The tyranny of the short-term

A wonderful book given to me when I started travelling the world was called The Tyranny of Distance. In it Geoffrey Blainey describes how vast distances both to other countries and within Australia shaped that country’s history. Threats you can see but may not understand.

We have many tyrannies today. The Tyranny of Possessions, of Excessive Competition, of the ever-present Greed. We all suffer from the Tyranny of Obsession of Measurement over Sensing. Samsung has just been hit by the Tyranny of Speed. Mrs May is perhaps about to be subjugated to the Tyranny of Over-confidence. The Fed is withering before us from the Tyranny of Procrastination. Trump has succumbed to the tyranny of being tyrannical.

Perhaps the worst tyranny we suffer from is the Tyranny of Short-termism. It is difficult to understand why, when so much of what we do needs a long lead-time, we persist in viewing results through the shortest possible window. Annual results became quarterly, then monthly, then weekly, now daily. Next year, hourly and already on your watch-strap so you can keep an eye on sales while you jog?

Some things need to be done quickly. Evacuating a building that has caught fire is not a subject for investigation, reports and committee discussion. It is a matter of getting the inhabitants out as quickly and safely as possible. Competition requires speed, though you have to make a judgment about the risk of skimping testing to the point where you set fire to users. The risk / reward balance must always be carefully weighed when physical or moral danger is hazarded to the extent that it may finish off customers – and the business.

For all the precise measurements we are using, even, sometimes when they are quite inappropriate, we neglect to use simple quantified assessments of our judgments. To do so requires us to forecast, something we avoid when possible for fear of being wrong. But increasingly we find that an attempt to quantify our subjective assessments helps to focus the attentions of those being assessed and those who must use the assessment.

The danger of this trend is that it may raise expectations of immediate solutions. Where people are concerned results may be quick or not so quick depending on their ability to “get it”. Intelligence and common-sense play a crucial role in learning. Generally, however, changing human behaviour takes some time. How can we protrude the idea of making ourselves better forecasters to include a view of the longer-term?

Actually, the process of simple forecasting brings this about more or less automatically. The desire to make commitments about even a fairly near future event involves analysing beyond that event. Immediately we are caught up in the business of medium- to longer-term thinking.

Great sportspeople come from societies where the particular sport is frequently played. Great forecasters come from where everyone is forecasting.

It is time we started on the path to become great forecasters.