Prophets and losses: the predictive impulse

Abstract

Purpose

The topic of forecasting and our (in)ability to predict the future should be regularly revisited as our memories seem incredibly short and forgiving of inaccurate and false predictions, as well as our failure to predict what should have been obvious. Forecasting is a critical stage of the strategizing process. Why are we still getting it wrong?

Design/methodology/approach

Using a conceptual approach, this paper warns against placing too much faith in our predictive (in)abilities and attempts to address the question of why we continue to seek out and trust a flawed industry that profits from false prophecy.

Findings

Humans have always found comfort in soothsayers and mystics. Where once they came in the guise of tribal witch doctors, today many appear as economists, strategists, and consultants. Our need for security is readily exploited by people claiming to know the future. We receive pleasure from the act of cooperation and therefore prefer to believe rather than disbelieve. We place faith in myths rather than facts, and we fail to see what in hindsight should have been obvious.

Originality/value

This paper acts as a warning. Forecasting is about identifying patterns and themes and designing multiple response scenarios. Myths and magic have no place in the modern business world, and those who claim to “know” the future are really only speculating or lying – no one can “see” the future. Strategists can only reflect on the past, speculate in an informed manner, and design multiple alternative responses. The anomalous event, the pattern breaker, the surprise, will always be with us. The best we can do is to prepare for what might occur, and operate on the basis that just because something has been with us for a long time, it may not be with us forever.

Citation

J. Pech, R. (2014), "Prophets and losses: the predictive impulse", Journal of Business Strategy, Vol. 35 No. 1, pp. 43-51. https://doi.org/10.1108/JBS-06-2013-0042