DEARBORN -- Predicting the future in an ever-changing world isn’t ever easy. But for Ford, it’s a vital aspect of planning. As the Global Consumer Trends and Futuring Manager for Ford Motor Company, Sheryl Connelly is responsible for identifying and tracking trends that will shape consumers' value, attitudes and beliefs in the future. In her monthly column on @Ford, Connelly shares unique insight into trends outside the automotive industry with specific focus on social, technology, economic, environment and political arenas.
When I worked as a zone manager for Ford Division, I would routinely ask my dealers to predict how many vehicles they were going to sell each month. One day, a dealer responded, “I have absolutely no idea. My crystal ball is in the shop for repairs, and I don’t expect to get it back until next month.” At the time, I was more than a little frustrated with his response. Years later, however, I realized that I may have been too hard on him. Based on his years of experience and success in the marketplace, asking him to predict sales seemed to be a perfectly reasonable request, but expecting him to consistently predict sales month after month with any sort of accuracy was not.
It doesn't matter how much experience or information you have, no one can predict the future. Indeed, if that dealer could actual do so, wouldn't he have been better served playing the lottery than selling cars and trucks? In light of all of this, it is somewhat ironic that for six years and counting I have served as Ford’s in-house “futurist.” Technically, my official title is Global Consumer Trends and Futuring Manager, but my role is to use trends to offer insight on what consumers may want years down the road.
Making assumptions about the future is necessary to conduct business, particularly for companies like Ford that have extremely long lead times in terms of investment and product development. But it is not an easy task. One of the most common mistakes organizations make is operating from a single set of assumptions about the future. For instance, assuming that China will continue to grow at an annual rate of 8%, that oil prices will remain under $150 per barrel or that the European Union will ensure that people can travel freely throughout Europe are all reasonable assumptions based on historical data.
But consider the April 14 eruption at Iceland’s Eyjafjallajokul volcano, which forced most countries in Northern Europe to shut their airspace between April 15-20, grounding more than 100,000 flights and an estimated 10 million travelers worldwide. The shutdown cost airlines more than 1.6 Euros (or 2 billion USD) while the financial consequences to other sectors continue to grow. Dramatic disruptions such as this are easily missed when you only prepare for the most likely scenario.
Conceding that we can never know for certain what the future holds has great benefits. It forces organizations to be nimble and contemplate multiple futures. The ultimate goal is not to guess which future is most likely but to put together a plan that allows an organization to thrive regardless of how events unfold. Once you accomplish that, you no longer need a crystal ball.
That is not to say that there are not occasions when business forecasts are surprisingly accurate. In 2004, Ford conducted a scenario planning study known as Project 2015 which outlined different futures of what the world might look like in the year 2015. One of the four futures outlined a story of global economic collapse where U.S. auto manufacturers were on the brink of bankruptcy and the United States government was unwilling or unable to come to their aid. The story was strikingly similar to the headlines we saw develop in 2008 and was used within Ford to determine the robustness of our existing strategies.
No doubt, the 100-plus Ford employees who helped develop that scenario take some measure of pride in the insight provided by their narrative. But they are not likely to let it go to their heads, because in the early days of developing the scenarios they also briefly entertained a future where aliens landed on earth. The conversations were far reaching because they weren't trying to predict the future. They were simply engaging in a discussion that kept posing the question "What if?"