Executive Briefings

What We Need Is a Little Intelligent Forecasting

Competence in forecasting does not mean being able to predict the future with certainty. It means accepting the role that uncertainty plays in the world, engaging in a continuous improvement process of building your firm's forecasting capability, and paving the way for corporate success. A good forecast leads, through either direct recommendations or informal conversation, to robust actions - actions that will be worth taking, no matter how the realities of the future unfold. In many cases, good forecasting involves recognizing, and sometimes shouting from the rooftops about, the inherent uncertainty of the estimates, and the fact that things can go very bad very quickly. Such shouts should not invoke the paranoia of Chicken Little's falling sky; instead, they should promote the development of contingency plans to both manage risks and rapidly take advantage of unexpected opportunities.

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Competence in forecasting does not mean being able to predict the future with certainty. It means accepting the role that uncertainty plays in the world, engaging in a continuous improvement process of building your firm's forecasting capability, and paving the way for corporate success. A good forecast leads, through either direct recommendations or informal conversation, to robust actions - actions that will be worth taking, no matter how the realities of the future unfold. In many cases, good forecasting involves recognizing, and sometimes shouting from the rooftops about, the inherent uncertainty of the estimates, and the fact that things can go very bad very quickly. Such shouts should not invoke the paranoia of Chicken Little's falling sky; instead, they should promote the development of contingency plans to both manage risks and rapidly take advantage of unexpected opportunities.

Read Full Article