Cisco’s futurist discusses “The Internet of Things”
by Eric Garland
I remember forecasts back as far as 1999 that by 2015 or 2020, the biggest user of the Internet by far would be other machines. Medical diagnostics, vending machines, cars – they numbered in the billions and all would have great reasons to share information – to say “I’m broken,” “I’m out of soda” or “Hey, you have early signs of cancer – go to the doctor.”
Now that we have WiFi throughout the industrialized world and emergent adoption of IPv6 (offering unlimited discrete IP addresses) this future Internet of Things could be right on schedule. Cisco’s chief futurist discusses this in a recent live broadcast, in addition to some basic ideas for how innovative companies use futurists to drive growth and profit.
BP’s oil spill is the wildcard scenario, defined
In studies of the future, we typically define for leaders a number of potential outcomes. Obviously, nobody can be certain of the exact future, but through rigorous study of strategic trends, we can at least understand many of the major uncertainties, and plan ahead accordingly. These uncertainties are often boiled down into “scenarios,” a tool with which many people are familiar.
Scenarios must be defined and presented in a certain way if they are to inspire leaders to consider all the possibilities. There are risks if scenarios are done wrong. Present only one scenario, and the rest is considered blasphemy. Present two, and people are forced to take “sides,” both of which may be misleading. Present three scenarios, and people will usually fixate on the “moderate” scenario, even though it is no more reasonable or reliable than one with more impacts. For these reasons, we recommend no fewer than four scenarios, a broader set of uncertainties that stimulate discussion as to our course of action.
The image at right gives only one way of presenting a variety of scenarios, though probably my favorite way. The impact of these potential futures vary from mild, to wild. Note particularly the “wildcard scenario” – low probability, high impact. It probably won’t come to pass- but if it does, all bets are off. In our experience, wildcards are often discarded as too improbable to be worth the potential lost time discussing some doomsday scenario. Many executives avoid a serious consideration of wildcards, preferring to focus on scenarios with brighter upsides.
The BP spill, now in its 43rd day, is the definition of the wildcard, and the best possible argument for why they should be considered in advance.
True, planning for low-probability, high-impact events is not the quickest way to juice up revenue and profit. But it could mean the survival of the company.
One hundred and five deadly cognitive traps to avoid
by Eric Garland
Everybody wants a profitable, just, humane, creative, interesting, healthy future – it’s just that while we are working in groups to achieve it, a bunch of other stuff happens along the way. Such is life in a world defined by bureaucracy, and instead of complaining about it, we need to realize why we’re having so much trouble actually thinking about the future. Until we recognize our collective problems, all the trends and scenarios in the world won’t help us create organizations with a strong sense of foresight.
The above statement is the central thesis for my next book, which will be a detailed, rich manual on exactly how NOT to study the future. I have identified twenty-five common traps into which leaders fall when attempting to think about the future. Before you get flogged with any more reports about nanogenetics or the rise of the Ghanaian automobile industry or reports on cell phones implanted in your molars, we need to look back at the past fifty years of futurism and see why it didn’t necessarily result in a world full of visionary futurists.
Given my new mission, I was excited to find this beautifully-presented look at cognitive bias in groups. The authors outline for us all the ways our group dynamics can result in dangerously inaccurate thoughts about the future:
- The 19 social biases
- The 8 memory biases
- The 42 decision-making biases
- The 36 probability/belief biases
I love this presentation in the way in does not invite to blame or ridicule – these are natural phenomena that occur within groups of people. I may have committed 75 of these mistakes before breakfast myself – it’s that easy. When we come around to such self-analysis with a touch of humor and understanding, we may finally be in a position to move on to organizations that are more sophisticated and more effective.
Cognitive Biases – A Visual Study Guide by the Royal Society of Account Planning
Rupture! from Michel Cartier
by Eric Garland
I have no idea how I managed to miss this incredible video for so long:
Are You Ready for the 21st Century ? from Michel Cartier on Vimeo.
Why don’t we listen to doom scenarios more?
by Eric Garland
A couple years after the world financial system quite predictably melted down, it seems some of the more mainstream journalists are becoming interested in what we call “wildcard scenarios.” Kevin Drum sat down with Reuters’ Felix Salmon and learned:
We should all be more worried about the potential of a mass casualty event — an epidemic, a gigantic earthquake, a massive hurricane, etc. — to annihilate the insurance industry and take out the rest of the financial system as a side effect. The AIDS epidemic nearly did it, Felix says, and missed only because most of its victims weren’t insured. A really big hurricane hitting Long Island could do it, though.
