Predictaterrible

A bit late, as we stumble through the second week of 2024. But here are my predictions for risk, ethics, compliance, sustainability, and ESG in the coming year…

… zip, zero, zilch.

That’s right, I don’t have any.

Why?

💸 According to some reports, financial analysts are accurate a whopping 47% of the time.

🏛️ Political analysts didn’t fare much better, with around a 50% accuracy on predictions for world events.

🐄 Even livestock “experts” were less accurate (at the median point) than amateurs when guessing the weight of a cow.

Of course, knowledge helps. Or actionable intelligence, in the risk-speak I first learned. But that’s not why I’m not making predictions. The exercise is not especially helpful. It becomes a bit blinkered and myopic, pushing us into Y/N territory, which is generally a bad risk management idea.

Better to think in scenarios (sometimes called “thinking in bets”). Then, identify the knowledge gaps within your assumptions and test those that can be proven. This exercise gives you actionable intelligence; where it’s lacking, we can (often) use “triggers.” For instance, if my business relies on a volatile commodity as an input in the supply chain, it’s unhelpful to just forecast price increases or decreases. Trigger events – conflict, blockages to shipping routes, government regulation, supply/demand, etc. – will act as cues.

The process of considering these triggers leads us, almost by stealth, into business continuity planning and broader organisational resilience. Much more helpful for effective risk management than betting on a coin toss!