Don’t predict, prepare

Nobody knows what happens next. No one’s predictions will be very accurate.

We’ll look back and wonder how it wasn’t obvious, but nothing that seems obvious now is likely to be right.

As Shane Parrish notes in his book The Great Mental Models, it is tempting to try prediction. But:

“The problem is that nearly all studies of ‘expert’ predictions in such complex real-world realms as the stock market, geopolitics, and global finance have proven again and again that, for the rare and impactful events in our world, predicting is impossible.”

The fact is, and Clay Christensen put it best, “expert predictions are always wrong.”

So what do we do?

We prepare.

We think about everything that could happen, and we make plans.

This post might seem pessimistic, but thinking about things doesn’t make them any more or less likely to occur. Our minds have no control over external events, only our own reactions to them.

So I always recommend thinking about the different ways things can go, and thinking things through all the way to the end. Not so that you can accurately predict events, but so that you’re more likely to be prepared in any eventuality.

The first way to start preparing is to consider the most likely outcomes based on past experience. When major events happen in the world, what often happens next? For one example, we know that the stock market usually experiences an extreme climb or fall. We don’t need to know which will happen, we just need to assume one of them probably will, and to have a plan for both.

The last time there was an American election this contentious, with this much division and disunity, was in 1860. We can fall into the “end of history” trap and assume what happened next for them can’t happen again. Or, we can start to think about what we’ll do if it does.

Added to that, we’ve been warned since last Spring that our current pandemic is likely to have a second, third, even fourth wave. It was the 1918 pandemic’s second wave that did the damage. We can hope or assume that won’t happen, or we can plan for it just in case.

As we do more and more of our commerce online, we may see a massive push to support local businesses over the giant global retailers. Or a post-geographic sense may set in, leading people to forget about shopping local. Or there will be some distribution among those and other viewpoints. How does your business fare in each scenario?

Will people buy fewer holiday gifts this year than in previous years? Or will pent up consumerism lead to the biggest holiday season in history? It’s silly to just assume either or neither, but even sillier to not consider both.

As Chris Voss said, “you fall to your highest level of preparation.” So we must pause, think, and prepare, and build our floor of preparation as high as we can.

There’s so much reason to be hopeful! And so many reasons to be careful.

The idea isn’t to focus only on the negatives—it’s to not solely focus on the positives.

Anything could happen, and something will happen.

Let’s just be as prepared as possible for whatever that is.