FLEXIBILITY IN DESIGN - Title Page - MIT

de Neufville + Scholtes D R A F T September 30, 2009CHAPTER 2RECOGNITION OF UNCERTAINTY“In the early 1980s the consultants McKinsey and Company were hired by ATT to forecast thegrowth in the mobile market until the end of the millennium. They projected a world market of900,000. Today [in 1999] 900,000 handsets are sold every 3 days.”A. Wooldridge (1999)This chapter indicates how we might best anticipate the future for long-term technologicalsystems. Modesty is the best policy. We need to recognize the limits to human foresight. Weneed to recognize that forecasts are “always wrong”. People cannot realistically expect to get anaccurate long-term forecast of what will happen. We might exceptionally be able in ten or twentyyears to look back and see that our long-term forecast was accurate, but few are ever so lucky.We need to recognize that our future is inevitably uncertain. Therefore, we need to look at theranges of possible futures, and to design our projects to deal effectively with these scenarios.The success of our designs lies in how well they provide good service to customers andthe public over time. To the extent we create systems that efficiently continue to fulfill actualneeds, in the right place and time, we will be successful. If the systems do not provide neededservices conveniently and in good time, our creations will have little value. Successful design thusdepends upon anticipating what is needed, where it is needed and when it is needed. Successdepends on the way we understand what the future might bring.Unfortunately, it is almost impossible to predict exactly what the future will bring over thelong term, over the life of our systems. Experience demonstrates, again and again, that specificforecasts turn out to be wrong, to be far from what actually happens. Moreover, because so muchabout the future is unpredictable, we cannot hope ever to achieve good long-term forecastsreliably. We need to recognize the inevitable uncertainty of any prediction. We need to give upon the idea of trying to develop accurate forecasts of long-term futures – this is an impossibletask.We need to adopt a new forecasting paradigm. We need to focus on understanding therange of circumstances that may occur. We need to consider the distribution of possible futures isoften asymmetric, having limits in one side and being almost none on the other. For example, theprice for a commodity is not going to drop below zero, but may become very high. Similarly, themaximum demand a plant might serve might be limited by its capacity, yet the minimum couldvanish. We need to do this to appreciate the context in which our systems will function, to beaware of the risks that may threaten them, and the opportunities that might occur. This focus onthe likely range of possibilities is fundamentally different from the standard approach toforecasting, which looks for the right number, for a single point forecast.Part 1: Chapters 1 to 3 Page 21 of 69