Punxsutawney Phil and the Problem with Petroleum Prognosticators
If the Hedge Hog known as Petroleum Phil casts a shadow on February 2, should commodities traders expect 6 more months of $80 oil?
If you make one “bad” prediction against a slew of “good” ones, should that one bad prediction define you?
Well, in this Groundhog Day episode of The Energy Detox, we’ll help you 1) avoid putting too much stock in the results of a single prediction and 2) look for times when your fear of making decisions is holding you and your stakeholders back from sustained success.
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Episode 10: Do the Results of Your Personal Booms and Busts Really Speak for Themselves?
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Transcript
(AI training in progress; please excuse any errors)
Well, earlier today here in western Pennsylvania Punxsutawney Phil cast a shadow signifying six more weeks of winter. And while that prediction and all of the fun and festivities surrounding that prediction weather, that's the fun of being in Punxsutawney and drinking since 3am, and dancing and listening to music as you waited the arrival of the road to make his prediction, or whether that's the fun of serving your kids cupcakes for breakfast, as we did this morning here in the Senate household, although if you happen to be watching, you'll see that these aren't just any cupcakes but Punxsutawney Phil shaped cupcakes…but nevertheless, it's a it's a day of fun, right? It's a silly holiday that comes with one common question that is asked every single year. And that is, of course, how good is Phil at predicting the weather. And with a little bit of Googling, you will see that Phil is not very good at predicting the weather over the last 120 years. Some people put his accuracy at between 36 and 39%, which of course is less than a coin flip, and certainly less than those who actually predict the weather for a living. But nevertheless, again, this is a day of fun and excitement and revelry, at least here in western Pennsylvania. And with that, we're also going to take the opportunity to have a little bit of fun on the energy detox and ask you two questions that are related to your ability to make predictions. And these are two questions that we have asked repeatedly on the energy detox and for good reason, because they are two questions that I find myself asking quite a bit of the people with whom I work because they reveal in many cases, barriers to people who are afraid to make decisions, who are afraid to make predictions, or more importantly, who put too much stock in the individual prediction, or maybe one or two predictions that somebody makes and misses out on the fact that we should be looking at a much bigger picture picture, we should be looking at the process behind the decisions and the decision makers, not necessarily the results of one or two predictions. And so with that the two questions to ask yourself today are one, are you putting too much stock in individual predictions, individual decisions and the results of those decisions? And the second question to ask yourself today is, are you afraid of making decisions? And is that fear impacting you impacting your team and impacting everyone who's counting on you to make decisions and to make predictions? And coming back to that first question? It really is a big question within the oil and gas industry for no other reason, then it is an industry that relies heavily on the predictions of commodity prices, right? Who's predicting at dollar oil, $100 oil, who's predicting for dollar natural gas, natural gas, whatever the case is, people are constantly making predictions about where commodity prices are gonna go. And very often, when those predictions turn out to be correct, what does that person do? Well, you know, they might pat themselves on the back, right? And when the prediction turns out to be not so correct, they might, you know, take a step back and, you know, try to hide for a little bit until they make their next bold prediction. But more importantly, for you as a leader, the question is, are you putting too much stock in other people's predictions? And are you seeing the results of just one or two predictions as indicative of how good of a prognosticator and and predictor and leader that individual is? Because it's human nature to do that, right? Unfortunately, in this day and age, it is human nature to pile on the heap and celebrate somebody when they just happen to make a good bet. And educated bet an educated guess? Sure. But at the end of the day, what are we doing when we're predicting commodity prices? We're making a bet, right? And one bad bet does not define you as a as a gambler, if you will. Now, if you've been betting, again, for the last 120 years, and you've got a 39% success rate, then again, I
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would argue that you're probably not the best gambler, the best better, but again, bringing it back to you. Are you limiting yourself? And are you limiting the, you know, what you see as the potential of those around you because of a single prediction? The next question, certainly related, and that is, are you afraid, and in many cases, unconsciously afraid of making decisions because of a fear that you're going to be wrong? And again, this plays out in every, every industry, certainly in your personal life and your professional life? Again, it's something we've talked about over and over again, and it's one of the biggest barriers to success. It's one of the biggest barriers to progress, because in many cases, people are afraid. And it goes back to the first question, right? They're afraid because they're, you know, they're seen as, as, as somebody who made a bad decision, right? One time they make a bad decision, and they're cast aside, whereas the reality is, if you're making consistent decisions, and you have a process behind that decision making you have people surrounding you to help you make those decisions, then at the end of the day, odds are that you're going to make more good decisions than bad decisions. And that's what you're tasked with doing as a leader not always being right. But always being willing to make a decision or to at least enable those around you to make decisions to move yourself to move your company to move your team forward. And again, this applies whether you're an established leader in a company, whether you're your parent, husband, wife, whether you are in between jobs, Because one thing again, a conversation I had yesterday with somebody who's in between jobs and their job seeking. And again, there's so much fear around having the perfect resume the perfect approach the perfect cover letter, the perfect outreach to hiring managers. And yes, you want to put your best foot forward, but at the end of the day, what are you doing, you're increasing your odds, you're increasing your odds of success, so that you're making more good decisions than bad decisions, and you keep increasing those odds. And you're going to find yourself in a much better place than if you kind of shrink back. And you're afraid to make the occasional bold decision. Big decision, if you don't have the confidence to know that, again, you have gifts you have knowledge are surrounded with people that have have knowledge and can support you. And if you don't lean on that support to make a good decision, well, you're gonna find yourself stuck, you're gonna find yourself like Bill Murray in the movie Groundhog Day, right? You're gonna be going through the motions over and over again, and not really getting anywhere you're gonna find yourself kind of, you know, getting passed up by other people until you're willing to make those bold decisions and acknowledge that you might be wrong. And if you have the confidence and the people around you who are willing to allow you to be wrong once in a while, then great. Now, if you're a leader, like say, Punxsutawney Phil, and you're always wrong, and people are still propping you up, then that's a whole different set of problems for another day, of course, but for now, focus on you and your ability to again, make decisions, make confident decisions move forward and avoid the trap of putting extra pressure on those around you who, again, might be happy to make a decision but are afraid to do so because you put too much stock in the in the end results of one or two limited decisions instead of looking at the big picture, the full picture and really, you know what your ultimate objectives are as a leader as a company as a team. So with that being said, I encourage you to Ted today to go out and make confident decisions make bold decisions, make your own prediction about what the weather is going to look like for the next six weeks. And either way, have a happy rest of the groundhog day have a happy and safe rest of the week. And if you happen to be in an area that's going to be hit by this winter storm that's at least coming here in western Pennsylvania or if you're on the edge of your seat waiting for some more freezing temperatures down south. Best of luck to you. Stay safe, stay warm and certainly have hope you have a great rest of the day. So as always, thanks for tuning in. Thanks for checking out the energy detox and take care