Future Here Now: Predictable → VUCA
Macrotrends
Hi I have to apologize, again. I had these posts prepared to go last week, but I failed to take them out of drafts - and as I was off the grid on vacation much of last week, I didn’t catch the error until this Monday. So we will pick up where we left off.
My last three posts outlined the fundamental underlying, and changing, conditions that are making our present and future so different from 20 or 30 years ago — and profoundly different from the conditions that formed many of our unexamined assumptions about how businesses, communities, and our own brains and relationships should work. I call those the Sea Changes, because if you’re sailing a boat, and the wind or waves or current change, that completely changes the choices that are available to you. A sea change might mean that you have to sail in a different direction, even if you don’t want to. It might mean that you have to put into the nearest harbor in a hurry. Or it might mean that you are in a whole lot of trouble.
The Sea Changes, in turn, cause some direct effects. If you’re sailing a sailboat, the sea change might mean that you need to take down some of your sails or reef them (tie parts of them down to make the sail area smaller). I call these first level impacts Macrotrends, because they show up across a very wide range of situations. Today’s post is about the first of these Macrotrends.
When I started as a city planner, we assumed that one of the basic characteristics of a community -- its population growth rate- was predictable. We based our comprehensive plans on a very straightforward, linear extrapolation of the last couple decades’ population trends. Figuring out how many housing units or jobs to plan for took little more than elementary school math.
Meanwhile, my colleagues in economic development were creating, or trumpeting, the results of complex econometric models that predicted a specific amount of “economic impact” -- usually in terms of direct, indirect and sometimes tertiary money or jobs - money and jobs created by the spin off or recirculation of the proposed investment.
The math was completely obtuse (literally -- it happened inside a modelling software that only a few high priests actually understand), but it generated, without fail, a Big Number.
A specific, very big, Big Number. A Big Number that justified the thing they were trying to get.
No one, almost ever, went back and asked if either set of numbers turned out to be correct.
Today, even the idea of a projection like that seems naive.
How do you account for the impact of a pandemic? A one-in-a-lifetime hurricane that comes every 10 years? Artificial Intelligence? Whether your children will accept or reject the lifestyle you promulgated?
In the world of business strategy, the environment we have now and into the future is called VUCA -- Volatile, Uncertain, Complex and Ambiguous. Businesses and successful organizations are planning for their future from an expectation of VUCA.
Doesn’t exactly sound like our simple numbers. Or our magic, super-fragile Big Number.