The anatomy of foresight traps

Most companies generate little drama as they manage the daily tension of their uncertain futures. And they rather like it that way, since forecasting errors can generate bad publicity. After the fact, it is usually easy to understand why a calculated gamble failed due to a bit of bad luck. It is more difficult to identify a mistake for which management is responsible. In this column, I’ll focus on one type of maddening forecasting error, a strategy determined by a single conceptual framework. Call these foresight traps. No companies ever escape foresight traps. However, some do a better job of avoiding a big and costly one. It is worthwhile to understand why. It illuminates one of the most fundamental managerial challenges in high-tech markets.