Paying for Bad News #3: Stormy World

Paying for Bad News #3: Stormy World

By Mark Chussil

This series of four posts was published as a single article by SCIP in the April-June 2012 issue of Competitive Intelligence Magazine. (SCIP is Strategic and Competitive Intelligence Professionals.) You can read or download that version of the article.


With his heartfelt goodbye-cruel-world article “Peak Intel: How So-Called Strategic In­telligence Actually Makes Us Dumber” in The Atlantic, Eric Garland sparked an elec­tro­nic blaze on LinkedIn. His article fired up many people (see Acknowledgements), includ­ing me, in the fields of competitive strategy and competitive intelligence over a few days in April 2012.

The article and commentary hovered around three themes, which I’ll call Closed Minds, Distorted Markets, and Stormy World. Those themes are perennially old and current-events fresh.

I’m not saying the themes are wrong. I am saying I don’t think the evidence establishes they’re right. They might be right, but they aren’t right yet. Until they are right I believe it’s worth considering other perspectives.

This essay, Stormy World, is the third of four. It is my commentary on Mr. Gar­land’s article, and my commentary on the commentary on his article. See the others: Closed Minds, Distorted Markets, and Beyond The Themes.

Stormy World

Situation: The world is changing rapidly and unpredictably, and change is accelerating.

Observation: Predictions are getting worse.

Outcome: Business decisions go awry more often.

Conclusions: As the future grows unpredictable, business decisions are increasingly problematic. No hope in sight.

The Good New Days

“How fortunate we are to be running a business in such placid times! Our competitors are kind and gentle, customers love us, and the win/win keeps pouring in. Decision-making is so much easier than it was in the indecipherable past. The world has reached a happy equilibrium and every­one is committed to cozy stability. Ah, these are the good new days.”

If you had a million dollars for every time you’ve heard an executive say that, you wouldn’t have a million dollars. No, we are living, and will always live, in times of un­predictable hyperultracompetition, so unlike the blissful wistful placid past.

Things are changing and the future is unpredictable. The Stormy World theme goes two subtle steps further: it says, with some anxiety, that today’s changes are qualitatively dif­ferent from yesterday’s and that what we learned in the past no longer applies. (See The Rules.) The theme might be right, but like the others I think it isn’t right yet. There are other perspectives to explore.

How You’ve Changed!

We marked our changes in our early years: we counted our new words[1], we completed grades in school, we wore black robes and black hats with helicopter landing pads and were told we’d completed our education.

And we keep changing, and the world keeps changing. When we perceive change, it’s hard to know how much is due to what we see and how much to how we see it.

For example, let’s think about experiences from the Closed Minds theme, where clients in­creasingly reject bad news, or at least seem to. It is possible that clients are increasingly rejecting bad news. That possibility is not mutually exclusive of others, such as:

  • As your career has grown, you are now talking with tougher, more-senior audiences (or, as Eric’s article mentioned, bad-news-resistant “silver-haired alpha dogs”).
  • As your skills have grown, you have taken on more-complex situations or you have learned to recognize more-serious bad news.
  • As your fame has grown, you may be delivering bad news to companies that previ­ously wouldn’t have even let you in the door.

We all experience the broadening of our lives. There’s another change we all experience: the dimming of our pasts. Events recede. We edit and forget. The tough challenges we conquered seem retroactively easy as we gain skill and perspective. We hear and tell narratives of the past, and those narratives grow increasingly true, smooth, and inevita­ble. By con­trast, today looks, well, stormy.

The problem with predictions and the Stormy World theme may be not that the world is more stormy today, but rather the illusion that the world was more placid yesterday.

Fetch Me a Meteorologist

The world was plenty stormy yesterday and it is plenty stormy today. Who cares about the relative storminess? What we care about is decent forecasts to guide us through the storms. Right?

Unfortunately, there’s plenty of evidence that expert opinions and predictions are bad, even in areas much simpler than strategy. That might be due to distorted markets and a stormy world. It’s surely due also to a range of common human biases (overconfidence, confirmation bias, survivor bias, innumeracy, cognitive dissonance, and so on).

So then consider what we are asking of the client. The problem is not wholly that the cli­ent is in denial when he or she rejects bad news. The problem, in part, is that the client is being asked to buy a product that, according to both the Distorted Markets and Stormy World themes, doesn’t work.

So why doesn’t the product work? Not for lack of fine intelligence (both information and brainpower) to go into opinions and predictions. Rather, due to using the wrong meth­ods to transform intelligence into predictions.

Let’s say we liken business to chess. Would you use a trend line to predict what your chess opponent is going to do next? How about a benchmark or a spreadsheet? Of course not. Yet those are the tools people use in strategy, even though predicting the future and making strategy decisions are more like antici­pating chess moves than ex­trapolating a financial statement.

Think about meteorologists. They rarely give single-number forecasts. They say things like there’s an 80% chance of precipitation tomorrow. They give a range of outcomes.

And they are right. Research shows that meteorologists are “well-calibrated.” If they say, for example, there’s an 80% chance of precipitation, 80% of the time it precipitates.[2]

Notice, by the way, that meteorologists use structural models, not trend lines. They look at the conditions that cause rain and sun, not at averages or what happened yesterday. I meant a similar approach when I mentioned strategy models a couple of pages ago.

The meteorology equivalent for business decisions is to use structural models to explore multiple scenarios. There are two challenges here. First, in my experience companies rarely use structural models.[3] Second, there can be a lot of scenarios to explore. (See The How-Likely Case.) But structural models can be built and they can explore a lot of scenar­ios. Again, I know because I’ve done it, and so have others.

Next, Read Part Four: Beyond The Themes

Click here to read part four, the last in this series of essays. Part four is about going Beyond The Themes.


The LinkedIn e-conversation, in the Corporate Planning, Strategy & Strategic Market Segmenta­tion group, contained wis­dom from James Andrus, Babette Bensoussan, Ben Gilad, August Jackson, Alan Michaels, Seena Sharp, and many others. People cited Benjamin Franklin, Daniel Kahneman, Friedrich Nietzsche, and Mi­chael Porter. We covered blind spots, business war games, the curse of success, hon­ing the craft, industry databases, News Radars, oligopolies, political influence, and strat­egy simulations. I have done my best to reflect that commentary in my essay. Blame mistakes on me, and credit wisdom to them. Thanks also to Sean Campbell for sage advice.


[1] Given the average adult’s vocabulary, each of us learned something like 3-5 new words every day as a child. How many have you learned today? (Me too.) See The Oxford English Dictionary on the number of words in the English language.

[2] The Psychology of Judgment and Decision Making, Scott Plous, McGraw-Hill 1993, pp. 222-3.

[3] Possible sample-bias alert. Since I build simulators, I’m more likely to get called in by companies that don’t have good structural models than by companies that do have them.


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