Oftentimes when people hear 'prediction' or even 'forecast',
they're thinking of a crystal ball where you're asked a question
and you can give a definitive answer.
When we are thinking about forecasts, all we're saying is
we're thinking probabilistically about an uncertain future.
So rather than shrugging our shoulders and going with a hunch,
we're finding uncertainty that we can quantify
and we're finding that we can quantify more than we thought and
we're finding that we can quantify it with more precision than we knew.
There's a process that anyone can apply
to improve their forecasting accuracy to make better decisions.
I had happened to read Professor Tetlock's earlier book
'Expert Political Judgement' and really liked it.
And so one day in my old day job
on Wall Street, I was just curious what he was up to.
And he was announcing a new research project
and was asking for people who might like to forecast on geopolitical
and macroeconomic events. I went 'that sounds fun!'
The US intelligence agencies were
genuinely looking for ways to improve their skills
and one of the ways they wanted to do so
was to start with the wisdom of the crowd.
And that first year, about a decade ago now
a group of forecasters consistently did better than the rest.
That prompted a new research question:
'what would happen if they took those people who were really good
and put them on smaller elite teams?'
Would they get better or would they revert to the mean?
They gave us hours and hours of psychometric tests.
So there's a small subset of things that really does matter:
being good at pattern recognition, being actively open-minded in thinking.
And also being cognitively reflective.
Where when you're presented with a challenge or a problem
there may be a solution that pops to mind and do you just go with that answer
or do you say, well, wait a second, let me slow down and see
if there's something else going on that will give me a more accurate answer.
And those three basic things are ways to prescreen
potentially talented forecasters.
I was 'Exhibit A' because I was horrible in the first year
but I got better in the second year.
And came up through the ranks to be what they called a 'superforecaster'.
Who's going to win the next election?
or who's going to win the World Cup or anything.
Most people will focus on the question itself
and really get caught up in that, an inside view.
But the thing is, the inside view is a place to end, not to start.
In the case of, say, presidential election,
who's going to win? Most people will start thinking:
'Oh well, Biden this and Trump that.'
No, just pause and say first:
'How often do incumbent presidents get reelected
when they run for a second term?'
It's that simple.
Ideally it's a number.
When you say: 'Oh, it's likely that Putin
is going to withdraw from Ukraine', what does that mean?
What does 'likely' mean? Give us a number.
We use probabilities all the time, thinking about the weather.
We see it in sport all the time. So it's already there.
And this is pretty much the same approach just to other areas
where we can usefully express our views with numbers.
And that new information could be a news story,
it could be something somebody tells you.
In your work life, you might make it even quite formal
where you will have contributions from the team members anonymous.
By having it anonymous, we don't get anchored on a high-status individual.
What often happens is everyone will try
and anticipate what the boss wants to hear.
So instead of getting diverse perspectives, you hear clones.
If you're looking to have a dynamic successful team
that is going to really deliver the best possible results,
you want people from different backgrounds, different perspectives,
different life experiences. There's a mosaic.
We all have tiles. We're trying to fill in as many tiles as possible.
And if we all have the same tiles, we're not going to
get very far filling out the mosaic.
A good forecaster, they're always testing their beliefs.
So rather than protecting them inside a lock box,
they're always challenging them. What am I missing?
A bad forecaster will have a belief about the world.
A model of the world and defend it
against all challenges because they're convinced this is right.
So that's the idea of a hedgehog who just really grabs on to something
and does not let go, versus a fox where he'll be agile
and eagerly seeking out new information.
If you're looking for people to put on your team, you can ask them:
'Is it a good idea to change your mind when new information comes in?'
Hedgehogs will say no. Foxes will say yes.
Changing your mind is not a big deal.
And in fact, and this was kind of the revelation
for me, is you should expect to change your mind.
By definition, you don't know everything.
And that's where the humility comes in too.
It's recognising that our understanding of the world is necessarily limited.
What we can do is pool all our limited information and
be seeking out the key information from others as we evolve our thinking
as we update our forecasts.
And the tools that we have at our disposal to make better use
of all that information, that's improving all the time.
So while the world is getting more uncertain
in many fundamental ways, our ability to process that uncertainty
is also getting better all the time.
The way I think about it is again, let's go to history.
What's our 'base rate'? And our base rate is machines
over time do more and more of the heavy lifting, right?
Leaving us, humans, more time to do what we do well, which is judgment, right?
Predicting what other humans are going to do
is something that the machines are still not so good at.
That's the judgement where we still excel.
It sounds esoteric, but it's actually quite simple.
It's a world of decisions and thinking more clearly
is actually easier than it appears.
And is easier than not doing it in the first place.