Predictability is everything or not?

I have been following amused, and sometimes amazed, the reactions and comments on last week’s traffic problems. A sudden snowfall during rush hours made Belgian traffic come to a stand-still. Record traffic jams was the result. Was it predictable? Was the information available? Why was the information not used properly? Who should be blamed for this? (why do we want to blame somebody by the way …?) In today’s life, “surprises” and unexpected events are a sign of weakness. Especially in the business reality, predictability is a necessity. Companies that come with “unexpected” results or last minute pre-announcements of their earnings, are labeled as “unprofessional”. Those companies and their managers are “punished” by the marketplace and the business press (think about what happened to Belgian companies like Option, Omega Pharma, Agfa, Barco …in a recent past).  Being able to predict, to forecast or foresee the future (but also to communicate on the recent past) is considered for granted. A company should see clearly and communicate transparently (at least for stock traded businesses) where it stands and where its results are heading to. Easy to say, but still quite some businesses lack the ability to create insight in the enterprise performance. So what is it that makes this so difficult? Clarity is not something which comes out of a system, at the push of a bottom. It is the result of a comprehensive view on how the business in running, which business processes have been executed and what operations are taking place today and in the future. The accounting/controlling part of an ERP system might get you a long way in this. It is a good basis and platform for enterprise operations. But without a solid planning, business intelligence and analytics system, the senior management of the organization will lack the necessary information and insight on the performance of the organization. Just think about the banking sector at the start of the financial crisis. Lack of insight and clarity makes predictability impossible. A good “stomach” feeling alone is not enough for a organization (certainly of a certain size) to know how things are going. For sure this explains why analytics and intelligence are still high on the list of priorities for 2010. And maybe the fact that independent research has shown that worldclass companies have above average analytical capabilities helps here. It’s for sure, we can still improve insight and transparency in daily life (business and other) and try to reduce “surprises”. But let’s not forget that more information and intelligence does not mean that we will never be confronted with un-predictability. To illustrate, I refer back to last week; record traffic jam on Belgian highways due to snowfall during rush hour. We might get much better in collecting information (eg. Think about weather forecasting today compared with 10 years ago), we might be better in communicating (think about the multitude of communication channels about the weather), and even get more and faster information… still what we do with it all, and how we act on the information will equally be important. Predictability can reduce surprises, but will not change the “news” or the information (we will still have sudden snow falls and likely difficult roads to drive on). Goldratt’s statement “necessary but not sufficient” gets here another application …