will do instant messaging. So I kind of look at that, and I say, well, I like our strategy. I like it a lot.”

This whole love affair Ballmer has onscreen with Q here is cognitive entrenchment at many levels. Q was a Blackberry knock-off with the same QWERTY keyboard (that’s why it was named Q). It was a familiar Microsoft strategy from the 1990s. They copied the best in the business — the entrenchment of firm-specific design strategy (‘how we design stuff is how they design stuff’).

That phones must have a keyboard for consumer acceptance is the entrenchment of a product-specific design strategy (‘how is a phone designed? Like a PC but on your palm’). The evolution of computing from Mainframes to Desktops to Laptops entrenched this design strategy, as did the form factor of cellphones (‘a smartphone is a smart cellphone’).

It’s as if smartphone were a person and held this ethos about itself, thus mired in identity foreclosure. All in all, these factors led to Ballmer’s overestimation of the effectiveness of Microsoft’s strategy.

I know what you are thinking. It is easy for me to sit on my revolving chair and punch a few keys and sound the way I sound 14 years later. I agree. Hindsight IS 20/20.

But I am not passing judgment on Ballmer here — that’s not my intent. Better qualified people have already done that. I am merely pointing out some of the things that often drive predictions into the ground. It just happens to be a good case study.

“Right now, we are selling millions and millions and millions of phones a year. Apple is selling zero phones a year. In six months, they will have the most expensive phone by far in the marketplace and, let’s see. You know, what’s the expression? Let’s see how the competition goes.”

Ah, end-of-history, you elusive little somebitch, and overconfidence, your big bad brother. Verbally, Ballmer leaves the conversation on phones acknowledging the possibility of iPhone’s success, however remote. But his smirk betrays him. Later that same year, he completely trashed the iPhone at the CEO Forum organized by USA Today.

While this case study is by no means an exhaustive examination of everything that can go wrong in predicting future outcomes, at least one of the object lessons here is — solve for cognitive biases. Like most things in life, that’s easier said than done.

Discontinuities and the Zoology of Uncertainty

Until now, we have talked about the future in terms of predicting outcomes of events. That is, predictions about something we already know is happening. What about predicting the events themselves (e.g., the introduction of a disruptive product that will knock the air out of QWERTY phones)?

Predicting outcomes is a far simpler task compared to predicting events themselves. That is because we can reduce outcomes to a finite set of comparatives (‘What will happen at UFC 196 in the McGregor versus Diaz fight? McGregor wins? Diaz wins? Draw? No contest? Fight called off?’). Whereas in the realm of events, any number of events can occur. True, you can still devolve them into likelihoods — but not always.

Think about it. And as you think about it, use the Rumsfeld Matrix (or we can be sophisticated and call it the Johari Window of Uncertainty).

The Rumsfeld Matrix | Source

  1. Known Knowns

Things we know. Facts. Widely recognized elements of history. Processes with (relatively) low uncertainty. E.g., quality defects in a six-sigma process. These could also be the widely known White Elephants, challenging to get rid of or resolve. Think of the longstanding conflicts of the world — Kashmir, Palestine, Sudan, et cetera. Also note these conflicts have the potential to spiral into Unknown Knowns on the back of adventurism from involved parties.

  1. Known Unknowns

Things we know can happen but can’t control at the current time (or maybe forever). E.g., weather delays, earthquakes in the Pacific Ring of Fire, Donald Trump. They may be predictable to a certain degree. Dragon-kings would fall under this category of the Johari Window.

  1. Unknown Knowns

One acronym and a number — COVID 19. We have known about coronaviruses for a long time. We have had coronavirus outbreaks several times. There were warnings about possible pandemics, just like Churchill had warned about the Nazis. People had made bets about it. To no avail. Unknown Knowns are Michelle Wucker‘s Gray Rhinos, the Black Elephants, the slow boiling pots where we are the frogs. Most of them can be Known Knowns if only we listen or communicate, or as Adam Grant would put it, rethink.

  1. Unknown Unknowns

Taleb’s Black Swans.

As you can imagine, given the framework above, one can’t always assign actionable likelihoods to events. Some of them can be genuine discontinuities, providing a complete break between the world before and after. Such events make for a more uncertain world. Here’s a taste in retrospective —

World Uncertainty Index due to Ahir, H, N Bllom, and D Furceri (2018), Stanford mimeo

How, then, can we hope to do anything about the discontinuities? The answers may be as old as our history with fire.

Fighting Fire with Fire

Kindel Media on Pexels.com

Think about a bonfire and the activities around it. Be it the dances, the songs, the gossip, or the quiet, our affair with fire, beyond food and safety, boils down to two things — storytelling and fire gazing.

