Forecasting Weather or Business?
Q: Who does everyone listen to but never believe?
A: The weatherman.
Funny, but true.
We rely on weather forecasts. We make big and small decisions based on those forecasts. We look at the current day and long-range forecasts. Most websites offer weather forecasts in as short as 15-minute increments and as far as a month out. There are countless charts, numbers, predictive models, historical trends and eyewitness reports. Yet still, we think about weather forecasts as an inexact science, at best.
Business forecasts are eerily similar. The language can even be intermingled: a bright spot, the perfect storm, a clear outlook and cloudy horizon; all could be used for both a business and a weather forecast.
With business forecasting, we have even more charts and data. We have trends and reports that are in real time. We have analysts and predictive models for almost every contingency. We project out for the year, the quarter, the week, day and even the hour.
Making a forecast is scary and dangerous work. But it needs to get done. People make life-impacting decisions based on those forecasts. For both kinds of forecasts, six key things hold true.
A forecast is meant to inform and inspire at the same time. Which forecast would you rather follow, partly cloudy or partly sunny? It’s the same thing said slightly differently.
How are you going to approach the news you have to share, especially when the data you have in front of you is mixed? The perspective you bring to a forecast is critical. Is your business expected to go up, down, mixed or who knows??
2. Be prepared.
Your forecast needs to give people information to make the right decisions. Are you going to need an umbrella? Or are you going to need to hire people? The value of any forecast is only as good as the preparations you direct people to make. It is always better to be overprepared than underprepared.
3. They’re looking to you.
A forecast is only as believable as the forecaster him/herself. Oftentimes, people are buying/believing the person delivering the information as much as the information itself. Confidence is key. If people don’t see you as a person of integrity and trustworthiness, your forecast is going to be worthless.
Sometimes you’ll be right, and sometimes you’ll be wrong. Hopefully, you’re right more often than you’re wrong. The amount of grace you’re granted is directly linked to how well your personal brand is received.
4. Confidence to make a call.
For both weather and business, there is no shortage of data. In fact, there is so much data that it can quickly lead to data paralysis. And data can be looked at in so many different ways that it can be made to tell almost any story you want.
At some point, you have to have the confidence to make a call. Your forecast will be just that, yours. You’re going to be the one standing there alone delivering your conclusions, your perspective and your expertise. It is your credibility and reputation that are on the line. It takes a tremendous amount of confidence to make a forecast.
5. External factors.
Some things that will impact your forecast are just out of your control. No forecast can foresee all of the possible external factors. The question will be: how do you react when external forces present themselves?
Just as important will be how you respond. That, of course, comes down to the kind of forecaster you are. Do you hide behind external forces to mask the inaccuracy of your forecast? Or do you issue a new forecast based on your new data?
6. Advances, sort of.
There have been tremendous advances in both weather and business forecasting. Each field has more tools, more data and more technologies than ever before. Yet, both weather and business forecasting still remain so inaccurate that a better description is that they are two parts science and one part art.
And in both cases, weather and business, miss too often and it will be someone else’s turn to forecast.
Read the article on WOBI here