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How profitable is prediction?

By Ian Wharton 18-12-2014

It strikes me that the technology industry concerns itself somewhat obsessively with unknown change. I have even met people whose job title is ‘futurologist,’ and they seemed busy. On behalf of our clients, it’s the hope that we can anticipate the turbulent shift – the dropped shoulder before a right hook – that puts titan brands on the ropes. The foresight that provides our Polaroids with the Instagram, our Blockbusters with Netflix, Encyclopaedia Britannica with Wikipedia. We know the story well enough to see the consequences for the incumbents, but the method of perception is perhaps misplaced.

There are really only a handful of organisations making big wagers based on prediction, Google being one. Maybe the rest of us are better served by focusing on more relevant and far more actionable considerations for businesses. Blockbuster, Polaroid and Encyclopaedia Britannica didn’t need to predict online streaming, the iPhone, or crowd-sourced knowledge. They needed two things. One: an awareness of the current world around them – simply, an understanding of human behaviour and the context in which we exhibit it. And two: crucially, business models that allowed for swiftness – a disregard for complacency that would have allowed them to embrace any big-ticket innovation that can exploit these human truths with haste. In my experience, when businesses spend too much time questioning ‘what may be,’ it’s usually more paralysing than profitable.

In the 1960s, American economist Theodore Levitt wrote an influential article titled Marketing Myopia in the Harvard Business Review. A myopic culture, to Levitt, was one of shortsightedness due to its inability to accurately predict the future. He attributed the demise of several industries to the notion that they were too heavily focused on ‘their’ technology and where it was headed, rather than being aware enough – or swift enough – to see and act on the opportunities around them. He argued that had railroad executives seen themselves as being in the ‘transportation business’ rather than the ‘rail business’, they would not have been displaced by planes, cars and trucks, but instead would have capitalised on the innovations as they manifested. The executives focused their investments on getting better and faster rail technology, rather than a vision based on the fundamental human need they were meeting – that people will need to move themselves and their freight.

Today things are no different. Having the vision (and gumption) to make what happens in the future better than what’s happening today, is best when mapped against immediate human needs and behaviour. For instance, right now we know that no matter what product, service or piece of communication, it would be a leap to believe our collective impatience will lessen over time. There are no signs that consumers want to wait longer for content, or to spend more time negotiating it. This applies to interaction as much as access; we want instant gratification. When something, or lack thereof, no longer provides immediacy – but rather complexity and interruption – we’ll look to find solutions elsewhere. And consumers re-evaluate what defines ‘immediate’ continuously to find the path of least effort; loyalty to a brand is quickly overridden.

Blockbuster should have woken up each day and asked itself: “Our mission is to connect people with the most desirable home entertainment as effortlessly as possible – how do we do that better today, with what we have in front of us today?”

Similarly, the way we make our decisions affects what brands we involve ourselves with. Kahneman et al alongside ‘nudge’ literature demonstrate almost without fault that we are not the logical and highly deliberate decision-makers we believe we are. We are influenced easily by impulse, instinct and serendipity. I think this is a good thing. But it means for all the big data, for all our ability to quantify the minute detail of our interactions, unless we can make people feel something with the findings, unless we are able to contribute some emotional bond with our combination of art and technology, it will be to little avail. We have a technological embarrassment of riches. We don’t need more, we need meaningful.

Consider also the fact we generally value what we don’t have, or what there is little of. Perhaps we should therefore introduce some scarcity rather than abundance in products and services, i.e. help me choose, rather than overwhelm me with choice.

All of these things affect success today. And because they are deep-rooted traits of humanity, they will also likely endure. Combined with the bravery to build on them, to take the leap of faith quickly, to understand that the only thing that won’t change is the need for change, we can create exceptional new businesses and strengthen existing ones. We should ask ourselves, ‘What business are we in and what human need are we meeting?’ We don’t need future-gazing to find innovation, we need empathy and action.

today's correspondent

Ian Wharton Group creative director
Ian-Wharton PERSP

Ian is group creative director at global ideas and innovation company AKQA and author of bestselling book Spark for the Fire: How youthful Thinking Unlocks Creativity. He was previously a partner at tech startup Zolmo, leading the creative for the Apple Design Award-winning apps for Jamie Oliver, some of the top-grossing apps for iPhone and iPad with over 12 million downloads. During that time, Zolmo was ranked in Design Week’s Top 50 Design Consultancies.

Having graduated best-of-show from university with short animated film Solar (2007), earning a Royal Television Society Award, Ian later joined visual effects company The Mill as an art director, designing commercials for Audi and EA and game trailers for Sony. He has since been named an Art Directors Club ‘Young Gun,’ one of BIMA’s Digital Hot 100 and Campaign magazine’s A-List and contributed to the number-one best-selling Mobile and App Case Study Book. He serves on juries for D&AD student and professional awards and mentors at the School of Communication Arts, the UK's top ad school.