Forecasting Change

Anyone can forecast changes in life with the broad sweeping strokes of the law of odds and the laws of nature.  But what about those changes that assail the marketplace, leaving organizations reeling?  Is it possible to forecast those changes, to anticipate their unfolding? A combination of reflection on the past and a scan of the present can provide an organization with a useful picture to predict the trend lines of the future.  For this past-present-future exercise to be valuable, one needs to wield a broad perspective and an open mind.

Frequently we find ourselves so wound up in the daily requirements of our businesses, we don’t take the time to reflect on what has actually transpired.  As long as there is money in the bank account, small entities often wait until their year end for financial statements.  Larger organizations have the specialists internally to crank out financial statements on a monthly basis but fail to allocate the time to understanding how their past performance impacted those results especially if the numbers are good.  Either approach leaves extraordinarily rich information laying on the table unused.  Dedicating a portion of time each month to reflect on past performance with the intent to mine it for pitfalls and opportunities, is an investment that can pay dividends.

Scanning the present horizon, can also provide glimpses into the opportunities and risks around you.  This scanning needs to be intentional.  It should be carried out in a strategic manner using a variety of methods such as networking, research, and reading.  The underlying intention is to gather as much information as possible about your industry while keeping in mind that there are local, national, and international factors that have the potential to completely upset your apple cart or to offer up the pot of gold at the end of your rainbow.  Scanning the present requires both a defensive and offensive viewpoint.

The third part of the exercise involves orienting one’s view to the future; considering the future in the context of the past and present.  Actuaries in the financial and insurance industries do this for a living.  They gather the statistics of the past, evaluate the potential impacts of the present, and forecast the future performance.  In other words, they forecast the changes that are coming and in doing so they minimize the risk and uncertainty by establishing preparedness plans.  Forecasting change does not entirely eliminate risk or uncertainty but it does help individuals and/or organizations achieve a greater awareness of the threats and opportunities that are constantly presenting themselves on the horizon.

To effectively use the past-present-future technique, one does not need  to be an actuary or have reams of data.  What is required is the willingness to thoughtfully and honestly assess the results of the past while being open to processing all the clues that a scan of the present offers.  The exercise requires a commitment of time, think of it as a fitness break for your organization, a time that you set aside purposefully.  During this time you must also stretch your vision to the future horizon, identifying and preparing yourself and your organization to weather storms or seize opportunities.

 

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