Forecasting’s ultimate goal is to accurately understand how your business will run The chart below shows the input that a forecast has on any given business decision. As you can see it is only one of six possible inputs (although past market conditions may also be captured in the forecast). Tribal knowledge, gut feel and…
Forecasting, Pt 3
Iterate regularly to test for variable sensitivity Every model has the ability to be stress tested. Test them regularly to see how the result changes based on varying conditions. Test for sales dropping 10%. What if prices drop 5% and sales rise 10%? What if your entire logistics department is out sick for the month…
Forecasting, Pt 2
Never, ever, over-trust the forecast output Models are unintelligent. They have no means of deciding to leave out unnecessary information or retrieving information that they actually need. Unfortunately, there is a tendency to trust the outcome of previously successful models. The thought process goes: “It was right before, it will be right now.” Until suddenly…
Forecasting, Pt 1
Forecasts are no more than a cog in a Prediction Process Any process that ends in a decision involves forecasting the future. No decisions can be made that do not account for possible future actions. At their most basic level, forecasts are simply predictions of what will occur in the future. Every C-level executive has…
10 Simple Principles to Pass Down
In the recent past it has become clear that the world needs a new set of fundamental commandments if stability is to be achieved. Unfortunately change will only come when enough public support comes together with a single voice. These 10 rules are simple value statements that can create a framework for all decisions. 1….
The Greening of America
It continues to surprise me how far the green movement has come in even just the past three years. At the same time I’m surprised at how little traction has been gained on the everyday side of green. When you look in any popular magazine or newspaper there is always some new story of a…
It’s About the Experience, Not the Technology
Microsoft doesn’t quite understand why Google is successful in search. Do you think the average surfer even knows how Google determines what order pages appear on your screen when you run a search? I can tell you right now that they don’t care and they don’t really want to know. So why do people choose…
There’s a Problem With Consulting
Consulting has become a game that most everyone plays the same. Most consulting firms are set up in the same fashion, hire the same type of people and go after the same types of clients. Really, is one Harvard MBA different than another? Does having 15 of them as Senior Managers make you a better,…
Cutting Edge of Communication
Want to know a secret? Email is not a key source of communication anymore. I get more good information via snail-mail now than through my email box. People are on the move so often now that email is a burden for sending and receiving detailed information. It’s great for passing along meeting notices though. The…
The Carbon Neutral Smoke Screen
It is all the rage for companies to strive for carbon neutrality. A system has been set up to trade carbon credits on the open market where carbon neutrality can be bought at a price. No longer are companies applauded for simply reducing their footprint, it requires an additional outside investment in, usually, a non-profit…