Forecasting and the Magic 8-ball

17 09 2013

“The groundhog is like most other prophets; it delivers its prediction and then disappears.” ~Bill Vaughan

 In the business world, we’ve got to make predictions all the time.  What volume will we get next year?  What will our client payment rate be?  How much will we spend on travel & education?  Will the person I just gave a corrective action to improve, or spiral downward?

 Management is gray.  (Heard that one before?).  You gather your data with as sophisticated a computer model as you have, present it, and ask for opinions of those who have some experience, give it one last pass of the “smell test”, and then deal with any variance from projection.  I’ve never, in 20 years of management seen a budget projection that was even within 1% of projection.  So go into it knowing that you’ll have to make corrections along the way (i.e. hire staff, downsize, cut expenses, etc.). 

 Speaking of sophisticated computer models and projections… 



Rubes cartoons used with permission.




Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )


Connecting to %s

%d bloggers like this: