July 25, 2012
Forward looking statements
People say things to other people all the time that are misinterpreted or misunderstood; this is a normal part of life as a social animal. But this is especially true of things people say about the future, what the securities business calls “forward looking statements”. Statements about the future are marvelous sources of chaos and confusion because the future is intrinsically uncertain. The inevitable divergence between what someone said at one time and what actually happened at a later time invites all kinds of reinterpretation and second guessing and finger pointing, well beyond the usual muddle that is an ordinary part of human social interaction.
Because people in an organization are trying to coordinate purposeful and often complex tasks over time, forward looking statements make up a large fraction of intra-organizational communications, a larger fraction than I think is typical in purely social or familial interactions. Over the years I’ve learned that I often have to train people I’m working with on the distinction between three related but very different kinds of forward looking statements: plans, predictions, and promises. In my experience, somebody treating one of these as one of the others can be a significant generator of interpersonal discord and organizational dysfunction.
In particular we make a lot these kinds of statements to people to whom we are in some way accountable, such as managers and executives up the chain of command, but also, notably, investors. We also make these kinds of statements to peers and subordinates, but somehow I’ve found that the most chaotic and damaging effects of misunderstandings about what something really meant tend to happen when communicating upward in a power relationship. Consequently, reinforcing a clear understanding of these distinctions has become part of my standard routine for breaking in new bosses.
The distinctions are subtle, but important:
- Plans are about intention
- Predictions are about expectation
- Promises are about commitment
A plan is a prospective guide to action. A plan can be wrong (moreover, it can be known to be wrong) and yet be still useful. A plan is often an approximation or even wild a guess. However, if you are in a high state of ignorance and yet trying to take purposeful action, you have to start somewhere. As George Patton famously said, “A good plan, violently executed now, is better than a perfect plan next week.” Plans can readily change, because over time you learn things, particularly as a side effect of trying to execute the plan itself. In fact, in my line of work, if your plans aren’t changing relatively frequently you’re probably doing something wrong. Plans typically concern matters that are within your own sphere of control: “first I will do this, then I will do that”.
A prediction is declaration about what you think will happen. A prediction may very well encompass elements that are beyond your control. A prediction will often incorporate, if only implicitly, some model or theory or idea you have about how some part of the world works. When making a prediction, you are offering somebody else the benefit of your knowledge and analysis, so it can be beneficial to articulate your reasons for believing as you do. Like plans, predictions can change, but the reasons for change are different: a prediction can change if external facts change, or if you discover some shortcoming in your analysis. Thus it may also be important to be explicit and articulate when you change a prediction: explain why. Unlike a plan, a prediction that is just a wild guess is largely worthless, though a prediction that is the product of an inarticulable intuition may still be useful (but if so, in some sense it’s not really a wild guess — though it’s a valuable and rare skill to be able to reliably distinguish the times you are going with your gut from the times you are just stabbing in the dark).
A promise is a statement that you grant other people the right to treat as a fact that they can rely on, as they figure out their own actions and make plans, predictions, and promises of their own. A promise is a positive assertion that you will or will not do something specific. A promise is not something that generally changes; a promise is either kept or not kept. A change in circumstances may render a promise unkeepable or inappropriate, however. People put a lot of moral weight on promises, because accepting a promise requires trust. Because trust is involved, a broken promise can have emotional and organizational consequences that go beyond the direct practical effects of whatever contrary thing was or was not done. I could go on at length about the moral and emotional dimensions, but it would be a digression right now. The short version is: promises carry a lot of baggage.
On their face, these three kinds of things are all simply declarations about the future, and there’s nothing innate that necessarily marks which of these a given statement is: “I will mow the lawn tomorrow” could legitimately be taken as any one of the three. The differences have to do not with the form of the statement but with the intent. The reason the distinctions remain important, however, is because serious trouble can result when somebody says something intended as one of these categories, and somebody else interprets it as one of the others. The reasons for this sort of misinterpretation are varied and probably infinite: the person who said it was unclear what they meant, the person who heard it wasn’t paying attention, or misunderstood, or had different background assumptions, or was simply clueless. Sometimes the misinterpretation is deliberate and willful; this is especially destructive.
These categories are not pure. That is, a single statement is not necessarily 100% one of these things and 0% either of the others. A statement can be a mixture. However, having the parties at both ends of the communication be clear on what was intended is still essential.
There are many different ways trouble can result from interpreting a statement of one of these types as one of the others.
Treating a plan as if it were a prediction invites confusion and mayhem if the plan changes. The normal evolution of a project can be seen as evidence of problems where none actually exist: “You said you were going to do A and instead you did B. Why did you say you were going to do A? Do you really know what you are doing? Please explain.” A lot of time and energy can be dissipated accounting for changes to people for whom the changes weren’t actually important.
During the last year of the Habitat project, we reached the point were the product was fundamentally complete but it had a lot of bugs. The bug list became our main planning tool: each bug was assigned a priority and a rough time estimate, and the bug list was the thing that each developer looked to to decide what to do next. I call it a bug list, but not everything on it was, strictly speaking, a bug. Some things were tasks that we’d like to get done that needed to be balanced against the debugging work, and other things were just stuff that could be made better if we spent the time or resources. Since the world is constantly changing and we are constantly learning, a fairly common pattern was for a task to be identified and put on the list, and then gradually drift into some form of irrelevance as the shape of the system evolved or operational experience gave us feedback about what was really important. This kind of drift and accompanying deprioritization is a process that every developer should be familiar with.
