One of my favorite quotes (I don’t even know if it’s true) is supposedly from Jack Welch and it is about how he got rid of his forecasting department:
We might be surprised, but we won’t be surprised we’re surprised
Businesses are often surprised by changes to the environment, even while they tout their ability to master the situation. One company I used to work with had a joint venture with CISCO in the dot.com era – at the time CISCO was touting their advanced financial capabilities, their ability to close the books a few days after quarter end, and most importantly their supply chain mastery that allowed them to accurately forecast demand. Almost immediately after that period of boasting, CISCO had a big inventory write down since they built too far ahead of demand and had to scrap the unsold goods and materials.
To some extent the entire economic situation that we are currently embroiled in relates to a failure to predict the future or forecast accurately – demand was over-estimated, pricing power was over-estimated, and liquidity that was taken for granted vanished in an instant.
While businesses have to face up to their failures (by publishing financial results filled with losses, getting acquired, or going out of business), what about the journalists and “talking heads” on TV who cover foreign affairs?
How many of them predicted that Iran would break out into a mini-revolution? The Iranian regime seemed solid and their hold on the electorate strong; I don’t remember talk of widespread unrest, and also of the potential of new communication tools like Twitter to widen the impact of these protests.
Failing to predict critical events is commonplace; less frequent is the media owning up to their limited powers to see the future and the fact that many of their talking heads don’t provide much insight. The 24 hour news channels are a void of chatter, scrolling news tickers, and loud updates.
They should take a cue from the Jack Welch quote above and either get much better at what they do (unlikely) or more importantly note their inability to provide much more than real time (at best) views of what has already occurred.
Cross posted at LITGM
4 thoughts on “Iran and Prognosticators”
A lot of people make their living selling ideas.People usually buy ideas or stories that make them feel good or that entertain them. The default position for people is to not be serious about the ideas they entertain. So you can feel good about electing incompetent politicians if you can pat yourself for being more sensitive, or whatever.
If you choose an incompetent plumber,or doctor, or buy a car made by an incompetent automaker you won’t feel good.You know the product is bad. The reason our chattering class is so bad is because the consumer of words is not serious.He never has been. The internet may help a little by making good product more available.
The 24 hour news channels are a void of chatter, scrolling news tickers, and loud updates.
“News” is such an odd commodity. Even worse is commentary.
I break down the “news” into two basic groups. 1) Fact reporting “the dow went up this many points, the Cubs lost 4-3, Chicago had 6 murders this weekend, etc.”, and 2) the rest is opinion and/or commentary and usually is worthless.
Many of the things that are reported upon are extremely complex when you think about them. I once read an entire supreme court case including the supporting documents on both sides and it was a crushing load of facts and historical interpretation of the Constitution. Of course the papers and cables break it down into one liners and 30 second sound bytes.
A recent example – I would imagine that Michael Jackson’s estate is a tangled mess of crap that will take months (years?) to unravel, and I assume that state laws, federal laws, and laws of other countries (overseas assets or debts) will need to be looked at to get it done. Yet all we see in the paper or news flash is that so and so “filed” for this.
One problem is that as a whole most people simply don’t care about most outcomes and just swallow the provided commentary whole. In the defense of “people”, life is busy. I, for one, don’t care about MJ’s estate so will be following that with one liners provided by people who know less than nothing about settling an estate. One day I may go to some lawyer blog and read about it as for a guy like myself, that would be some interesting reading if it is made public (who gets the stuffed life sized Peter Pan?).
The other problem is that if you had a bunch of intelligent people reoprting and commenting on the news there would be a very small market for it – just sit in your local mall for 30 minutes and observe the people walking by and you will see what I mean.
I’m wondering if General Electric’s selling to Iran – of God knows what products/technology – that props up the regime began with Jack Welch or is another brainstorm by Jeffrey Immelt.
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