predictions

Posted: January 22, 2012
By: Clay Cerny

[“Sabbath” is this blog’s Sunday feature that explores places where work and life meet.]

Following the Experts

The past week has been very bad for experts, especially those who make predictions.  Last Sunday, the Green Bay Packers lost the New York Giants.  The experts have spent most of the season calling the Packers the favorite to win the Super Bowl.  The New Orleans Saints, the team that many experts said had the best chance to beat Green Bay, also lost.

Yesterday, former Speaker of the House Newt Gingrich defied the experts by winning the Republican Presidential Primary in South Carolina.  A week ago, polls had him losing to Mitt Romney by margins of 5% to 20%.  Gingrich won the election by 13%, and now the experts will begin to tell us what will happen in Florida in 10 days.

Who will win the Oscars?  Really, who cares?  We are a society obsessed with predictions, ignoring how often “experts” are wrong (Who picked the St. Louis Cardinals to win the World Series?).  The same principle holds true in business and investing.  Look back at the “hot” stocks that end up losing money for the investors who followed conventional wisdom.  Similarly, many strong businesses have failed when they guessed wrong about market trends.  The best example of such a decision might be “new” Coke, which consumers rejected, forcing the company to return to its “classic” formula.

Why are experts wrong?  In his great book Black Swan, Nassim Taleb argues that it is impossible to predict the future.  Too often an unexpected event will happen – a Black Swan – that will change the path of history.  A Black Swan event can be good or bad – 9/11 or Steve Jobs’ Apple computer.  Rather than try to do the impossible and predict such events, Taleb recommends that we prepare for them by being “robust,” being prepared to meet the change and use it to our advantage.

Experts do contribute to our understanding of the world, but we need to take their advice with a grain of salt.  Ever since the financial collapse of 2008, economists, politicians, and pundits have all predicted that a new disaster is coming.  They preface their forecasts with words like if and could.  For example, “If another European country undergoes financial stress, the Euro could collapse as a currency, which could impact the American economy and lead it to a possible recessions.”  The secret to being an expert?  Hedge and qualify your predictions whenever possible.

I like Taleb’s solution.  Let the future happen and deal with the unpredictable when it happens.  Stay flexible and humble.  Don’t mindlessly follow the crowd.  The stories experts tell are attractive because they make us think we understand and can control the future.  It’s a nice myth, but reality and experience show again and again that the “best laid plans of mice and men”. . .  Enjoy the rest of the playoffs, the Super Bowl, as well as the political games.  However, if you are going to bet, think twice before following the experts.

Posted: January 2, 2011
By: Clay Cerny

[“Sabbath” is Career Calling’s Sunday feature on life and work beyond the office.]

Getting It Done

Long ago, I resolved to make no more New Year’s resolutions.  Like most people, I would make promises to myself that were forgotten or abandoned sometime before January 7.  A new year motivates us to change.  More importantly, it makes us think about what we want to be different in our lives.

So why don’t we keep our resolutions?  Change is hard, and it is frightening.  The novelist Steven Pressfield has defined this problem as the “resistance,” an ever-changing force that keeps us from doing “our work.”  Those two words say it all: “our work.”  For some people (like Pressfield), the work is art, writing a novel, creating a painting.  For others, it could be starting a business or getting a new job.  The classic “work” of the New Year is losing weight.  Whatever your work, what’s stopping you?  You are.

O.K., it’s not that simple.  In his book The War of Art, Pressfield outlines over 20 ways that resistance pushes us away from our goals and our real work.  He writes, “Resistance is the most toxic force on the planet.  It is the root of more unhappiness than poverty, disease, and erectile dysfunction. To yield to resistance deforms our spirit.  It stunts us and makes us less than we were born to be.”  Even successful people fight this force.  Pressfield cites the actor Henry Fonda whose self-doubt was so strong that he would often be sick before going on a movie set.  What made Fonda great was his ability to face this fear even if he could never conquer it.

Our personal lives and careers intersect, and the resistance impacts both parts of our life.  Many unemployed Americans are facing foreclosure, divorce, and so many other severe challenges.  They are also being held back by a form of resistance that infiltrates too much of our life: statistics.  Some experts tell us that unemployment will be a problem for 2-5 years.  Others claim it will be 5-15 years.  I’m taking these numbers form “The Waiting Game,” an article in today’s Sun-Times by Francine Knowles, who has written many outstanding columns about the job market and challenges facing working people.  This column, however, bothers me because it focuses too much on experts and their predictions. 

Go back and look at any type of prediction, including the weather.  How often is the forecast wrong?  What team was projected to win the Super Bowl or World Series?  How often did they win?  There is no way a junior Senator from Illinois named Barack Obama can beat Hillary Clinton.  We all heard that.  Just as twenty years earlier experts told us there was no way an actor Governor from California could be elected President.  Wasn’t he in a movie with a chimp called Bedtime for Bonzo?  The experts scoffed – and they were wrong.  I’ll write more on this issue in the coming weeks, but let’s get back to the challenge of change and our “work.”

When was it ever easy to find a new job?  When is any kind of change easy?  This period is very difficult, especially for middle-aged and older workers who commanded higher salaries.  People are still finding jobs if they are persistent and able to adapt. It is no different for people who want to quit smoking or lose weight.  Most will not reach their goal because of some resistance.  However, some succeed.  We all know people who set goals and achieved them.  They knew their “work” and they did it.  There’s no easy formula for success.  One thing I know for certain:  playing the “waiting game” gets you nowhere.  Moving forward in the face of fear and rejection is difficult, falling and getting up is hard, but it’s the only way to reach our goals. 

Don’t let the resistance win.  Don’t wait. Get start and keeping going until you’ve reached the finished line.  You manage your life and happiness.  Leave the statistics to the experts, and remember that their predictions are usually wrong.