Perversely, we found ourselves keeping multiple uncoordinated bug lists. As the project matured we acquired a product manager, who was a well intentioned but ultimately useless detail freak. In an attempt to track the status of the project, in hopes of answering management’s eternal question, “when is it going to be done?”, she’d convene status meetings wherein she’d try to use the bug list as checklist. Every couple of days we’d spend several hours going through these items, and all the dross that we’d been ignoring because it was irrelevant or pointless became a topic for discussion, and “never mind that” was never an acceptable way to dispose of these items. Her reasoning was that if something had been important enough to get put on the list, it shouldn’t be taken off without due consideration. Since she wasn’t the person doing the work and so didn’t understand a lot of the particulars, everything had to be argued and debated and explained, wasting many hours of time. Plus, she’d be adding up all the time estimates for these random and vague things and freaking out because the total was wildly unreasonable — never mind that the estimates were engineers’ guesses to begin with and many of these tasks would never be done anyway. And on top of all that, a lot of these status meetings were teleconferences with our partners at QuantumLink, where each of these irrelevant items got unfolded into even more useless discussion and became the basis for lots of interorganizational dispute. So we found ourselves developing the defensive habit of keeping private todo lists of tasks we’d identified that we didn’t want to have to spend hours debating, and everybody made up their own plan.
The consequence of all of this was that a whole lot of planning activity was taking place off the books, so when the work got done it meant that lots of resources were spent on things that never showed up in the official project plan and could not be accounted for. It also meant that each of us had much fuzzier than necessary picture of what the others were doing, and management had a worse picture than that.
Nearly every experienced developer I know has his or her own variation of this story. Many of us have several.
A plan that is treated as a promise is even worse than one treated as a prediction. A normal change of plan can become an invitation to recrimination or outright hostility or even punishment. Plans treated as promises are at the root of many of the most awful cases of organization dysfunction I’ve ever experienced.
One of the projects I worked on at Yahoo! (to protect the guilty I will refrain from naming names) actually kept two schedules: the official schedule, for showing to upper management (the promise), and the real schedule, for day to day use by the people doing the work (the plan). As the project evolved, these two diverged ever more sharply, until the picture that upper management was getting became a complete and utter fantasy. At one level, the problem was that the person running the project was a craven coward, afraid of telling the truth to his superiors because he knew they wouldn’t like it (the real schedule said that things were going to take a lot longer than the Potemkin schedule said — funny how it never seems to go the other way). But at another level, the deeper problem was that the higher echelon people persisted in treating any forward looking statement by their subordinates as a promise, which made planning impossible.
Treating a prediction as a promise holds someone responsible for the consequences of their analysis rather than for the quality of the analysis itself. Even if someone has some control over whether a prediction comes true or not, the mere act of making a prediction should not carry with it the obligation to intervene to ensure the outcome. Many predictions are conditional, statements of the form “if A happens then B will happen”; this does not mean that someone who says this is now committed to making A happen. Indeed, as with plans, changes in circumstances can render a prediction wrong or irrelevant. It may be more constructive to adapt to the changed reality than to try to bend reality just to preserve the prediction.
Treating a prediction as a promise often leads to people being held responsible for things they have no control over. Putting people in this sort of bind is a classic cause of various forms of mental illness. Aside from being basically useless and stupid, this is great a way to make people hate you, and you’d deserve it. Nevertheless, how many of us have experienced a boss refusing to hear that something can’t be done, even when it really couldn’t?
Treating a prediction as a promise abdicates responsibility. If you are obligated to produce some outcome and fail because some prediction you relied on turns out to have been wrong, it is still your fault. It was you who chose to rely on the prediction. Government and big business both do this all the time, trying to duck accountability for mismanagement or malfeasance by pointing at external estimates or projections gone wrong (indeed, at times it seems like the Congressional Budget Office was established principally to enable politicians to use this particular dodge).
The failure modes just discussed are the worst, because each, in one form or another, imputes causality that isn’t really there. The other possible category confusions can still be disruptive, however, by jumbling the mental models people use to make sense of the world.
If you treat someone’s promise or prediction as a plan, it means you are pretending they have a plan when they might not. You are confusing ends with means. Sometimes, of course, you don’t care what their plan is, and sometimes it’s none of your business anyway, but in such cases you should know that you are banking on the quality of their analysis or of their commitment, and not on a fantasy model of what they are doing.
If you treat someone’s promise as a prediction, you risk using the wrong grounds to assess the validity of their statement. You consider the trustworthiness of a prediction by looking at the predictor’s knowledge and analytic ability, whereas a promise is evaluated by looking at the promisor’s incentives and their ability to execute the relevant tasks. These two pathways to assessment are wildly different, and so if you use one when you should use the other you are in danger of getting the wrong answer.
There are already plenty enough ways for organizational relationships to go off the rails without adding the various nasty species of communications failures I’ve described here. However, I don’t think it’s sufficient to just exhort everyone to try to be clearer. Managers, in particular, need to be aware of these failure modes and press for clarity when somebody says something forward looking and the category it belongs in is uncertain. Because humans tend to like certitude, many managers have a bias towards interpreting the things people say as constraining the future more than they actually do. If they do this a lot, it teaches their subordinates to be stingy with their knowledge, timid in their public outlook, and even sometimes to lie defensively. All of these things are corrosive to success.