Season of Prophecies, Forecasts, and PredictionsWe made it through yet another doomsday prediction! The world did not end on December 21 as some felt the Mayan calendar predicted. Around the world interest in survival pods, underground bunkers, and one-way tickets to “apocalypse safe havens” soared as D-Day approached. You should be able to pick up a Mayan calendar at half price now!

Wikipedia has a fascinating list of dates predicted for apocalyptic events that starts at 643 BCE and runs through hundreds of end-of-times predictions over the centuries. The last entry is that Mayan apocalypse prophesying the earth will be destroyed by an asteroid or supernova. And just so we don’t get too secure, there are a few future predictions showing dates for the Second Coming of Jesus, Armageddon, and other end-of-the-world events.

‘Tis the season for futurists, forecasters, and analysts to line up with seers, fortune tellers, and prophets to earnestly foretell what 2013 has in store for us. Instead of tea leaves, animal entrails, and crystal balls, the “experts” use data, charts, and logical sounding theories. See New Year’s Prediction Alert: It’s Silly Season Again! for an entertaining Timeline of Failed Predictions.

Harvard Business School professor, James Heskett, poses the right question in his blog Should Managers Bother Listening to Predictions? He points to all the uncertainty swirling around us today and observes, “we’ve always been certain about two things: (1) predictions are never accurate, and (2) plans are obsolete the moment they are made.”

In providing provocative perspectives on this challenge, Heskett draws from three books on the folly of predictions, how some predictions can be made more accurate, and how to gain from disorder. He ends with, “given our inability to predict, should managers bother to base plans on predictions?” Dozens of thoughtful reader comments follow with many insightful comments and observations on the prediction predicament.

One of the classic books on this topic is The Fortune Sellers: The Big Business of Buying and Selling Predictions by William Sherden. He studied the dismal history — and huge multi-billion dollar industry — of forecasting (he calls it the second oldest profession). He concludes:

“of these sixteen types of forecast, only two — one-day-ahead weather forecasts and the aging of the population — can be counted on; the rest are about as reliable as the fifty-fifty odds in flipping a coin. And only one of the sixteen — short-term weather forecasts — has any scientific foundation.”

When I hear an economist or anyone other than a forecaster making predictions a voice in my head says, “you have no idea what’s going to happen.”

A more recent book takes a comprehensive and updated look at predictions. In Future Babble: Why Expert Predictions Fail – and Why We Believe Them Anyway Dan Gardner writes:

“The now-defunct magazine Brill’s Content, for one, compared the predictions of famous American pundits with a chimpanzee named Chippy, who made guesses by choosing among flashcards. Chippy consistently matched or beat the best in the business.”

This explains the funny photo of a laughing monkey dialing a phone on the book’s cover.

So what should leaders do about planning for the future? The clearest and most helpful guide to this question comes from the extensive empirical research of Jim Collins and his research team. Collins and co-author Morton Hansen summarized their findings in Great by Choice: Uncertainty, Chaos, and Luck – Why Some Thrive Despite Them All. They put 20,400 companies through 11 stages of cutting, screening, and shifting over a 30 year period of study to identify “10Xers” — companies that beat its industry index by at least 10 times. This nine year project started right after 9/11 to find companies that thrived through chaos and disruptive change. The book is structured around their main findings boiled down to three core behaviors; Fanatic Discipline, Empirical Creativity, and Productive Paranoia.

We can predict there are big changes ahead. How big, how catastrophic, and when are completely unpredictable. Our best approach is to build flexible and highly adaptable lives, teams, and organizations. These are the central leadership issues that will make for a truly Happy New Year!