The more complex the world becomes the less predictable it becomes. Thus, adaptability is key to success.
"Have you ever thought economists were far more confident in their statements about the world than they had any right to be? Well, now there's proof." So writes Justin Fox in an article for the Harvard Business Review.
Fox was writing about a study by Emre Soyer and Robin Hogarth who had asked 257 economists a range of questions about probabilities of various outcomes and found that "The economists did a really bad job of answering the questions. They paid too much attention to the averages, and too little to the uncertainties inherent in them, thereby displaying too much confidence."
When an economist complained to Hogarth that it was unfair to pick on economists, he agreed that psychologists, sociologists, physicists, and others would probably make similar errors. But he said it was important to focus on economists because they're "very arrogant people".
There are a lot of very arrogant people in the world, many of them on television or in newspapers. The amount of experts pontificating about the death of the Euro is staggering. How can these people be so certain? Now, the Euro may or may not survive, but the level of certainty these experts have seems suspicious.
Earlier this year I read a piece by a soccer pundit who was absolutely certain that Manchester City would not win the UK Premier League, that Roberto Mancini would then be fired as manager and José Mourinho would be hired in his place. It didn't happen, of course. But he was so certain.
Just like Moody's predicted in June 2012 that Irish house prices were set to decline by a further 20% Then data came out that showed that monthly prices had risen for the first time since 2007. It's important to note that most experts didn't predict the recession in the first place. In fact, I remember reading lots of these experts back in 2007 saying that house prices were not likely to decline much at all. (They have now declined about 60% in Ireland.)
Any expert who is absolutely certain is an absolute idiot.
The world is too complex. Whether we are managing national economies or large websites we cannot be setting down grand master plans. Instead, we need to have basic goals, such as: be customer focused. Then, we rapidly adapt.
We need continuous improvement. We need to be able to make small changes based on evidence of what is actually happening, rather than what we think is happening. We need to forget about built-to-last and focus on built-to-change.
Living in a complex, unpredictable world is very hard for humans. We love certainties. We crave (and often demand) them. But we have to face reality if we are to succeed.
Things are indeed changing with great speed and much of what works today will not work next year. Or perhaps it will. We just don't know. But what we must do is test, test, test. Observe, observe, observe. Be flexible and adaptable. Be constantly ready to change when change is needed.