Have you ever seen markets shift as quickly as they do today? GM found out that as fast as they could go from concept to delivery and debut a new car model the market no longer supported such a vehicle. Technology and customers shift like a flock of birds on a windy day making CEO's lose sleep.
What can you do about the whipsaw changes we are seeing as the norm in the marketplace? Get better at predicting those changes, and get more comfortable with accepting mistakes.
We are standing at the cross roads of market forecasting and zero tolerance of mistakes. Something has to give. Ever notice how infrequent the weather forecaster is in her weekly predictions for what weather is approaching your area? Imagine if she were being held to the standard of zero tolerance of mistakes. What to hear her forecasts? "It’s going to be dark tonight, and the sun will come up in the morning – everything else is too sketchy to predict." Does that forecast really do anyone any good?
This week I am going to talk about how to view market predictions from a technology, customer and product delivery standpoint.
Today I am here to encourage you to get comfortable with making mistakes. No one can predict exactly what is going to happen next in your marketplace. The key is to be right most of the time and be able to take immediate action on those correct predictions.
I understand the evolution of zero defect products and thankfully that mindset has improved product quality extensively in many industries. I am in no way saying to relax your production standards. I'm saying you need to be willing to tolerate some miscalculations in long term predictions in order to have any meaningful predictions at all.
Go back to the weather forecaster. When she is asked to make predictions with no mistakes, one of two things happen. Either she makes the safest predictions a person can make (dark at night and light during the day) or she inspires widespread panic, "I know a tornado is coming to this general area, and since I am not allowed to be wrong, everyone run for cover!" Weather is unpredictable and so are markets.
Years ago, the music industry knew if one in 20 bands they promoted and invested in had to be strong enough to make up for the loss on the other ones who failed. The challenge was in knowing who were the winners? More market predictions are going to be the same way. Apple lost millions on the Newton, but they made up for it with the ipod and the iphone.
The key is keep moving and making better educated predictions – something you can't learn if you have to hit the bull's eye every time. Sometimes you have a band that comes out of nowhere and becomes a megahit. Be ready to capitalize on those missed predictions.
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