The Future is Full of Surprises

This blog is the fourth in the series, Fighting Fraud Requires Anticipatory Skills.

The future is full of surprises—some are small, while others are huge. The firing of LSU football head coach Les Miles was a surprise to the LSU community and one that few people could have predicted a year ago. After this change, the Tigers’ future looked brighter as their offense improved and they won their next three games.

This past weekend, we were excited about watching the Tigers play the number one team in the country. Our team fought hard against the Alabama Crimson Tide but lost the battle in the 4^th quarter. I can’t help but wonder whether Coach “O” can keep this team together to finish the season strong or whether our team will check out, only to look forward to next season. It is difficult to anticipate what the team’s record will be at the end of the season, but we will know with certainty in less than three weeks when the season is over.

Anticipating changes can mitigate their impact. If we don’t anticipate changes, we will be surprised by them, caught off guard, and unprepared. The timing of future changes or events can fall into two types—gradual and significant.

• Gradual changes are small changes that occur over time (like a football team improving over the season). Each change is almost meaningless by itself, but when taken as a whole, they can have a big impact. As businesses embrace new technology and tools, you must consider these small changes or you could find yourself looking in file cabinets and all the while, everything is stored in the cloud. Do not ignore these gradual changes or you could be surprised later.
• Significant events happen quickly and usually have a huge impact (like firing the coach in the middle of season). The timing of these events may be hard to predict, but if you understand the warning signs, you may be able to see them coming. As an example, we can all remember events that impacted large companies like Enron, WorldCom, or HealthSouth. Few people could have predicted these events, but the warning signs may have been right in front of us. Below are a few warning signs that could be a prelude to a significant event:
  • Founder is the CEO for many years;
  • Executives sell off stock;
  • Regulatory investigations;
  • Bankruptcy;
  • High turnover in the accounting and finance departments;
  • Rarely or never missing expected earnings targets; or
  • Frequently changing external auditors.

  Oftentimes, we find ourselves unprepared for changes or events because we don’t pay attention—we are asleep at the wheel. When you are anticipating the future, always consider the timing even if the future is unpredictable.

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