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The Median and the Edge « Ian Morrison

The Median and the Edge

We need to distinguish between the future that’s arrived and the future that may never come.

By Ian Morrison

We often compress the future. We look ahead, see a large, inevitable future, and presume it is close. I have called this premature extrapolation. It is part of a larger problem in long-term forecasting and strategy development: we lack discipline even about the emerging reality. More specifically, we fail to distinguish between the median (the mainstream or the norm) and the edge (the 3 percent early adopters, leaders, harbingers, or just plain flakes who may or may not become the median of the future).

You see it in corporate strategy: early adopters are assumed to be mainstream, and corporate bets are made as if those early adopters represent the norm. The new, new thing takes on an air of inevitability as the mainstream even though it has hardly begun. (Broadband to the home is a good example.)

In health care it is incredibly important to distinguish between the median and the edge. We have run into this trap many times. Forecasts that capitation would take over health care were rife in the early 1990s, even though less than 10 percent of doctors were in the group practices capable of absorbing capitation and the rest showed remarkably little interest in it. The problem wasn’t just with the forecast but with the strategic behavior of decision makers such as hospital CEOs: they behaved as if capitation were the mainstream by buying doctors, vertically integrating, and all that good stuff. Similarly, we have prematurely extrapolated Medicare+Choice enrollment, physician practice management, and the electronic medical record (a permanently emerging technology).

Sometimes the edge becomes the median. For example, managed care in various forms virtually eliminated unfettered fee for service. Internet to the home has become the median, and the average American uses it as a source of health information, although not for e-health services and transactions, which remain an edge phenomenon.

So what do you do? First, be honest and clear in your language and in your thinking about the future. Try to distinguish between the median and the edge. Futurists and forecasters use terms such as early adopters, wildcards, and harbingers to talk about edge phenomena, and terms like key driving forces, megatrends, and structural shifts to describe changes in the median.

Second, develop good metrics of the emerging reality. I am a big believer that if something is going to be a big deal in the future, it’s got to start sometime. That’s why surveys are so useful in measuring the real progress toward a new future, a new median. I have had a partnership with pollsters Harris Interactive for more than 15 years because most forecasting is based on a good understanding of the present.

Third, learn to look for what Malcolm Gladwell calls tipping points – the points at which phenomena start to grow or decline exponentially. (Others have termed this discontinuous change or inflection points.) Surveys will help you measure the diffusion curve of new trends. Once you have a few data points, you can do the math.

But you have to have a nose for the emerging trends to even ask the right question in surveys. That’s why the final tip is to keep a good ear to the ground. Conferences, networking with experts and peers, and reading this journal can alert you to candidates for the edge and give you a better sense of the mainstream.

Ian Morrison is an author, consultant and futurist based in Menlo Park, California. This column was published in the June/July 2002 Health Forum Journal.