The Future's So Bright... (Or Is It?)

On August 4 the majority shareholders of the company which controls the company that I work for issued a Schedule 13D to the Securities and Exchange Commission which suggested that they were open to a potential sale of the business or other alternatives (FitzGerald, 2023). The form, like most of its kind, was not conclusive, despite media interpretation to the contrary, the majority shareholders did not commit to a sale or to taking any action with respect to the company. All the same, the event caused me to engage in my own form of scenario planning, where in the past I had practiced traditional forecasting with respect to my prospects at the company.

The process of scenario planning produces “a portfolio of future scenarios, each representing a different way your … landscape could look in a few years” (Wade, 2012). This approach does not attempt to evolve the current environment along known axes, rather it identifies a range of potential scenarios which might plausibly emerge given the current state of a situation and the context of trends which might affect that situation. The practice of scenario planning involves the principles of taking the long view, using outside in thinking, and engaging multiple perspectives, each of which helps to broaden the aperture of visible future states (TEDx, 2019). The advantage of scenario planning is that it casts a wide net and thus exposes the wide variety of potential future states with little regard to details such as probability or likelihood. The primary disadvantage of scenario planning is that is not predictive in nature based in part on the willful ignorance of considering probabilities.

By contrast, traditional forecasting is founded on the assumption, explicit or implicit, that the future will look broadly like the present. The practice of forecasting is akin to driving forward using the rear view mirror. As long as the road is straight, or at least does not turn too quickly, the approach works fine. This is similar to scientists using the results of experiments to predict the most likely results of similarly constructed future experiments (GLOBIS Insights, 2023). The disadvantage of traditional forecasting is that it requires that “the risks and opportunities tomorrow will be similar to those [of] today” (Wade, 2012). This foundational assumption forestalls consideration of wildly different circumstances or unpredictable externalities that have not historically impacted a situation, often called black swan events for their infrequent occurrence. The advantage of traditional forecasting is that it is relatively straightforward and often works perfectly fine for short distances into the future. The duration that this approach will work is largely dependent on the pace and volatility of the situation being examined – forecasting in a large stable business with little technology dependence might be the right approach to guide priorities for the next year.

Prior to August 4 I engaged in the practice of forecasting when it came to my career and expectations for the company I worked for. After 20 years I felt I had a good handle on the road behind me, there weren’t too many curves, and I had a good feel for the rhythm of the industry. I hadn’t occurred to me that the future could be so uncertain, after a past of so much relative certainty. Since then, I have spent far more effort scenario planning, imagining how my future might look across a range of possibilities, with no ability to predict relative probability and little control over the outcome. The process of scenario planning, despite the uncertainty involved, has helped me to consider potential future states – working here, working somewhere else, not working at all, changing industries, volunteering, etc. – and mentally prepare for any of them.

References

FitzGerald, D. (2023, August 4). U.S. Cellular owner explores sale. Wall Street Journal. https://www.wsj.com/articles/u-s-cellular-owner-explores-sale-746bd1d8

GLOBIS Insights. (2023, July 28). Scenario planning: Thinking differently about future innovation [Video]. YouTube. https://youtu.be/y-CccEPJJ7k

TEDx. (2019, June 21). Scenario planning - the future of work and place | Oliver Baxter | TEDxALC [Video]. YouTube. https://youtu.be/XAFGRGm2WxY

Wade, W. (2012). Scenario Planning. Wiley Professional, Reference & Trade (Wiley K&L).