Certainty

I once had a chief executive officer (CEO) who was furious with me. Our board of directors met in mid-November, and one of the items they considered was the financial projection my staff created. That year, we projected a small loss. (Yes, a large health insurance company was expecting to lose money, and they weren’t happy about it.) When the year ended, sometime around February, we posted a loss that exceeded the projection by 10s of millions of dollars.

“But you must remember, beloved, the predictions of the apostles of our Lord Jesus Christ. They said to you, ‘In the last time there will be scoffers, following their own ungodly passions.’ It is these who cause divisions, worldly people, devoid of the Spirit. But you, beloved, building yourselves up in your most holy faith and praying in the Holy Spirit, keep yourselves in the love of God, waiting for the mercy of our Lord Jesus Christ that leads to eternal life. And have mercy on those who doubt; save others by snatching them out of the fire; to others show mercy with fear, hating even the garment stained by the flesh.” - Jude‬ ‭1‬:‭17‬-‭23‬ ‭ESV‬‬‬‬‬‬

I know you already have several questions. I could expand on why the projection given to the board in November worsened in two months. But instead, I want to talk about projections made using assumptions.

If I asked you if it was raining outside after you had just walked in and you said, “No,” I could be fairly certain that if I walked out to my vehicle, I wouldn’t get rained on. However, there is a chance the rain could start at some point and that point could be as soon as you walk in the door. Therefore, it could be raining when I walk outside. In other words, 100% certainty is not guaranteed.

This “certainty” gets even worse if you have to project the future. I know there were a couple of times this last winter when the meteorologists predicted a large amount of snow, but when the time came, we got much less. I think the opposite may have happened a year or so ago near New Year's when we got 16” of snow. (I don’t remember any meteorologist predicting we’d get that much.)

My point is we are only human and, while we strive to create models and predictions, they always include assumptions and probabilities that can end with a different result than expected. For example, tossing a (fair) coin is either going to land on heads or tails and there is no way to predict the outcome exactly.

So, rather than explain why our projection came out differently than our financial statement, I want to tell you what happened next. The CEO was so mad that he demanded we hire an actuarial consulting firm to review our projection process and make it better. An actuarial consulting firm is like a hired gun—someone with a lot of experience who charges by the hour to do assigned actuarial tasks. We hired a consultant, who charged $500 per hour as I recall, and he and his staff reviewed our projection process and deemed it good. While this one specific year was off, our projection was within a couple of percentage points of the final result most of the time. This reassurance cost my CEO, the company and, ultimately, our policyholders about $20,000.

Was it worth it? I believe it was. Even though my department was determined to be doing a good job projecting financial results, our CEO only saw how the projection varied from the financial result booked. He gained a respect (although I wouldn’t go as far as to say an appreciation) for the work we did to try to get him the best projection we could.

“But as for you, teach what accords with sound doctrine. Older men are to be sober-minded, dignified, self-controlled, sound in faith, in love, and in steadfastness. Older women likewise are to be reverent in behavior, not slanderers or slaves to much wine. They are to teach what is good, and so train the young women to love their husbands and children, to be self-controlled, pure, working at home, kind, and submissive to their own husbands, that the word of God may not be reviled. Likewise, urge the younger men to be self-controlled. Show yourself in all respects to be a model of good works, and in your teaching show integrity, dignity, and sound speech that cannot be condemned, so that an opponent may be put to shame, having nothing evil to say about us. Bondservants are to be submissive to their own masters in everything; they are to be well-pleasing, not argumentative, not pilfering, but showing all good faith, so that in everything they may adorn the doctrine of God our Savior.” - Titus‬ ‭2‬:‭1‬-‭10‬‬‬‬

I think one of my failings as a human is to expect certainty in every situation. I desire to be given the right information to make a decision that, ultimately, will be to my benefit and, too often, get upset when things don’t work out that way. What I strive for is to trust God that his plan for everything is better than my desire to get a good outcome. That is where the peace that only God can provide comes from.