Denial and Defensiveness, Part 3

Inevitable Surprises
by Peter Schwartz

(Page 5 of 5)

I am hardly the first to make these points. Indeed, for the past thirty years, ever since the publication of Alvin Toffler's book Future Shock, they have become part of the conventional wisdom. And yet most of us, in our decision making, are still not acting as if we truly believe them. The greatest challenge before us-on the personal, organizational, and societal levels-is to master our own accelerating power, without being swept away by it.

This does not necessarily mean taking hurried dramatic action. The dot-com bubble has shown the downside of rapid movement. The trick in navigating any set of rapids is being well prepared for all types of movement, and aware of the ways in which movement itself is changing. That's not an easy task, for rapids change all the time. The bottom of the river may only shift slowly, but the water level changes with the season and the weather. The rapids in the late spring can be a raging torrent of white water, while in the late autumn they can vanish as the water level drops. Rafting in the spring requires great skill and courage. The thrills are intense but the risks of falling out and being swept away by the current are great. Rafting in the autumn requires persistence in a slowly meandering river. The risk is running aground. The ride may seem less thrilling, and the water stagnant; but there is the steady satisfaction of endurance and balance. Navigating the future means being prepared to act in any season, and to shift from the mindset of one season to another as the environment changes. It means learning to recognize the rhythms of change before us, to avoid denial about them, and to practice our responses to them before they are upon us.

If you feel overwhelmed by the potential of surprises, your view of the future will be dark. You will continually expect to be hit by one unanticipated crisis after another, and your expectations will be met. On the other hand, you can approach the future with a sense of lighthearted enthusiasm-thoughtful, but eager to see what is coming next.

More than twenty years ago I was spending a Saturday afternoon at the Tassajara Zen Center not far from Monterey, California. It was a gorgeous day, and several of us were making our way down a slope clustered with pools, waterfalls, and rocks. The surfaces were very slippery, and most of us moved gingerly from one rock to the next, sliding along them, sitting on our bottoms when we felt it was too risky to stand. Suddenly a young woman came gliding down the hill. She looked like a dancer-slipping from one rock to another effortlessly and gracefully, perfectly balanced, never stopping for a moment. She had been walking those rocks so long, she felt comfortable on them. And it made the rest of us realize, suddenly, that the rocks were not such a dangerous environment at all. Not if you knew them.

The image of her movement has stayed with me, because I've seen people in many similar situations since then. We are terrified of movement because we don't know the environment very well. And then someone comes along who has thought about it, who is prepared, and who has a kind of uncanny grace and ability to move through peril. And even find time to be delighted by the challenge.

The Inevitable Surprises of 1978

This book looks ahead twenty-five years-the timespan of a generation of people. Before we get started, it's natural to look back twenty-five years and calibrate our judgment a bit. I had been in the scenario planning game for six years in 1978; working first at SRI International (formerly Stanford Research Institute), and then at Royal Dutch/Shell's famous Group Planning Department (where Pierre Wack and other colleagues developed the scenario-planning method, still in use today, that I discussed in my book The Art of the Long View).

What could we have seen in 1978? What were the inevitable surprises, visible then, that shaped our world of today?

• Oil as a commodity: Although we were still in the midst of the energy crisis, we knew that oil prices would have to fall. The industry was moving much too rapidly toward a multiple-sourced, flexible, trading-oriented model. And growing energy efficiency was driving down demand. OPEC would not be able to keep the price boosted artificially high forever. And, in fact, it didn't; the price crashed in 1986.

• The end of the Cold War. It was obvious to anyone who looked past the ideology of either communism or anticommunism that the Soviet Union could not much longer afford the expense of keeping its massive police-state empire intact. We didn't know exactly how it would end, but we knew it was unsustainable.

• Radical transformations in the world of communications. Fax machines, modems, electronic mail, satellite communications, cellular phones, and rudimentary precursors to the Internet already existed. The first wave of enthusiasm for personal computers had just begun, and some of the early applications (like computer-based spreadsheet programs) had appeared. It was clear that the results would be immense change in human communications capability and information gathering-as immense as the changes in mobility and infrastructure engendered by the automobile starting a hundred years before.

• Nuclear power would vanish as a meaningful energy option. The costs and risks were apparent.

• Japan would go into a boom and then a decline. The short-term protective benefits and ultimate systemic risks of their keiretsu-based financial structure (a structure of interlocking ownership and crony capitalism) were apparent.

• The U.S. would be hit by a big violent-crime wave in the 1980s. This was demographically driven; as the population of young men rose, so would crime.

• The U.S. Savings and Loan Crisis (or something like it). Deregulation in the U.S. and UK was a clearly unstoppable trend. Whenever there is massive deregulation of a previously highly regulated industry, there is a generally a crisis as the new institutions, without much memory of the old crises they engendered before regulation, try to test their limits.

• The growth of the Asian tigers and the pressure on China to change course after the death of Mao Tse-tung in 1975. It was not yet clear how China would move, because not much was known about the Chinese Communist party. But it would have to move somehow, because it, too, faced the same innate structural pressures that the Soviet Union did.

• The rise of radical political Islam. We were about to see the Iranian Revolution, which deposed the shah of Iran and created a Muslim state under the Ayatollah Khomeini.

If we look deeply enough, can we see the counterparts to these changes that are coming over the next quarter century?

Copyright © 2003 Peter Schwartz, published by Gotham Books, a member of Penguin Group (USA) Inc., all rights reserved, reprinted with permission from the publisher.

About the Author

Peter Schwartz is cofounder and chair of Global Business Network, part of the Monitor Group. He is the author of The Art of the Long View, and coauthor of The Long Boom and When Good Companies Do Bad Things. He has been a leading advisor to governments and major corporations. A highly sought-after speaker for business symposiums, he writes the monthly "Scenario" column for Red Herring magazine.