Up to a few days ago, prior to the invasion of Ukraine by Russia, one of the most practical skills in this modern age of technology was to be able to predict the future (Listen to the podcast here). In a world that seems to be evolving at the speed of light, all of us have to be involved in that type of exercise; to predict the future and see what might happen. But every day now, we see evidence that events are accelerating. We can even talk about an acceleration of acceleration.
Wherever you are in the world, making predictions is becoming almost increasingly risky.
To put it just in a few words, all you had to do up to now, was to take a sample of the past and apply it to the future, whether it is the short, medium or longer term.
However, with the war that suddenly erupted in the last few days, all of a sudden this framework is shattered. That dislocation is happening as we speak and we are probably unable to see it, or to perceive its inner dynamics.
All of a sudden, all these events are exposing how challenging it is to predict the future when that future is becoming so fragmented and impossible to frame.
In the last few years, there is a term that is becoming increasingly common. If you were attending conferences, keynotes or workshops, the presenter always had to bring that expression and its ideas into the equation. VUCA was that idea. It meant that the world was becoming more and more volatile, uncertain, complex and ambiguous. Yet that the VUCA framework of analysis feels totally outdated now because of the kind of dislocation unfolding right in front of us, at such surprising speed. That speed of change is throwing even VUCA into obsolescence.
In just a few days, we have witnessed so many in-depth dislocations that we will now have to transform the worldviews we have used to so far. These events nowadays are much bigger and wider that a simple change. It requires from us an in depth transformational adaptation of our way of seeing the world. Times are changing under our own eyes and we are thrown violently into a new field of perception, by the uncontrollable winds of history.
Yet it feels that we are undergoing such a transformation of paradigm that even the VUCA model does not apply here anymore. What we are witnessing here is a kind of blurring and fragmentation in the outlines of the future.
In fact, what we are witnessing, is an acceleration of acceleration.
Just a short reminder here about the VUCA model. It was developed by the US army a few decades ago to describe an environment where volatility prevails, an environment fuelled by uncertainty, an environment made difficult to analyze because of its complexity, and an environment increasingly ambiguous. Yet we can feel that current events are even surpassing the capacity of that VUCA model. What we are noticing is also a blurring and a fragmentation of our perceptions.
Indeed, we are led to ask ourselves the following question: what is it that we don’t know that we don’t know ? We may think that we know that we don’t know. However, it might be worse than that. We have been so used to the comfort of being able to make predictions from the reassuring signals sent by the statistical and quantitative models of predictions, that we did not notice how this could all be thrown out and made useless or futile.
I came to be quite sensitive to that issue of making predictions many years ago. I remember attending a seminar with decision makers and thought leaders at a large think-tank in Manhattan. That was in the mid 90’s. Of course, at that time, I was already deeply involved in providing macroeconomic predictions on specific horizons, and that was the main reason I attended that amazing workshop.
Usually, any exercise in prediction fluctuates between a pure technical approach that is illustrated by modern quantitative models, and a purely qualitative angle where an expert is invited to give an opinion. Both are extremes where experts in particular fields are grounding their conclusions on a particular worldview, or way of seeing the world.
The last two decades especially have witnessed the emergence in the use of quantitative models, all rooted in the computational powers that are now right in the palm of our hands. However, in hindsight, we fail to realize that our blind trust in these models came from another blind belief. A blind belief that provided the all-encompassing framework for these quantitative models to function. We believed that the end of history was at work. We believed that this was it.
The events of the last few days are shaking that belief to the roots. Up to this point, last week, predictive analytics and the ability to gather information from all corners of the globe have been even providing an almost magical superpower to institutions that are using them. In fact, that supermagical power is not just limited to institutions. Individuals too can join the party. An almost magical superpower that allows these users to predict the future with a fascinating insight into complexity and the interdependent nature of the globalized world we live in. Jaron Lanier, in his great book “Who Owns The Future”, calls it the perfect investment. The largest institutions of this planet can operate some of the most sophisticated servers with the most expert teams to code them and operate them. They have right at the tip of their hands, the ability to make the most powerful computations to predict the future.
This is indeed where these models were heading.
Up to last week, on that date of February 24.
But where does it leave all of us, Entrepreneurs, Investors, Visionaries and heads of household. Where do all of us stand between these two extremes of qualitative and quantitative ?
Feel free to comment and to let me know what you think.