Looking into the Future

This happened around the same time last year when I was working for a very large company here in India.

I was working on a project that would be reviewed every week by our director – a charismatic and dynamic person. The meeting would be attended by several of his direct reports to discuss the progress of the project.

So, on this particular day, once everybody had settled in for the meeting, our director opened the discussion by asking a completely unrelated question to the 8 – 10 people present and going round the table seeking answers.
The question was very simple – “What, in your opinion, would be the level of the Sensex one year from now?”

Those would follow the Indian stock markets would relate to this easily. The stock market had started its downward trend and had fallen from a high of 20,000 to around 15,000. The global cues were very discouraging but most of us Indians were still in denial about the impact that the US problem would have on India. Most of us felt that the Indian economy would continue to grow, it was insulated from the global meltdown and that India did not have the housing mortgage problems.

So, when our boss asked the question, all the senior people started giving their best guess. To be fair to them, most predicted that the Sensex would be in the range of 12,000 to 15,000. Some gave a gloomy picture and probably one of them said that it would in the range of 18,000.

Now, that was a very brave thing to do for our senior officers. They had been put in a spot by their boss and they had to respond. With no knowledge of how things would play out over the next 12 months, they had to give an instant response. In the end, their responses were nothing better than a guess. And no better than any ten year old’s guess.

None of the respondents had the courage to say that they were not equipped to look into the future. Or that they simply did not know. Everybody responded with so much confidence that you would have believed that they knew. Looking back, some of them were right about the index level. After all, the index is around the same level as last year. But boy, what a ride this has been. I am sure none of the bright officers in the room that day had any inkling of what the next one year had in store for us.

But for a moment, please step back and look at what happened that day. CEOs, Directors, powers that be are asked questions about the future ten times a day. In fact their job is to shape the future to mimic their imagination. They would not be eligible to be CEOs if they were unable to tell us what the future looks like. And we lay people lap up whatever they say as the gospel of truth.

So, next time you see some big shot predicting the GDP growth rate, inflation, crude price or the sensex, take it with a pinch of salt. And don’t forget to get a validation from your ten year old.