Marketing without measurement in a world of malignant complexity
The economists are confused!
By Mark Schaefer
While reporting on the robust economy in America, The New York Times noted that the current combination of low unemployment and low inflation seems impossible.
Economists believed you could never have a low unemployment rate (3.7 percent) without also seeing the rate of job creation slowing (where are new workers going to come from?) and having an increase in inflation.
And yet the economic “impossibility” has happened. The U.S. jobless rate has receded to its lowest level in 50 years, job creation is steady, and inflation is about 1.5 percent, the same as last year.
Stick with me here …
Here’s where it gets interesting (really). Two years ago, the Federal Reserve published a report predicting that the unemployment rate in this year would be around 5 percent, and that this would coincide with a 2 percent inflation rate.
So in this short period of time, the greatest economists on the planet have been embarrassed. All those algorithms. All those advanced degrees. The economists can’t explain what is happening in the U.S. economy right now.
I am not making a political statement. I’m making this point to demonstrate that the world has become so complex that even in a math-driven field like economics, nobody really knows what the hell is going on in the world.
A few years ago, I predicted that the biggest emerging business trend would be malignant complexity, meaning that the insane complications and unintended consequences of rapid technological change makes it difficult to understand our world, let alone predict what’s next.
Economics is a mature field, largely based on irrefutable math. And yet, economists cannot adequately explain what’s going on in America right now. The rulebook for forecasting and planning is being re-written. Or, perhaps there is no rulebook at all!
I think we have also hit that point of malignant complexity in marketing where many predictions are wild guesses and measurement becomes intangible.
I recently wrote, with humility, that I do not see a clear path forward for the future of social media. I have a solid track record of discerning how trends come together but there are so many mega-trends in motion right now that I don’t understand the interconnections and how it will play out Nobody does.
What happens when we don’t understand
When I started in business, the company I worked for had us create five-year plans. That seems silly today, but in the 1980s we could forecast a reasonable long-term plan because the rate of technological change was relatively slow.
An implication of malignant complexity is that the time horizon for accurate forecasts is getting shorter and shorter. Can we even see what will happen in one year? Six months? Will the forecast horizon soon become a month … or one week?
This is unfamiliar territory for businesses built on plans.
What would happen if we created an annual forecast for our boss that was blank because that is the most honest prediction we could make? That would not be popular. But I think we’re kidding ourselves if we think our mortal minds can stay ahead of malignant complexity!
Marketing without measures?
This reinforces one of the themes I wrote about in my book Marketing Rebellion. We are working in a marketing world increasingly difficult to predict or measure. Even today, our marketing dashboards are focused on likes and tweets that probably don’t matter any more.
Without question, the most successful and relevant marketers in the future will have to relax expectations on predictable outcomes and reliable measures.
I never thought I would write a statement like that because it seems so flaky … but it’s the truth. I’m not making excuses, I’m simply acknowledging that we can either keep up with the pace of this world or we can stick to our marketing dashboards. We probably can’t do both.
In an age of malignant complexity and unrelenting change, some aspects of marketing measurement will become a leap of faith. In some cases, the speed of business will outstrip our ability to forecast and measure. Perhaps non-measured, speed-driven marketing management will become the norm, a best practice.
That is going to take some courage, isn’t it?
How are you adjusting to this weird new mindset?