Forecaster Paul Saffo is director of the Silicon Valley-based Institute for the Future – nonprofit research group that helps companies and government agencies make better decisions about the future.
A graduate of Harvard College, Cambridge University and Stanford University, Saffo ranks among the world’s leading futurologists and technology forecasters. In 1997 the World Economic Forum named him as one of 100 “Global Leaders for Tomorrow”. He writes, speaks and consults and currently, he serves as co-chairman of The Economist magazine Innovation Awards and as chairman of Samsung’s Science Advisory Board.
He talked with James Nelson for Management magazine about the emerging trends and discontinuities influencing today’s and tomorrow’s global business environment.
Are you consultant, writer or speaker?
All three really. I am sort of seamless mix. I’d like to do more writing. That’s where my passion lies. The other things are intellectual adjuncts. You need the reality of visiting companies (to talk) with real people about real problems.
How does one become futurist?
I don’t know. I don’t consider myself futurist. I’m technology forecaster. Futurists are often advocates for certain kind of future. They have vision of what the future will be and they try to persuade us about that. They either encourage us to go into that world or try to warn us about something terrible that is about to happen.
As forecaster I am more of bystander. I tell people what I think may happen rather than advocate what I think should happen. One of the rules I live by is not to allow what I hope will happen to cloud my judgement of what I think will happen.
What indicators enable good forecasting?
We live in world where God does not have plan. Our actions in the present influence outcomes in the future. So forecasting is concerned with understanding uncertainty. It’s not about saying this or that will happen but suggesting things could happen and suggesting the likely outcomes. This leads to better decision-making in the present. The whole point in forecasting is to facilitate better decision-making.
And you need to keep revising forecast by using the previous one as reference point to ask what has changed. The most important part of forecast is not the prediction of what is likely to happen, but the strength of the logic behind the forecast. Even broken clock is right twice day. Without understanding the logic behind forecast it is foolish to pay attention to it.
These are turbulent times. So, has your view of the world changed over the past four or five years?
Yes. Even I have been surprised by how badly things have played-out over the past few years. Anyone who believes in the “great man theory of history” should take cold comfort from this. We have seen how putting one person versus another in the White House has changed the world.
I view the past decade as lost opportunity. The United States missed huge opportunity in the 1990s to build civil society and lay the foundations for the next century. All of this has been made vastly worse by the deeply wreckless behaviour of the United States since September 11, 2001. My view of things is much more pessimistic now than it was in the 1990s. But isn’t everyone’s? What has been shocking to me is the stupidity of institutions, not only in the United States but globally.
How have the risks for business increased?
The uncertainties for business have increased dramatically. variety of factors are responsible. In the 1990s the business impact of the world wide web was very simple. You can say it in one sentence: “In cyberspace there is no distance between two points.” The web caused the so-called “new normal”, where suddenly small companies had the clout of big firms because of the information tools. Your nearest competitor was no longer the company just down the road, but one half world away. We are all trying to adjust to that and the layer upon layer of other shifts like truly global labour pool for knowledge workers. We now see tens of thousands of knowledge workers in India working for companies domiciled in other parts of the world.
Should companies be doing formal scenario planning?
No. In fact I discourage formal scenario planning. There isn’t time for it. What is happening to forecasting now is what happened to strategic planning few decades ago. Remember when corporations had formal strategic planning departments? They would plan strategy for the entire enterprise and pass it down to the operating units for implementation. That started to disappear in the late 1970s and 1980s as operating units took responsibility for formulating their own strategic plans. Strategy became everyone’s business.
The same thing is now happening with futures research and forecasting. Everyone should be concerned with it, not just forecasting professionals. So just as we have driven strategy deep into the organisation, today organisations need everyone to be forecasting and looking for change indicators. The organisation of the future must be deeply network-centric and flat like pancake, not the traditional pyramid structure.
What simple methodology can forecasters use to predict change?
The best way to gauge the present against future changes is to look back twice as far as you look forward. If you want to think about life in 2030 for instance, look back at the 1950s and ask how different is life and work today from what it was then. In some ways it is dramatically different. I can hold realtime video conference with colleague in Tokyo and think nothing of it. That was science fiction back in 1950. On the other hand, we are still driving cars and even in periods of rapid change the things that don’t change are vastly greater in numbers than things that do change.
Do the indicators gathered from multiple points within company need to be consolidated centrally for analysis?
No. We have examples of very effective organisations with no individual formally in charge. Look at Linux and the open systems movement. There’s no CEO at the top and that’s why Bill Gates can’t kill it. Another example is Al Qaeda. There’s no one in charge of it in meaningful way. People are wrong when they refer to Osama bin Laden as quasi CEO. We’ll see organisations emerge in the future which simply don’t have traditional structures with CEO sitting at the top. They’ll be very flat, network-based, outward-looking and with weak centre. The main driver of this is the quest for speed in decision-making and execution.
Will this evolution in organisational structure apply to small and medium-sized companies?
Absolutely. If you think back to the period of the dot-com bubble, people said big companies were dinosaurs and the future lay with smaller, nimbler firms. That was correct. But it was an over-simplified picture of things. In the old economy, economies of scale really did matter. Big was better. Now, economies of structure rather than economies of scale matter. Big organisations need nimble, lightweight structures. Small companies have an intrinsic economy of structure because everyone can see the consequences of their actions, where they fit and what needs to be done.
Which key technologies will have the biggest impact on how companies operate in the next 10 to 15 years?
There are three of them and they are already here and working: ubiquitous networks, wireless and sensors. We continue to play out the web and ubiquitous networks. Wireless plays into that and matters because it delivers cyberspace not just to our desks, which is where it arrived at in the 1990s, but to our daily lives – in our pockets, cars or briefcases – and without being tethered to wire, desk or office.
But there is deeper implication. The internet of people is now being supplanted by an internet of devices attached to the network. That is happening because of sensor revolution where we have very inexpensive sensors becoming quasi eye and ear senso
