Strategy & Business Development

Predict the future and develop a better strategy

It may sound strange, but your ability to predict the future is firmly connected to your ability to develop a successful strategy. Because, a strategy is basically “just” a simulation of what we think the future will look like.

But as you know, things don't always turn out the way we planned. This is often because something went wrong in the simulation phase.

If you want to make fewer simulation mistakes (and develop a better strategy), it's important that you understand how your brain works when it predicts the future, and where you typically make mistakes.

Prospection: Seeing into the future

All animals can predict the hedonistic (the pleasant or the unpleasant) consequences of events they have experienced before. But humans are different because we are capable of predicting how future events will unravel without previously having experienced something similar. We, so to speak, experience the future by simulating it in our brains.

Daniel Gilbert et al. calls this “prospection”. Something he defines as “looking forward”. In other words the opposite of “retrospection” which means looking back.

He investigates how we use our memory and our understanding of context in both the present and possible future to simulate what the future will look like. This also involves an emotional element, which he calls “prefeeling”, where we attempt to create an emotional simulation of our future experience in order to find out if the event is a threat or a reward.

Gilbert demonstrate that our ability to predict the future is only trustworthy as long as feelings and context are the same, while we imagine the experience and when it actually happens.

According to Gilbert there are four mistakes in our “prospection”:

  1. Simulations are unrepresentative. We create our simulations from our memories. But those are not exact images of the past, because we, for one thing, tend to over- or underestimate the meaning of the experience. For we don't remember the most representative event, but rather the latest, the worst or the best. For example, when you ask people, who've previously missed a train, to imagine being late in the future, then they are more likely to remember their worst experience of being late instead of their most typical experience and overestimate how bad it is to be late for a train.

  2. Simulations make things essential. When we simulate future events, we generally only recreate the most essential elements and leave out the less important things. For instance, when we imagine “going to the theatre next week”, then we don't imagine all of the details surrounding the experience. Instead, we imagine the most important things that defines “going to the theatre”: We imagine a stage full of actors, but we don't imagine how to park the car, turn in our coats or find our seats. The problem with such simplifications is that they leave out elements that can have huge influence on the future event. This process of essentializing events is enhanced, the further into the future the event is going to take place. And this is part of the reason why you promise to go to events that you later regret, when the time for you to actually attend approaches.

  3. Simulations are shortening. If we were to imagine everything that had to happen during an event, the simulation would last as long as the event itself. Therefore simulations are of course shortened, so that they represent a collection of important moments of a future event. And we have a tendency to focusing on the early moments especially. This is because it's much easier to imagine how you are doing 7 days after winning the lottery than it is 244 days after. This shortening means that we tend to focus too much on the period that contains the most pain or pleasure.

  4. Simulation is decontextualizing. We typically don't take into account how contextual factors (if we are hungry, happy, tired, the weather is bad or the traffic is hectic) affect our actions and emotions. Even though contextual factors such as the weather or the traffic situation could have a meaningful effect on the future, we ignore it, if it isn't currently present. When contextual factors are considered more carefully, our predictions are more accurate.

Two exercises that makes your predictions more accurate

So how do we improve our ability to predict the future and gain a better match between our present and future selves? According to Geoff Grahl the solution is quite simple:

When you are faced with the decision of whether or not you should do something in the future, try to imagine that you are doing it now. If you've promised a friend that you'd help him move next month, imagine that the moving takes place this weekend. Do you have the resources to do it now? If not, you should consider what has to happen between now and in a month to make it possible.

On an organizational level this can be more difficult, because the strategic planning processes are adjusted to more linear and structured work processes. Except from choosing a more “brain friendly” way of making strategies, there is one tool that can help you make more realistic predictions of the future. Geoff Grahl calls this method “reverse visioning”.

In all its simplicity what you do is, have the the strategy team regularly look back on the latest period in order to determine which events lead them to their present situation.

Source: The Neuroscience of Strategy: Do You Really Know Your (Future) Self? (Geoff Grahl – NeuroCapability)