Beating the Global Odds: Successful Decision-making in a Confused and Troubled World

Be Wary of Conventional Wisdom and the Usual Experts

Every organization needs to have a vision of the future. Strategy and action are impossible without it. The problem, however, is fundamental: The time arrow moves only in one direction, to paraphrase William Janeway, sometime vice-chairman of private equity firm Warburg Pincus. The future doesn’t exist yet, and we are invincibly ignorant of what is ahead. So we typically do things that are actually counterproductive: We grasp for forecasts or expert predictions that extrapolate trends based on where things are today, or worse, we stay glued to the rear-view mirror. These tacks generally impede, rather than enhance, our ability to see beyond the horizon. We hold on to seeming certainties or widely accepted truisms: for example, that real estate always goes up; that the (now former) Mubarek regime is stable; that the age of the business cycle is over; that Putin, despite his recent win, will remain unchallenged in Russia for years and decades to come as he seeks additional presidential terms; that the planet is cooling and approaching a new Ice Age (as we thought in the 1970s). … 

Forecasts based on current trends are potentially dangerous, as they create a false sense of insight and reassurance. Conventional use of expert opinion is—perhaps surprisingly—just as bad. For example, the University of California, Berkeley’s landmark study of expert predictions looked at 82,000 predictions over 25 years by 300 leading economists. It ...