May 10, 2019

“The Past is the Only Thing We Know”

Peter Kennedy
Managing Principal

The quote comes from John Lukacs, known as a maverick historian who died this week at the age of 95. Lukacs was a prolific writer and a keen observer of world events, in particular the politics and culture of Europe and the United States. He had a distinct point of view that defied facile categorization. Born in Hungary, Lukacs was a refugee from both Nazism and Communism. He was a witness to many of the horrors of the 20th century.  

Our colleague Kevin McDermott flagged a Lukacs quote that we wish we had written.  It reads, in part:

The past is the only thing we know. The present is not more than an illusion, a moment that is already past in an instant…And what we know about the future is nothing else than the projection of our past knowledge into it. 

This resonates. FSG scenario consultants like to point out that there are no data, big or small, about the future, and therefore all efforts to somehow model the future are inherently limited. 

Beyond the very short term, the application of data about the past to decisions about the future is fraught with problems. 

Periodically an organization will approach FSG with a request for help building numerically based “scenarios” to create a robust market forecasting model. If the scenarios are used to simply inform model variables for short-term forecasts (when uncertainty in lower and more boundable) then this kind of exercise can be useful. 

The John Lukacs dilemma kicks in when attempting to model more complex, longer-term uncertainty. Not only is it difficult to properly calibrate model variables in future contexts. The variables themselves may be the wrong ones.     

This is why, when the need is for longer-term strategic insights, FSG prescribes qualitative scenarios, that both examine the fullest possible range of change factors and take into account unique cross-impacts and unprecedented discontinuities.  If rigorously developed and thoughtfully deployed, these scenario frameworks can in fact help inform downstream modeling efforts. But not before the scenarios are applied to purely judgmental strategy workshops in which leaders wrestle with scenario-specific challenges and opportunities, free of distracting and misleading numbers and probabilities.

This is what FSG scenario consulting teaches, and we think the late John Lukacs would agree. 

Thoughts?