05/05/2016

The Practical Futurist (no, that’s not an oxymoron…)

Glen Sarvady May 5th, 2016
Categories
Payments

Sheryl Connelly

I’ll admit I entered Sheryl Connelly’s keynote session at the NACHA Payments conference with a healthy dose of skepticism. I’m usually underwhelmed by futurists- I generally find them to be skilled public speakers espousing notions too high level for practical application. Connelly is a refreshing exception. As Chief Futurist (they employ more than one?) for the Ford Motor Company, her take on anticipating change and building it into one’s long-range planning left me with a solid page of notes I could productively incorporate into my own approach.

Connelly’s presentation served as a savvy counterbalance within NACHA Payments’ overall agenda. With the tactical aspects of this fall’s Same Day ACH rollout and updates on the Fed’s Faster Payments initiative playing a leading role in the conference content, NACHA wisely focused its general sessions on innovation and long term thinking.

Directly from my notepad, here are my key takeaways from Connelly’s talk:

Recognize that no one can predict the future, but that there is still value in trying. Connelly drew an interesting parallel- getting married is an attempt to predict the future. Statistically we know that over half of marriages end in divorce, yet by tying the knot we are in effect predicting we can beat those odds. I’m also reminded of noted forecaster and DX15 speaker Nate Silver, who will take pains to clarify that he does not make predictions; instead he assesses probabilities and lets his audience draw their own conclusions. One could call this linguistic sleight of hand meant to sidestep the possibility of being wrong, but it makes Silver’s insights no less valuable.

Realize that the past is not a reliable predictor of the future. We’ve heard this a thousand times in investment disclosures- for long-range planning it applies in spades.

Beware of SWOT analysis. Connelly sees this standard strategic planning tool(strengths, weaknesses, opportunities, threats) as too inwardly focused.  Identifying your firm’s strengths is fine, but be aware the fickle marketplace could easily pull the rug out from under you at any moment.

Be provocative, but be plausible. Challenging conventional wisdom is central to the process, but only to the extent that the resulting what-if analysis remains constructive. The goal is to slow down the conversation, spending time talking about low-probability events (the so-called “black swans”), so that you’re not blindsided.  This is what defense analysts do.

These will not be linear discussions. World events will have numerous downstream impacts: social, technological, economic, political, and environmental.  Change the assumption behind one factor (how many people expected oil prices to expand/contract by a factor of four so rapidly, for instance?) and others are likely to be disrupted.

Beware “The Cult of Curation.” The explosion of available information has created some surprising power shifts as consumers and businesses struggle to make sense of it all. Unlike past cycles, this influence often accrues to faceless sources- note the unexpected power of “mommy bloggers.”

The payments space is hardly immune to groupthink and unanticipated trends. Articles touting the imminent “death of the check” can be found dating back to the 1990s. On the other hand, the conventional wisdom on Apple Pay 18 months ago envisioned a far different adoption curve than we have experienced. Our protracted low interest rate environment would have been incomprehensible twenty years ago, while the long-threatened disintermediation by non-bank startups is accelerating though not from the points of attack many had envisioned. Based on a quick poll of the room Connelly remarked that payments professionals seem more inclined than her usual audiences to have consulted a psychic. Given these experiences, perhaps we shouldn’t be surprised. Nonetheless, give me a well thought-out probability analysis over a crystal ball anyday.

This content is accurate at the time of publication and may not be updated.