A Jolly Hockey Stick

“Economists are pessimists: they’ve predicted eight of the last three depressions”
  Barry Asmus     

This explosive document was found in a bin in Westminster. Annotated by an unknown economist at the Office of Budget Responsibility, the scrawled notes blow the lid off the financial forecasts for UK plc.

Actually, that’s not true.  Yes, it summarises the GDP forecasts from the UK’s Office for Budget Responsibility.  However, I nicked the original from the Daily Telegraph website, and added my own jottings about what might have been going through the mind of the analysts who put it together.

Are my additions cynical?  Absolutely! I’ve been through similar exercises myself and I know the pressures.

The numbers are a classic “hockey-stick”. They suggest that the UK will return to a ‘normal’ level of growth in a few years’ time. But can we believe it? The short-term forecasts have been dramatically wrong. Why on earth should we place any trust in the longer-term forecast?

Indeed, what if this – all the change we’ve been through over the last four years – is the new normal?  Low growth – or no growth? Massive unpredictability? Huge capital swings? And the associated sense that there is nothing at the centre – no central economic and political expertise, authority or even influence over events – with all that that implies for our confidence in democracy?

This graph proves that forecasting is a mug’s game. And protesting that “circumstances have changed” just emphasises the point.

But planning is different. It’s still essential. It just has to happen more quickly and more frequently. Maybe the sort of dilemmas we face are more tactical and short-term, but when decisions are difficult, we’re more likely to reach better answers if we keep the big picture in mind, like our direction or our purpose or the many timeless business truths.

The overall vector of GDP looks dreadful right now.  Remember, though, that it’s the average of hundreds and thousands of individual vectors.  Who wants to be average?

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So, in the next few blog posts, I’m going to explore some of the things we can do to put more distance between us and the average. If we have any influence over our own future, there’s no reason to be satisfied with average performance. But we need to be clear about how we’re going to beat the average.

Here’s the first recommendation:

Get crystal clear about why you and/or your business are valuable.

We all know about elevator pitches, but one of the anecdotes about the late great Steve Jobs takes the concept further. It’s said that if you found yourself in a lift with him, you’d better have a compelling reason why you were working for Apple – or you wouldn’t be by the time you arrived at your floor.  (And there are only four floors at their HQ, by the way.)

If your pitch doesn’t work, you’re fired.  Concentrates the mind, doesn’t it?

An elevator pitch is a statement about why your services or products are valuable. It’s really hard to get right. You face two classic marketing challenges: ignoring your own perspective in favour of others’, and throwing away all your ideas except the single most crucial one.

The ideal starting point is “We help these people with this problem to reach this result.”  Once you’re clear about that, then you can refine it to something a bit more elegant, like “melt away the misery of indigestion, fast.”

My own is “I help busy teams hammer out great business strategies”. This only took ten years to formulate (thanks Andy and thanks Jane). I can justify each word, and more importantly I can back it up with plenty of examples. Would I survive the journey with Steve? Hope so.

What would you say? You’ve lost the chance to say it to Steve, but lots of people – investors, bosses, employees, customers – will be demanding answers in 2012. Getting your response crystal clear will give you a big advantage – and real confidence.