Life has interfered with blogging these past few weeks. (My family and colleagues might tell you that's good.) With this post, I'll report on a talk I was grateful to have the opportunity to give last month at the International Intelligence Summit (IIS) in Crystal City, Virginia (just across the river from Washington, DC) - less on the summit itself. Apologies for the delay.
The IIS is an interesting affair - non-profit, non-partisan, truly international (thus the name) and (ironically given the subject matter) very much open to the press and pre-registered public. This was my first time attending. It was also my first time at a professional gathering that included bomb-sniffing dogs and large men in flak jackets with earpieces carrying sub-machine guns in the lobby. A client who'd helped organize part of the proceedings felt - upon seeing and participating in one of our scenario workshops - that people (and a few large organizations) he knew would benefit from hearing more about the methodology. He was right. More on that in a moment.
As many readers may already know, the IIS was made even more 'interesting' this year by the release on day one of material out of Saddam's archive of tapes that had been freshly translated from the Arabic by one Bill Tierney - a U.S. army vet and former UN weapons inspector.
I'll refrain from repeating a story that's been well covered already, or opining on the veracity of the material. I will observe however, that it represents just a fraction (estimates I've seen range from two to four percent) of what will in time be known about a regime, a place and a period in history that some think we understand well already. We don't now and that's frightening.
It is exactly this kind of gradual and highly distributed accumulation of evidence and insight, on such complex and open-ended questions as the pre- (and even post-) war state of WMD in Iraq that lends itself to processing by distributed collective intelligence 'engines' - blogs, prediction markets and wikis to name just a few. Centralized, highly 'siloed' legacy approaches may work in the short term but they're ill suited to the sheer volume of material that eventually comes out. Or to put it another way: More eyes and more minds make for more understanding.
At peak, the conference drew somewhere in the vicinity of four hundred people. (I did a quick count of the heads at the keynote.) It included a number parallel 'tracks', all of which were fascinating. I attended talks on Iran, North Korea, China, Syria and others that seemed desperately obscure out of context. High-end falconry as a money-laundering mechanism for Middle Eastern sheiks. Threats to maritime assets and transport grids as a result of flotillas of small fast suicide boats e.g., in the Persian Gulf. Fascinating if frequently scary stuff.
One comment I heard repeatedly was to the effect that "each of these sessions is highly educational but I can't easily knit it all together". Indeed. Thus my talk on scenarios.
I had the slight misfortune of being positioned head-to-head on the schedule with author and analyst Richard Miniter next door - a talk I'd like to have seen myself. Nonetheless, enough seats were filled at my talk that it made sense to conduct it formally. Ultimately we ran out of time to take every question at the end.
The focus and title of the talk: 'Rehearsing the Future' - an apparent but highly deliberate oxymoron. How does one rehearse what one doesn't know? To boardroom ears that seems nonsensical. Management teams plan for the future. They speculate about the future. They project the future. They budget for the future. They seldom if ever rehearse the future - not in the way that other teams do anyway - not to the point of being able to recognize emerging patterns as a team and respond to them instinctively. The heavy burden of coordination and the inevitably flawed, hasty thinking that occurs in the heat of 'battle' impose a heavy cost on those who have not rehearsed a range of future 'plays'. In other words, scenarios.
My main point in the talk: Other kinds of organizations practice all the time. Sports teams. Pit crews. Orchestras. Armies. Police units. Most teams spend the vast majority of their time rehearsing. Not management teams.
Interesting factoid. I spoke with a colleague yesterday by phone. Until recently, he'd headed up strategic planning for a major U.S. city orchestra. The standard in that industry? 75% rehearsal time: eighteen hours out of a standard musical work week of twenty four - the rest being the performance. And that doesn't count the months and years of extracurricular rehearsal time that individuals must engage in. Seventy five percent. What's the corresponding figure for a corporate management team? I doubt it's as much as seven percent in the most tight-knit strategically oriented organization.
The other major point I made - that seemed to get heads nodding - was that there are two types of uncertainty: actuarial and creative. Confusing the two (and applying the wrong planning system to deal it) can lead to ruin.
The first type of uncertainty - actuarial - involves events for which there is some known history that's highly likely to continue: the growth path of a stable industry, the frequency and severity of earthquakes or tsunami, the incidence of death from certain classes of disease or accident. Such things can be planned for, or at least insured-against. The risks are well understood. Probability dictates that such events come in clusters more often than not (leading to panic that present trends might continue). But they're inevitably punctuated by long periods of calm - periods that lull people into complacency. (Sure, lets build more condos on the beach at Cape Hatteras or below sea level in New Orleans!)
The second type of uncertainty - creative - is more difficult for organizations to wrap their arms around and impossible to insure against in the classic, monetary sense. For example, what was the 'probability' circa 1970 that snowboards (and the as-yet nonexistent entrepreneurial providers who would invent them) would cut into the ski industry? The term 'probability' doesn't even make sense in that context. One could only imagine an innovation that might challenge the traditional franchise.
Or the 'probability' circa 1980 that digital photography would into silver halide (wet process) film sales? Again, nonsensical to ask the question in that way - at least at that time... when there was still time to do plenty about it... when many strategic options were still open to the established players. There was no meaningful 'probability' before the advent of computers and powerful memory chips. Only a creative scenario process could have helped Kodak to rehearse a future in which ribs might start showing on their once fat cash cow.
Or imagining circa 1990 that small committed bands of people might commandeer large airplanes and fly them into tall buildings on purpose, taking out much of the communications grid for the financial industry (among other nasty, evil things). As we noted sixteen months ago: "the four-day shutdown of U.S. exchanges after 9-11 raised pointed questions for the industry in New York".
It is only with hindsight that some are claiming we could have predicted and prevented the events of that tragic day. Yet there were signs, including this insightful documentary on PBS' American Experience chronicling the simultaneous hijacking of four large airliners by Middle Eastern terrorists in early September... of 1970. That was not enough to bet on at the time, but enough to warrant imagining: what would we do if...? ...the essence of scenarios... the essence of rehearsal for a future that sometimes stubbornly refuses to be predicted long enough in advance to do anything useful about it.
I blogged about your post at http://pancrit.blogspot.com/2006/03/practicing-management.html. I'm not sure why the trackback didn't work.
Posted by: Chris Hibbert | 10 March 2006 at 03:52 PM