Why CEOs are sounding like Bejan Daruwalla

I’m getting more than a little tired of ‘predictions’ on advertising and media for the year ahead of us.

What is apparent is that no one can be certain, yet ‘predictions’ keep pouring in.

It’s bad enough reading completely conflicting opinions by ‘experts’ on the same day on what 2009 has in store. What really irks is the gall of some to make predictions for the next five years when we have no clue on what the next quarter holds for us.

Yet the ‘predictions’ keep pouring in.

And everyone reads all the ‘predictions’ almost as they would read Marjorie Orr’s and Bejan Daruwalla’s horoscopes in the hope that at least one of them will speak of good tidings. Keep reading horoscope columns till you find one that makes you happy.

And then you stumble upon another that casts a pall of gloom.

Perhaps all of us in media should stop asking experts for their prognosis to be defined so minutely. Maybe we should give them a little more room. “In your opinion, will the next quarter be as good as this one, better than this one or worse than this one?” – and stop at that. No further probing along the lines of “how much better? One per cent? Two per cent? Five?”

If one reads all the numbers that are bandied about by experts, the next year doesn’t look good at all. However, if you ask, as I have been repeatedly doing during the last couple of months, “how’s the next quarter looking?”, the most common answer is, “better than this one.”

My colleague and I met TBWA’s Keith Smith last week. Smith spoke to us about how he (and TBWA) are dealing with the slowdown.

He didn’t once mention numbers (and we didn’t ask for them) and stated, categorically, that all strategies and forecasts are made only for the following quarter, whether for revenues, managing people or cutting costs.

The immediate gain of this quarterly outlook is that managers are immediately more in control than they would be with longer term forecasts.

There is a lot of information available, trends that one sees today are far easier to extrapolate over the next three months – because there is a lot more information.

With few clients able to take long-term positions, any reasonable projection about a year or longer away is impossible – because we deal with an area where too much is unknown, bringing with it the fear of the unknown.

Forget the completely unpredictable factors that could cause all projections to go topsy-turvy, such as a terrorist strike. If the general elections sees India with a stable government, things would immediately look better.

On the other hand, a badly fractured mandate would bring about a sense of gloom.

Similarly, a well-distributed, generous monsoon would result in a reasonable increase in consumer confidence and spending; a failed monsoon would be disastrous.

If one had to make any number-based long-term projection, each time the environment throws up a result different from the one you had factored in to make your projection, one will have to revise it.

Another danger with projections is the undeniable fact that most CEOs have two sets of numbers ready: one for public consumption and one for internal strategy.

The one that we read is almost never the one that the CEO believes is the accurate figure.

The final danger is the fact that numbers are almost never allowed to remain mere numbers; they are analysed and interpreted by the reader, the journalist, the analyst. So the 10% to you is different from the 10% to me.

Which is why I’m going to keep things simple.

The next quarter will be better than this one.

Interpret this any way you choose.