The Outside Game

Photo credit: Pink Sherbert Photography

Being an “insider” generally carries a positive connotation. After all, who wouldn’t want to be privy to information unavailable to others? Being an “outsider,” meanwhile, is often seen as a negative, conjuring images of a person who is isolated or detached.

Maybe it’s time to turn all that on its head.

McKinsey Quarterly has an excerpt from Thinking, Fast and Slow, a new book by Nobel laureate Daniel Kahneman. The author recounts trying to forecast how long it would take him and some colleagues to write a textbook. They came up with an estimate of about two years.

In reality, it took eight years.

So what went wrong? Kahneman says that their big mistake was to look only inside—to see how far they’d already come and how fast, and to extrapolate from there. A better approach would have been to look outside to other cases of people trying to write textbooks. Had they done so, Kahneman’s group would have likely recognized that most textbook projects start fast out of the gate, but invariably get bogged down by all manner of unforeseen problems and missteps.

Peter Drucker would surely have found Kahneman’s insights fascinating, for the challenges of forecasting interested him greatly (as we’ve noted before). “Strategic planning is not forecasting,” Drucker wrote in Management: Tasks, Responsibilities, Practices. “The future is unpredictable.” Nevertheless, he added, decisions should be arrived at “systematically with the greatest knowledge of their futurity.”

[EXPAND More]In Managing For the Future, Drucker addressed the importance of getting an outside vantage point. “Walking around within the company is still to be recommended,” Drucker noted. But “the important thing now is to be enough on the outside of the company to be able to stand back and draw the right conclusions.”

For instance, Drucker said, Ford and General Motors initially couldn’t understand–because they failed to look outside of themselves–that the word “quality” meant something different to customers than it meant to company officials. Yes, American cars might have better features than Japanese cars, but customers were looking for something reliable that was also easy to repair. Had they freed themselves of an inside perspective, GM and Ford would have been able to see this more clearly.

Have you experienced work-related forecasts that were off the mark? Would an “outside” perspective have helped?[/EXPAND]