I've had a chance, the last few days (which, here in Boston are getting longer, if not any warmer) to work down a pile of reading I've meant to do for some time. Midway through that two-month stack, I found this ('Managing in the Fog'), from the February 26th, 2009 issue of The Economist. Dateline -- the fog-prone city of San Francisco:
...2009 budgets... have already been consigned to the shredder, as the economic crisis has blown away the assumptions on which they were based.
Faced with exceptionally volatile business conditions, senior executives are finding it harder than ever to gauge how their companies are likely to fare in the months ahead...
With even short-term horizons as obscure as the San Francisco skyline during a summer fog, companies are finding their standard budgeting and forecasting of little use. The usual trick of plugging figures from operating units into spreadsheets appeals to number-crunchers, but can often generate misleading targets, especially when conditions change fast. [link and emphasis added]
I used the metaphor of fog this time last year. It's useful, to a point.
...the first guy hits a fog bank and can't see squat. He taps his brakes. The second guy sees red lights and fog coming up fast and taps his brakes just a little bit harder, and so on. In just a few seconds, hundreds of cars end up in a tangled heap and people die.
The issue is not the fog itself. Sitting inside watching it with a warm cup of tea connotes a sense of calm introspection amidst muffled sounds and soft light. Rather, the issue is moving through it, i.e., a mismatch between conditions, terrain and speed.
As I've told each of my teenage daughters: speed-limit signs, lateness, adrenaline and energetic music are poor indicators of what will work to get them from point A to point B as fast as possible in a snowstorm at night.
The risk of serious mishap must play a part in gauging what "as fast as possible" means (as the teenage son of a friend learned on St. Patrick's Day when a drunk driver hit him -- thankfully all are OK, it seems). Speed must be matched to what is actually going on, not to some idealized, wishful, outdated view of what should be.
So am I wagging a fatherly finger at managers, advising them to curtail expectations, slow down and wait for the fog to lift? Not necessarily. Here's the big thought to chew on:
Instead of turning up the headlights of forecasting (counter-intuitively deadly in fog), the most important adaptation executives and strategic planners can make to such conditions is to increase collective responsiveness.
How does one do that under conditions analogous to heavy fog when landing the plane or pulling over aren't viable options? And what does that metaphor mean in practice? Several things.
First, decide what kinds of things make sense to look out for in the fog. (E.g., iceberg? mountain? brake lights? deer? It depends on the vehicle, the terrain and the map.)
Third, examine specific hypothetical examples as archetypes, not fixating on truly catastrophic 'act of God' events at the expense of ones that can be influenced. A rough analogy here would be to pop-up shooting ranges for law enforcement officers with an emphasis on rapid recognition and the ability to appropriately slot such 'surprises' into specific response categories.
Fourth, rehearse key events, scenarios and potential responses together. A management team can no more outsource scenario thinking than my daughters can outsource Drivers' Ed or a World Cup soccer team can train alone and expect to win.
Easy? No. Formulaic? Not at all. In fact, the process is highly creative. Effective? In the current environment, conventional 'steady-state' planning alternatives are actively misleading (i.e., more of the same will only get you in trouble faster). Turn up the headlights and you'll be blinded. Slow to a crawl and you'll be passed or hit.