Let’s meditate on this.

What’s the first story you remember?

The first story that I remember is my mother telling me to be cautious of the dark because ‘ta-ta,’ the all-purpose unimaginable big bad, lived there. She taught me the same thing about things that were generally hot, or sharp, or harmful in any other way to a curious baby. So the next time I encountered ‘ta-ta,’ I was ready.

Well, almost.

I once hit my forehead on a stone cabinet built into a wall of our rented home when I was about three. It split my head open. I stopped banging my head against the wall after that.

Of course, stories became more complex as time went on. Some had discernible morals; others were just fantasies. But the best ones always evoked a sense of immersion and created frames that I could superimpose on events around me. I would wager something similar has happened with you. Indeed the fireside stories, chats, and gossips of our ancestors are a common attribute of all cultures.

Now let’s think about fire gazing, or meditating a journey to your happy place, trying to find shapes in clouds, thinking about that tasty treat you like so much that your mouth starts to water, or imagining entire worlds as you tell tall tales, or hear or read them.

Stories and fire gazing are ultimately simulations. And there’s a neurological imperative for simulations, whether told through tales or meditated upon as internal world-building. The neural launchpad of decisions and actions in our brain is the same network that drives simulation.

Lisa Feldman Barrett, the controversial psychologist, and neuroscientist writes, “Simply put, if you don’t simulate a threat, you won’t take steps to avoid it.” The same applies, conversely, to embracing opportunities. Therein lies the need to simulate different possible futures.

In their longstanding embrace of wargaming, simulations, and planning scenarios, armed forces and military intelligence across the world have shown acuity around Dr. Barrett’s view above — albeit in an organizational context. After all, they are in the business of threat deterrence.

These practices have spilled over in areas of public policy and business and continue to evolve. Many of us are familiar with the work of Pierre Wack and the course that Royal Dutch Shell has continued since his time.

Whether it be archaeological excavations of the future, speculating narratives from scents, building worlds from games, prototyping the future from science fiction, or contemplating scenarios for a sustainable world, futures thinking has gained from fire.

The rules of the discipline continue to evolve, as do its various methods. Juries will be out on the effectiveness of these approaches as they too may carry the contagion of cognitive bias or the difficulty of translating narratives to portfolios of actionable strategy.

However, they provide method(s) to the madness by recognizing the fundamental interconnectedness of things and systems thinking via world-building.

COVID has pushed organizations further towards greater in the wake of the fires the future may hold. At the very least, the need to engender the right organizational characteristics is clear. What are these characteristics? The main event at UFC 196 may provide a framework.

“Always be Ready”

We can perform an autopsy of McGregor’s performance against Nate Diaz at UFC 196. However, as we saw before, hindsight is 20/20.

Instead, let’s focus on one analyst’s narrative of this match-up, stated between the time Nate Diaz started his walk towards the Octagon and the 30-second mark in the first round of the bout (ending at the 12-minute mark in the video above). Anticipation, not hindsight.

This analyst, the color commentator Joe Rogan, expressed a healthy disregard for a foregone conclusion at the main event of UFC 196. He asked himself how Diaz may cause problems for McGregor. By doing so, he opened his mind and imagined a world where Diaz may not only test McGregor, but may very well beat him. In effect, what he did was to solve for cognitive biases in thinking about the future.

Rogan listed the reasons why Diaz would be the toughest test for McGregor. The relevant extracts are below. If you do not follow MMA, don’t worry about all the fighters’ names or the MMA disciplines. I will distill the insights for you at the end of this section.

“Nate Diaz, in my opinion, is gonna be the most difficult test of Connor McGregor’s career for a bunch of reasons. First of all, because Nate Diaz is long, he is long and tall, and he has outstanding boxing. When you look at this last fight against Michael Johnson, he has clearly improved. He has clearly got some of the best boxing in the 155-pound division. Michael Johnson is a very good striker, and Nate Diaz is boxing him up.

You look at his performance against Gray Maynard. You look at some of his previous fights, and you see the length in the boxing that he possesses, and it causes everyone problems.

You also have to consider his submission abilities. He is a legitimate black belt in Brazilian Jiu-Jitsu at a very high level. Talking about a guy who submitted Jim Miller, a guy that submitted Kurt Pellegrino. He is legit in every aspect. He is not gonna be shaken. He is not gonna get rattled. He is not gonna get dwarfed by the moment. He won the Ultimate Fighter Season 5 back in 2007. So this dude’s been around.

