Groundhog day predicting the weather, technology and economic outlook

Today is Groundhog Day and in Punxsutawney, Pennsylvania USA the groundhog saw its shadow meaning six more weeks of winter. At the same time CIOs responding to the 2010 Gartner CIO Survey indicate that 2010 will be another tough year for their enterprise and therefore for IT.

When asked how they saw the coming year in terms of revenue growth:

* 41% of CIOs globally saw their shadow and forecasted continued contraction in revenue and economic conditions.
* 21% saw some shading and expected conditions to stabilize around current levels.
* 32% did not see their shadow predicting growth over 2009 levels, but only
* 6% had the confidence to predict actual growth in 2010 will exceed 2008 levels.

These are global averages and economic recovery will come at different rates, as there are significant differences in specific industries and countries. Meaning that if you see one future, you have seen one future.

So what gives? Plenty. While all Punxsutawney Phil (yes the ground hog has a name) has to see or not see is his shadow, business executives have to look ahead in order to see the future across a set of complex and changing conditions.

Sure anyone can predict the weather by pulling a rodent out of a cage and holding it up to his or her ear – if you’ve seen the movie Groundhog Day you know what I mean. If the rodent is wrong you do not fire the groundhog, literally or figuratively.

But if the business is wrong it can doom itself to repeating last year’s strategy over and over again until they learn better. That was the moral of the move and it is a real risk for enterprises. Seeing conditions turn from recession to recovery is tricky and critical to enterprise success.

Executives need more than a superstition to lead their organization. They need information that forms the basis of leading indicators of performance, not lagging financial data that says what happened last week, quarter or year. Getting that information may be tough, but CIOs need to start to think like CFOs in terms of information, particularly as it relates to looking ahead. In this regard CIOs should contemplate the following idea:

“CIOs use operational data as leading indictors in the same way that CFOs use financial data as a basis for past performance.”

Your enterprise needs to know both were it stands/stood (financials) and where it is going (operational) in order to determine the weather for the next six weeks and six months.

Don’t wait for the CEO to reach into your organization, wearing a top hat, and yank you out to see what is going on. ( link )

Form a small ad hoc team to study the issue staffed with 2 or 3 people from IT, a few from sales, operations and finance to test which operational indictors that predict future growth or continued contraction. The leading indicators are there in the production plan, sales plan, customer purchasing, etc. The problem is the data is disaggregated across multiple systems and often murky, the same way that it is dark and murky in the groundhog’s den.

Call it the Ground Hog Project, because you are looking for a sign of the future. It does not have to be very specific, just directionally correct. Because you are looking for more than just a signal you are looking for leading indicators of growth or continued winter. Between all of you and the operational information you should be able to out progosticate the weather wizzard of central Pennsylvania!

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