And the forecast is ...

The following quote is from David Merrill’s blog

My younger brother is a meteorologist for an NBC affiliate in Salt Lake. I remember him telling me about accurate weather forecasting, explaining that the technology and weather pattern models existe to create very accurate 2-week local forecasts. The problem is the processing time would take 2 months or more. With the recent heat in Dallas (4 weeks of 100+ degree weather), I would be willing to wait if the forecast was any measure of improvement.

Besides the fact that David apparently missed the irony of his brother’s statement (waiting 2 months to get a forecast that is by then 6 weeks out of date) the statement does say a lot about forecasting. And forecasting is something I know a bit about since I did it for about 35 years.

As a Chief Financial Officer, I was expected to report on the financial condition of each of the companies I worked for. However, just giving a report of where we stood was merely an exercise in accurately describing history with maybe some exciting details of how or whether we’d survived some of the challenges we had encountered.

More often, my fellow executives and board members were interested in what was next, where we would be a year, 2 years, or 5 years down the road. And that, to borrow the logic of David Merrill’s brother, was easy to do. It would just take me 1.5, 2.5 or 5.5 years to do it.

Forecasting the future isn’t of course a matter of blind guessing. There are lots of things you can use to minimize the amount of guesswork. Things such as current and past trends; plans that you, your competitors, or customers have committed to; and technology and resource changes that you are aware of. But ultimately, none of these things can be counted on to behave in the future the way you think they will. There’s no guarantee. So you do your best. And when your best isn’t good enough you change jobs, or careers, or just retire.