Short Take – Using Superforecasting Methods for Your Strategic Futures

tetlock“It’s very hard for professionals and executives to maintain their status if they can’t maintain a certain mystique about their judgment. If they lose that mystique about their judgment, that’s profoundly threatening… Level playing field forecasting tournaments are going to spread…To what extent (are they) going to destabilize who the big shots are within organizations? ~Philip Tetlockin conversation with Daniel Kahneman

Philip Tetlock became famous when he discovered (and wrote) that  “the average expert is roughly as accurate as a dart-throwing chimpanzee”. He has conducted forecasting tournaments since 1985 and recently undertook a competition sponsored by the IARPA to see if a group of ‘superforecasters’ could outperform security analysts (and other groups) in predicting the future. Needless to day, the individuals and teams he put together performed reliably better than pundits, experts, wisdom of the crowd, prediction markets and even intelligence analysts (who had access to classified information). Still more interesting, these Superforecasters, when clustered into small teams, performed even better than when working solo (individuals became 50% more accurate after joining a team). Tetlock’s effort has evolved into an on-going initiative called the Good Judgement Project.

Although the types of predictions (geopolitics) and timeframes (1-5 years)  that Tetlock and his teams were concerned with are different than what is typical in corporate futuring exercises, many of the techniques and principles can be adopted for use in these longer term (10 – 15 year) futuring efforts. Specifically, the following principles and methods have direct applicability.

  • Employ probabilistic thinking
  • Starting with a baseline default probability and adjusting from there
  • Being very specific in what is being forecast and very precise on the probabilities
  • Getting diverse views and diverse sources of information
  • When the facts change, so do the forecasts
  • Working in teams, sharing information and critiquing each other’s logic
  • Having definitive metrics of accuracy (e.g. Brier scoring)

Incorporating these techniques into strategic futuring exercises suddenly makes them much more real and actionable. Instead of a  statement like “autonomous vehicles will be common in 10 years” you create a prediction like ‘There is a 75% probability that in 10 years, 25% of new cars sold in the US will be level 4 autonomous”. The specificity of this form of predictive statement makes it measurable. It places a definitive stake in the ground (albeit the stake can be moved) and gives this future real meaning and potency. The key to making this successful, however, is to turn your future scenarios and stories into a set of specific predictions that are relevant to your business.

Futuring is a tool that more companies are using in these turbulent times to gain insights into what could happen and how to prepare for and influence the future. These efforts inform strategy, opportunity discovery, portfolio design and virtually all aspects of a company’s innovation process. Doing this well prepares the company to deal with the forces of disruption and allows them, instead of being surprised, to be resilient to others disruptions and a force for disruption themselves. Superforecasting methods are a great addition to the futuring techniques that are now used to gain insight into the future. They help you to know what to look for and what actions to take.

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