Preparing for Changes

Hal Gieseking

Based on interviews with Dr. Leon Martell and John Naisbitt

You can't plan the future based only on the past

Each type of change requires a different response

"Find a parade and get in front of it" John Naisbitt

Trends Naisbitt predicted that have come true

Reinventing yourself to cope with change

When you learn more about yourself and think about your past experiences, you probably will find how much you’ve already learned from living without fully realizing it.

But what about those exterior massive changes that affect all of us, over which we have no control – the economy, war, accidents, and now, the growing threat of terrorism?

I turned to a real expert in helping people understand and cope with change. Dr. Leon Martell.

The cover of his book, Mastering Change, describes him as a political scientist and futurist. He was formerly Executive Vice President of the Hudson Institute. I talked with him about how individuals can cope with changes in their lives.

“The important thing is very simple,” Dr. Martell replied. “It’s to recognize that changes are occurring. It sounds so obvious, yet, again and again, when we make our plans for the future, we do so on the basis of what we’ve seen happen in the past. It’s perfectly natural because it’s familiar. You’ll find that many future studies begin ‘if present trends continue.’ Business as usual is the baseline from which most companies begin their forecasts.

“Individuals have to get over that tendency by looking at change as natural and continuity as unnatural. Present trends don’t always continue. Business as usual is unusual.

“Changes do have patterns – in direction, magnitude, pace and duration. You can’t always see every dimension in detail, but you can see some of them. All changes can be divided into two categories: structural changes and cyclical changes. Structural changes are ongoing, permanent and irreversible. You can’t go back to where you were before the advance of knowledge in any field. In medicine, for example, you don’t go back to the past; you go to a higher level.

“On the other hand many trends are often cyclical changes that tend to go up and down. Businesses and recoveries, crime and divorce rates, supply and demand, etc.

“Then you must understand that each type of change requires a different response. You look at patterns. What is the direction of this change? What is its magnitude? Look at those changes most likely to affect your life and focus on those. What it comes down to are these simple steps: Recognize that change is occurring Use your judgment to rank how likely they are to occur, identify those changes that affect your particular activities, determine the type and their pattern, and rank them by the likelihood of their occurrence. Then you have a handle on it. This evaluation has to be going on continuously because change is coming faster.”

I asked him to give me an example of what happens when companies assume some trends are permanent.

He said, “I visited Eastman Kodak several years ago and they showed me (an early version of) the digital camera, a technically sophisticated new format for exposing film for still pictures. But the negatives produced by that camera proved to be too grainy when blown up for prints and sales were seriously disappointing. Forbes magazine said the camera was a “flop – a humiliating Edsel of a product.”

“Meanwhile Sony had introduced a new technology, a film-less camera that used electronic imaging. And the Kodak people said, ‘That technology is so inferior. The pictures are not nearly as good as the chemical ones.’”

“I said, ‘It could be that this technology isn’t very mature yet. Maybe Sony with electronic energy, an entirely new technology, is really the future of photography.”

Years later Kodak is still trying to catch up and recover its place in the photography world. Many other changes are buffeting all of us since the day of that interview.

For example, the increased security at airports and key industrial sites unfortunately seem to be a structural change mandated by the shotgun marriage of world terrorism and technology. Many changes in the labor market may be structural, with hundreds of thousands of workers being displaced by new technologies and foreign competition. These permanent changes may drastically affect how we plan our futures and advise our children about the education they will need for jobs in the future. The varying prices we see at gas stations is a cyclical change; we’ve seen them before and we will see them again, depending on world oil supplies and how much we increase or decrease our demands for oil.

* * * *

“Leadership involves finding a parade and getting in front of it,” said John Naisbitt.

But how do you find that parade?

For many years John Naisbitt, author of the megaseller Megatrends, has been mapping the trends that can affect us all. His method: content analysis. It’s a concept that dates back to its secret use by American intelligence during World War II.

Intelligence analysts wanted to know more about what was happening in Germany. Were there shortages of food? Did civilian morale seem to be slipping? Were aging men being drafted into the army? The analysts turned to an unexpected source: German media (newspapers and radio broadcasts). During wartime, it could be expected that any country would censor any media information that would give aid or comfort to its enemies.

For example, German newspapers would not run articles about a shortage of food in particular cities, even if there was near-starvation. American analysts instead counted the number of times the word “food” was used in the media. The theory: If there were shortages, German propaganda would carry more articles claiming no shortages of food or that fresh supplies of food were on the way. A sudden increase in the use of the “food” word would probably mean that German propaganda was working overtime on a problem, a need to calm a hungry population. Very real food shortages could be developing.

In America in the 1960’s some social scientists began to track how many times the word “computer” was used in the media (in a positive or negative way). Year after year the use of the “computer” word soared into the stratosphere, clearly indicating that a major trend toward computers and software was underway – and some clear signposts for people to consider training for or investing in that industry.

In Megatrends, Naisbitt (in 1982) predicted trends showing the steady decline of smokestack industries in America.

“Education has to play a key role in retraining workers who are losing their jobs in declining industries,” he said. “Many people are starting to move around the country, from locations where there are few employment opportunities to those places where jobs are still plentiful.”

Even more than twenty years ago content analysis of the media was showing there was a growing political and economic war between protectionism (“buy American products, don’t ship jobs overseas”) and the global economy (“we must reduce barriers to world trade”).

Other trends Naisbitt identified:

“We see small companies continuing to create many more jobs than large corporations.”

“There is a growing role of women in business as they move into managerial spots and start their own companies.”

“Many very young people are now starting their own corporations.”

I asked him about any trends in education.

“There is a definite movement toward lifelong education, increasing numbers of older people in college classes and in adult education programs around the country.”

After reviewing my notes of my conversation with John Naisbitt, I realized that content analysis could be a useful tool for everyone trying to understand what things that are happening now and determining which changes are probably structural and which are cyclical.

The easiest way to do simple content analysis is with a search engine such as Google. Example. Type in a key phrase about a specific industry “Steel manufacturing.” Google lists 3,740,000 articles on the subject. Now type in: “Health industry.” You would see 9,360,000 articles.

Which industry would seem to offer the most job opportunities for you and your family? Which would provide the most promising investment opportunities?

Reinventing yourself to cope with change

Think about:

What changes have affected you and your family this past year – rising prices, unemployment or threat of being laid off because of growing foreign competition, increasing number of house repairs, fierce arguments with spouses or close friends, or?

Take action:

Write down what you consider have been the major changes affecting you or your family. Are they structural changes which you can’t change? If so, write down any ways you can adapt to them. Are they cyclical changes? How can you adapt to them? If you over-react to these cyclical changes that come and go, you could make serious personal and financial mistakes. Example: If you invest in bonds when interest rates are rising, you could begin to lose principal (that may not be fully recoverable until the bond comes due). If you over-react to an argument with your spouse or your friend, you may prolong the disagreement. Look before you leap.

Actively thinking about the changes you have faced and those to come could make you better prepared to cope with today.

Words to consider:

“There are two ways of meeting difficulties; you alter the difficulties, or you alter yourself to meet them.”

Phyllis Bottome

“Part of human nature resents change, loves equilibrium, while another part welcomes novelty, loves the excitement of dis-equilibrium. There is no formula for the resolution of this tug-of-war, but it is obvious that absolute surrender to either of them invites disaster.”

J. Bartlet Brebner