Yes indeed, why don’t we think more about low-probability, high-impact scenarios? It’s not because these are new concepts, oh no. Herman Kahn from RAND Corporation introduced scenario analysis in a modern context to deal with the possibility of nuclear war. He made his entire reputation by bringing leaders unwanted outcomes (notably, destroying the planet) and walking them backward (“backcasting“) toward ways to avoid negative consequences (such as everybody dying). We’ve had fifty years to absorb Kahn’s messages.
Why don’t we think more about wildcard scenarios? It’s not that they haven’t become popular in the business world. Shell’s scenario group supposedly got on the right side of the oil crisis of the 1970s and built the next forty years of success on their understanding of probable outcomes. Those responsible published heavily and built wonderful speaking careers telling others about how to think in terms of scenarios.
Heck, I even wrote a book about how anyone, from a high school kid up to a CEO, can use trend analysis, scenarios and implications for anything. Why didn’t I end up on Oprah’s couch, telling everybody how to save the world with scenario analysis? Now available to the masses in non-jargony language and using the future of beer as a case study! Fun for the whole family!
Let me ask you the reader – how prevalent is scenario thinking in your organization? How many of your senior leaders are willing to entertain the possibility – however slight and “wildcard-y” – that the world may turn out in a way that could make their decisions the wrong thing to do?
And, a better question, what percentage of executives would take such intellectual exploration – hypothetical, mind you! – as a direct challenge to their authority?
How many public relations and communications staffers would find conjecture about potential futures, turning up unfiltered on social media ,as a direct challenge to the message they are trying to craft?
These are the cultural questions of bureaucracy we in the intelligence and strategy world need to deal with before turning out anymore 1500-page analyses of potential world events. We should save the toner cartridges until we deal with how organizations actually work.
The telephone: an even BIGGER threat than I thought
by Eric Garland
With a hat tip to August Jackson, Lloyd’s of London schools us further in the outlandish corporate risk due to the telephone.
Had I not seen this, we might have started using such dangerous technology recklessly.
The telephone: a disruptive technology
by Eric Garland
I loved this graphic, picked up on Twitter. (Click to enlarge) Not sure who Bozarth is, but it’s a clever comparison of social media to the original electric social medium, the telephone.
A few observations, picked up from our years of discussing innovative technologies and new social trends with leaders:
- When people say “It can’t be done,” they usually mean, “We can’t control what will be done with it.” Control, or more accurately the perception of control, is considered FAR more important than creating the forward motion of innovation. Control is almost always the most important value in a large bureaucracy, more important than revenue generation and even profit.
- Most new communication technologies are tested out informally before they become official way of doing “work,” and thus are usually classified as “fooling around, wasting time.” Consider that back in 1996, in the days before Competitive Futures, while using the Internet to research competitors for my then-CEO, I was taken aside by a junior manager who accused me of “playing video games at work.” The video game in question, incidentally, was the EDGAR database of the Securities and Exchange Commission.
- Most every generation underestimates the tech savvy of the generation succeeding it, while simultaneously overestimating the complexity of the next generation of technology. Back in 2000, we did a landmark study of the future of information technology for the construction industry in which we predicted the increased use of cell phones, laptops, GPS, and electronic building plans. Many of the older executives rejected the notion that “construction guys” would be using “the Internet and computers” by 2010. Two assumptions here were faulty: that computer skills were the dominion of the educated, and that “computer” meant “giant, clunky desktop” instead of a smart phone or Toughbook. Today, even the poor kids have Playstation and cell phones, and intrinsically understand electronic menus and text messaging. The generation is more tech savvy, and the tech is simpler.
- The argument of late technology adopters is usually predicated on the idea that they have a CHOICE as to whether the new technology impacts their business. If history is any guide, you can either adopt major technology shifts or wait to see what your competitors will do with the technology. If this is still a question in your mind, why don’t you ask the music industry what it’s like to deny the inevitable.
As such, Competitive Futures is bullish on the long-term impact of social media. It seems inevitable for a host of technological and sociological reasons. Pause for a moment to consider its impact on your customers and your internal management.
Spanish intelligence services: financial crisis is a conspiracy
by Eric Garland
Usually, it’s the job of tin-pot dictators like Chavez and Ahmedinejad to trot out their intelligence services and declare that the world is out to get them.
But when the Spanish intelligence service says the country is under attack from speculators in a clear conspiracy, it’s a sign of something deeply interesting. First, it’s a telltale sign that people high in the Spanish government are concerned that greater instability is on the way from the sovereign debt crisis, and they are attempting to control the narrative.