“He took this fight on 11 days’ notice, but an important point is that he was training for a triathlon, and he is in excellent shape.”

“And there is one thing we also should consider, and that is the wrestling of Nate Diaz, which is very underrated. His submission game is very, very highly respected.”

Let’s distill these comments further, shall we?

Elite, best-in-class competencies in multiple disciplines: Boxing, Brazilian Jiu-Jitsu, Wrestling

Battle Tested: “So this dude’s been around.” (Not mentioned in the narrative is the number of times Diaz fought all rounds of a fight in his career until that point — this translates to his immense experience with adversity, overcoming it many times. See Rogan’s comment on this about McGregor below)

Battle Ready: “He is in excellent shape.” Many other things are floating around in the background -— Diaz’s diet, quality of his training partners, et cetera. By his admission, Diaz is “always in shape.”

Situation Awareness: In the post-fight interview, Diaz says, “I am always in shape but, uh, if I am not in the best shape I gotta start slow and pick up as I go. […] I started out slow, but I am faster than everybody. But I gotta pick up; I gotta warm up.”* He then says about submitting McGregor by setting up the move using his boxing, “My Jiu-Jitsu is always there when [competitors] hit the ground, but it’s always from the boxing.”

*More on this — slow is smooth, smooth is fast — in a future post.

Here’s Joe Rogan on McGregor —

“What we haven’t seen from him, though, is overcoming adversity. […] We have not seen him in trouble, we have not seen him rocked, we have not seen him tested. We also have not seen him fight a guy who is as long and as slick with his boxing as Nate Diaz.”

It is worth noting that McGregor, too, accepted the fight on short notice. As mentioned in the beginning, he was preparing for a completely different fighter in Rafael Dos Anjos. When we began, I asked how McGregor could be so wrong about his performance. That is an easier puzzle to solve.

Of course, McGregor predicted a first-round KO win for himself. No fighter goes into a fight thinking about losing. They will mentally simulate the win over and over again. But winning in a specific scenario unfolding inside the octagon depends on the factors we just enumerated in favor of Diaz. Luck may also play a role, however large or small.

We believe these factors can be understood along two critical dimensions when translated for consideration of future-proof organizations —

Multiple Response Strategies
Wargaming, scenario thinking, and experience hone these responses. Much like MMA, situational awareness comes attached with these strategies — i.e., when to deploy what strategy.

Cross-functional Competencies
Mastering competencies required to deploy all strategies in the response portfolio and the capability to mix them up. It also entails readiness through the proper redundancies.

[Italics added on August 10, 2021]

One might be tempted to think about these interdisciplinary skills in individuals. That’s all well and good insofar as every organization can recruit polymath geniuses. The more pragmatic view here is to nurture teams at the cross-section of different disciplines.

MMA looks like an individual sport and, inside the Octagon, it is indeed an individual sport. However, successful preparation takes a team. There’s the fighter of course. But you gotta have coaches in different disciplines like wrestling, boxing, Brazilian jiu-jitsu et cetera.

The analogy here is that the organization is the fighter. Preparation takes an interdisciplinary team.

There’s one additional factor that we must iterate regarding Nate Diaz. He invented his future when he called out McGregor two months before this fight. He was mentally ready despite the lack of a complete training camp. He says as much in the post-fight interview.

I’m an athlete, a warrior. We should always be ready to fight everybody on our worst day.

Nate Diaz

Well said, Sir!

Futures and The Strategist: What’s Next?

A few things have emerged from our discussions in this article. Let me summarize these organizational preparedness principles for reference —

  1. Train Teams to Reduce Cognitive Biases when thinking about the future;
  2. Simulate Different Possible Futures to overcome cognitive biases;
  3. Develop Multiple Response Strategies based on different possible futures; and,
  4. Nurture Interdisciplinary Teams to develop response strategies

These are the starting points. There isn’t any discussion of the ‘how’ of these yet. An actionable framework for founders, leaders, and innovators has to be built. For this reason, Futures is one of the six keystone exploration areas here at The Strategist.

The activities we will undertake now will explore the discipline of Futures Thinking together with venerable experts of the field — compiling, building, validating and correcting the thinking.

Stay tuned for those developments! In the meantime, free your mind!

Free Your Mind

Before you go, here are two videos and two articles that we believe will free your mind and get you in the groove.

The Videos

MIT on Scenario Planning (drives home the point on why the future ain’t what it used to be)

TED Talk by the venerable Anab Jain (clearly explains why we must imagine different futures)

The Articles

Hope you enjoy these resources.

Until next time!

The Strategist