Projecting Risk with Data Aggregation
A common de-risking method is to aggregate risks and apply the average. Technically, it's not 'de-risking' (it's actually converting uncertainty into risk) but a great way to quantify the unknown. Study on uncertainty vs risk: https://www.discernable.io/post/risk-vs-uncertainty I'm wondering if we can apply the same principle to our careers. If I average out all of the successes and failures in different roles, can I predict my success in the next role? Maybe we could even sort for industry or role categories (say based on solo vs teamwork)... I tried going back 5 years and found: -I disproportionately enthuse into a role when it is not well suited but pays more than 20% above an existing salary. -I fail (fired or quit) at greater than 70% of roles at large corporates where I enter at 1 or 2 seniority levels lower than my history. -I succeed in greater than 90% of roles where I lead a team, regardless of apparent cultural or industry 'fit'. -40% of my startups succeed, 40% fail, 20% are lukewarm profitable but earn less than the average wage (AUD75k). So when I'm next looking for a new role, I intend to screen it through my historical percentages to determine a risk rating. Try this illuminating exercise!
Every Business is Different
I love my friends who are business advisors. They really just want to help business owners do better business - but when they teach them how to 'project', they are really teaching them how to 'predict', and the real value they provide is TEAM. Without reference to industry specifics they rely on personality assessments (DISC etc) and generalised SME tools (some of which I've created and used in consults). Honestly, it's not the analyses or fancy regression/projection models, it's the 'in the trenches' predictions and local strategies that make all the difference. Most of all, it's bringing a counsel environment to what are often lonely entrepreneurs. #teams definitely create prickly moments, but they are more effective in the end. #bettertogether Full podcast espisode on predictions vs projections available here: https://www.discernable.io/podcast/episode/226d3247/6-find-your-strength-uncertainty-or-risk
Time to Grieve and Adapt to the Unknown
I feel like many are crying for stabilisation, for a slowing of change, a return to certainty. But I'm not sure that's even possible - the pace of the societies we have built atop this spinning blue marble is out of control. Time to grieve and adapt? Technological disruption is increasing uncertainty and we are seeing legacy companies get left behind as their projections of market share, revenue, etc are derailed. Increasingly, costs are the only metric suited to projections! Big data and the internet of things (IoT) is fighting in the opposite direction and making everything more measurable but overall I don't think it's keeping up with the destabilisation of our world as barriers collapse, distances compress, and timeframes contract. The battle between risk and uncertainty (distinguished by Frank Knight): https://www.discernable.io/post/risk-vs-uncertainty
Tesla Predictions Always Fail
Frank Knight famously distinguished between uncertainty and risk in 1921 and we still get it confused. When I started my first business in 2004 I used to project (a risk paradigm) revenue and growth and it was a mistake. I saw the same error being made 15 years later when I was at Yamaha selling helicopters. I've started predicting (an uncertainty paradigm) as much as possible and it is proving more accurate! It reminds me of fundamental vs technical trading of currencies/stocks. I think the Tesla haters are actually projecting and it's not working. Everyone keeps putting out failed predictions of Tesla's demise. That's because they fail to distinguish between PREDICTions (use with uncertainties) and PROJECTions (use with risks). They are projecting failure from current and past data, but Tesla creates opportunities (as opposed to discovering opportunities) and therefore needs to be predicted, not projected. I can vouch for this since working for Elon - projections for Tesla never work. Tesla keeps reinventing processes, breaking rules and revolutionising legacy items like heatpumps in the Model Y. You cannot project Tesla performance based on current or past data. They are just too consistent in creating new paradigms. Full podcast episode on Uncertainty vs Risk: https://www.discernable.io/…/6-find-your-strength-uncertain… #business #predictions #Tesla #elonmusk
The World is Uncertain Not Risky
The world is increasingly uncertain, not risky, because the technological age disrupts the game every decade or so. Despite the advent of Big Data (which quantifies everything into measurable risks) it's time to get comfortable with uncertainty and their only antidote: accurate predictions, and place less importance on projections. Having finished my MBA recently, I noticed there was a trend toward embracing disruption, de-emphasising projections in favour of predictions, and courting slippery futures instead of making 'reliable' or 'solid' forecasts. This is very different from when I first went to university where projected data was more the 'gold standard'. It's a sign of the times and we all need to get comfortable with uncertainty, ambiguity and all things slippery! Full podcast episode available here: https://www.discernable.io/podcast/episode/226d3247/6-find-your-strength-uncertainty-or-risk
Politeness is NOT the answer. Empathy is!
Carnegie Mellon University (Computational Linguistics) announced an A.I. that can make our speech more 'polite' by making it 'less direct'. This could be a mistake as the correlation between power dynamics and politeness have been well established by academia. Making people less-direct will only result in less robust contributions and stagnated career progression. Politeness is not the answer! Empathy is. For all the times I've failed to be direct with colleagues, staff and bosses, it's been because of INSECURITY. For the few times I've been too direct, it was because of INSECURITY. Too wrapped up in my own anxieties, I failed those I worked with chiefly because I couldn't see things from their perspective. I just didn't have any mental ability remaining to donate to their position. #empathy is a profound strength that gets neglected as a weakness or a 'soft skill' but it's a true indicator of self-confidence. Thankfully, I am seeing it ever gradually more in myself and in fellow business leaders. I think the strength of empathy it will soon be in vogue! #artificialintelligence #manners
Facebook is Still King of Social Traffic
Facebook is still the king of social traffic for publishers globally (sitting at 14.5% today), but that trend is actually declining since 2015 despite a long bull run since Jul 2018. It seems direct traffic and search pushes most traffic to news sites, not social. This reveals the disproportionate weight we place on social media to tell us the zeitgeist. There's a lot of people out there, using the internet (not just 'old luddites') and getting to news publishers' sites without going through the echo chambers of social media. Full podcast episode available at: https://www.discernable.io/…/6-find-your-strength-uncertain… #news
Projections vs Predictions
This is the difference between PROJECTIONS and PREDICTIONS. We shouldn't confuse the two, because projections relate to risk management whereas predictions are required for uncertainty management. Applying the wrong strategy results in a car crash. I'm part of three start-ups right now. In two of them, we have successfully switched from projecting to predicting for the short term (1-3 months) and in scenarios that are more news-prone. For longer time frames and for trend analysis and cashflow modelling we are using projections - which are extrapolations on historical data. The distinction between projections and predictions is rarely made by business-strategists, but it's like upgrading to a from a sharp stick to a scalpel. You can be far more precise and make minor corrections. Full podcast episode here: https://www.discernable.io/podcast/episode/226d3247/6-find-your-strength-uncertainty-or-risk
Why the Facebook Phone failed.
Do you remember the Facebook Phone? Probably not! It was very forgettable. Why did they try and insert themselves into a risky market with a 'me too!' phone? They should stick to their strength of creating markets and swimming in 'blue oceans'. Full podcast episode at https://www.discernable.io/podcast/episode/226d3247/6-find-your-strength-uncertainty-or-risk