For those of us practicing future intelligence, this is a call for us to examine the broader political trends at play. Most views of the future take the Euroland to be a stable economic entity for all scenarios. Generally, a meltdown of the single currency and a brushfire war between Belgium and Portugal are considered far out. At the very least, most people consider the continued operation of the EU to be a given – after all, it has resulted in one of the most successful, peaceful, prosperous times in the history of the continent, especially after the tumult of the early 20th century.
Still, it may be that the success of Euroland has required all countries to play a part for which they are ill-suited. Spain still has 20% unemployment. Greece’s debt is out of control. In the days before the single currency, each country would have been free to fail, unsupported by the largesse of France and Germany. Today, they have been supported through their use of a stable, global reserve currency. Like so much, this may be borrowed equity, and borrowed time.
Imagine a future for your business, and indeed your nation, in a world where Europe re-fragments. It may be less far-out than previously thought.
Our non-forecasts for 2010: What’s not coming next year!
Last year we did a series of forecasts for the short-term future, mostly as a reaction to the crisis in world financial institutions. Normally we try to avoid reactions to the 24-hour news cycle, but since a new bank was bursting into flames every 24 hours, it was appropriate.
For 2010, we’d like to follow on last year’s short-term forecast with…
REAL forecasts. Longer-term analysis. A marriage, once again of the strategic with the tactical. For 2010, the future is back.
We’re gratified to say that most of the collapse of 2008 and 2009 was easily predictable through the analysis of basic strategic trends that play out over five and ten year periods. It took nearly a decade for the central banks to help blow a real estate bubble. It took a decade of unregulated derivative financial products to bring Wall Street to the brink of collapse. It will take five to ten years for the Boom generation to rip our social security programs to shreds. Peak oil will have increasing effect on the economy in the next decade. On it goes.
Understand the real future now. Invest early. Mind your short-term management of your organization with a sense of what’s next. This is what we’ve always believed in, and now that panic is subsiding in favor of a stable decline of many 20th century institutions, people will be more apt to take the time to listen.
And Competitive Futures will be there.
Happy New Year!
Forecast of the week: Warren Buffett predicts “all electric cars in 20 years”
At a recent meeting with business students, Warren Buffett has proclaimed that all cars on the road will be electric in 20 years:
Goetgeluk asked what Buffett thought of the peak oil theory — that oil production has peaked and will only decline in the future — and what he believed would replace carbon fuel.
Buffett told him that in 20 years, he believes all the cars on the road will be electric. He’s already invested in a Chinese company working on the technology to make it happen.
Buffett is really famous and really rich, mostly from his defiance of conventional wisdom and some excellent timing, so people are naturally attracted to what he thinks about the future. He hasn’t given us much context to this forecast, but it’s still important to consider. Even though Buffett is an authority of strategic-level business issues, let’s pick apart this forecast. I’ll use a rigorous method of forecast assessment I learned working with the great Joe Coates:
Forecast:
- “All cars on the road everywhere electric in 2029″
Author:
- Warren Buffett, chairman Berkshire Hathaway, Omaha, NE
Type of forecast:
- Expert opinion/conjecture
Assumptions:
- All cars means all continents will have electric motors – Africa, Asia, Latin America included
- Electrical “fuel” will be more competitive than petroleum as fuel for transport
- All new electrical refueling infrastructure implemented in the next 20 years across the globe
- Sufficient increase in electrical power supply across the globe to meet new energy requirements currently fulfilled by liquid fuels
Implications:
- Massive recycling of existing cars and engines
- More liquid fuel available for long-haul trucking (assuming “cars” only means passenger cars and not electric trucks)
- Retooling of all auto factories starting in 2010
- Trillion dollar business opportunities everywhere from rebuilding local electric grids, recycling old batteries
- Increase in demand for coal and wind generated electricity to make up gap in supply of electricity
- Increased demand in solar
Probability:
- Extremely unlikely
Assessment:
This forecast is pretty glib coming from Mr. Buffett. All cars running on electricity in 20 years? Fifteen percent electric cars I could easily see, 50/50 I might buy as an extreme scenario – but 100% electric cars by 2029? It’s nigh on ludicrous. The system effect of a TOTAL shift on all cars everywhere would be practically an act of a minor deity. Perhaps Mr. Buffett is “talking up his book” and this new Chinese company in which he has invested.
Not all forecasts are created equal.
About Eric Garland
Eric is one of the world's pre-eminent thoughtleaders in forecasting and strategy. He helps leaders of business and government make critical decisions about their futures.Connect with us
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