My mind immediately cut to an imaginary adaptation of Seth Meyers and Amy Poehler's "REALLY!?! with Seth and Amy" skit from NBC's Saturday Night Live:
This week Joe Dokes, the CFO of Acme Corporation, stated that "we can safely assume that the recent financial crisis is the worst possible crisis imaginable" ... well, I feel much safer now, don't you? REALLY!?!
[AMY]: Come on Joe, is it really that hard to imagine that something worse couldn't happen? REALLY!?! Is there an invisible, impenetrable safety net that you secretly know of that would keep us from falling any further? Wow, thanks for telling us about it! Now we can live our lives without fear of a pandemic, a dirty bomb, or devaluation of the dollar wiping out (literally or figuratively) large swaths of our families, friends and colleagues. REALLY!?! Wow, golly thanks, Joe!
[SETH]: Joe, how do you come to know this is as bad as it could get? Did you recently stumble upon a pair of magic clairvoyant glasses that enable you to answer precise questions about the future? REALLY!?! Then, do we have some questions for you:
[AMY]: Is China ever really going to stop holding U.S. Treasuries, or are they just fooling with us?
[SETH]: Is Al Gore right about us killing the planet?
[AMY]: Will U.S. citizens just continue to get dumber, lazier and more overweight--yet still be able to command the world's respect and investments?
[SETH]: Are the Cubs ever going to win the World Series?
[SETH]: Answering these questions would do us just as much, if not more, good than knowing that it can get no worse that the latest financial crisis! REALLY!
[AMY]: What's that, Joe? You're not nearly as confident answering these questions? Why not? Is it because those magic glasses of yours are really just some glasses that you smuggled out of the 3D showing of Avatar at your local IMAX theater this weekend? REALLY!?!
[SETH]: I find it peculiar that you are SO CONFIDENT asserting assumptions; however, when it comes down to forecasting and predicting outcomes, you are much vaguer. REALLY!?!
[AMY]: Yea, for instance, you don't even blink at assuming that the U.S. economy will begin to recover in Q3 2010; not a trivial question. However, you're as slippery as a greased electric eel when asked to provide us with a forecast of what consumer demand for Acme products will be in the same time horizon. Not trivial either, however, certainly less complex than predicting the dynamics of the entire U.S. economy ... RIGHT!?!
[SETH]: Joe, come clean. Aren't assumptions and forecasts really just the same thing? Amy, what's a forecast?
A guess about an uncertain variable.
[SETH]: And what's an assumption?
A guess about an uncertain variable! Not sure what makes it so much different. Must be the halo that comes along with the label!
[AMY]: This is great! So you're saying, if I don't want someone to muck with one of my guesses, I should just call it an assumption? Wow! And people buy it? REALLY!?!
[SETH]: More people than you think, Amy.
If you have not seen "REALLY!?! with Seth and Amy", just go to hulu.com and search "Saturday Night Live really" and you will be treated to some fine comedy. Consider teaming with a colleague at your next meeting that's focused on studying a big decision or business case and together play the roles of Seth and Amy.
Anytime you hear the term "assumption," just start peppering them with "REALLY!?!" Maybe, just maybe, people will slowly start to begin to see and acknowledge the uncertain world in which we live, work and compete... instead of just assuming the uncertainty away ... REALLY!?!
DAVID M. WONG is director of enterprise risk management at CME Group, the world's largest and most diverse derivatives exchange.
February 8, 2010
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