The one that knows the future can’t lose! Why is forecasting important part of your business?
Posted On 2019-01-29
There is a movie called
Edge of tomorrow, it is an American SCi Fi movie starring Tom Cruise.
The film takes place in a future where Earth is invaded by an alien race
with ability to manipulate and control the time & Humans are
fighting the enemy without knowing about this ability. There is a scene
that Emily Blunt which know about this ability explain it to Tom Cruise,
she says below quote:
An enemy that knows the future can’t lose!!!
It is a brilliant quote. imagine if you be able to know the future or
predict it 100% accurate!! that would be a cool gift and just I am
getting really excited just by thinking about what can be done with that
It is a solid fact that many organizations have failed because of
lack of forecasting or faulty forecasting on which the planning was
based, as such in the operations of modern management, it is absolutely
important & necessary aid to forecast & plan and proper
forecasting is the backbone of any effective operations considering
today`s competitive business environment & lack of Economic
So I would like to translate above quote to below:
The one that knows the future can’t lose!!!
Of course it is impossible to know the future & also it is
impossible to predict it 100% accurate. But if you be able to predict it
better than the others, then you would have an advantage compare to
others that makes you unbeatable & successful.
In Business world, forecasting is like predicting the future but not
like fortunetellers using Oracle or Tarot card decks :), The forecast
is intelligent assumptions based on reliable data, proper market
research and deep understanding the market & believe me guys, not
everyone can do it properly!
It takes years of experience & many practice to learn and be come a master of this game changing advantage.
Forecast failure has so many casualties and so many people lost
their jobs, many companies went under. The consequences of bad
forecasting are really harsh and sometimes can destroy years of success
swiftly and instantly.
Just have look on following to see how important in this topic and
what giants and idols died & became Victim of bad Forecast:
- Lehman Brothers: Was a global financial services
firm, Lehman was the fourth-largest investment bank in the United
States. On September 15, 2008, the firm filed for Chapter 11 bankruptcy
protection following the massive exodus of most of its clients, drastic
losses in its stock, and devaluation of assets by credit rating
agencies. Lehman’s bankruptcy filing is the largest in US history. CEO : Richard S. Fuld, Jr.
Fuld was nicknamed the “Gorilla” on Wall Street for his
competitiveness. Fuld worked for Lehman for nearly 40 years served as
CEO from 1994 through the firm’s collapse in 2008, Fuld was the
longest-tenured CEO on Wall Street. Fuld had steered Lehman through the
1997 Asian Financial Crisis, a period where the firm’s share price
dropped to $22 in 1998. Lehman had a yearly loss of $102 million in
1993, but after Fuld became CEO the firm had fourteen straight years of
profits, including one of $4.2 billion in 2007. Fuld ranked
number one on their Worst American CEOs of All Time list & was also
named in Time magazine’s list of “25 People to Blame for the Financial
- Walgreens : Largest drug retailing chain in the United States. The company operated 8,217 stores in all 50 states. EVP and CFO : Wade Miquelon – The
reason for Wade Miquelon’s recent, sudden departure from Walgreens,was a
drastically wrong financial forecast. Miquelon had forecast in April
that the drugstore chain’s pharmacy division would show $8.5 billion in
sales for fiscal-year 2016. Three months later, he reduced the forecast
by somewhat more than a rounding error: $1.1 billion. So Forecasting Error Cost Walgreen’s CFO His Job.
- Hewlett Packard, SVP : Eric Cador – Confidence was
running so high with Eric Cador. He was certain that HP’s PC success
would translate to the tablet market. “In the PC world, with fewer ways
of differentiating HP’s products from our competitors, we became No. 1;
in the tablet world we’re going to become better than No. 1. We call it
No. 1-plus.” Not so much. In our review we panned the TouchPad’s
sluggish performance, weak battery life and skimp app selection. HP
would kill off the TouchPad and all webOS hardware just 7 weeks later
after staggeringly weak sales he said. Bonus: From
HP chairman Ray Lane in Sept 2011, after the Touchpad was discontinued:
“You cannot develop serious portable applications on Android.”
- Black Berry, CEO : Thorsten Heins – He
stepped down as CEO of BB and was replaced by John S. Chen on November
4, 2013. During his time as CEO, the company continued to struggle in a
rapidly changing market. In 2012, Heins was named Cantech Letter’s 2012
TSX Executive of the Year and ranked a year later as third on a list of
the worst CEOs of 2013. “In five years I don’t think there’ll be a reason to have a tablet anymore.” said Heinsin 2013. Tablet sales are still very much on the demand & growing.
Above are only some of many examples of Bad Forecast.
So to sum up, Forecasting implies the act of making a detailed
analysis of the future and making intelligent assumptions which proper
planning is impossible without have an accurate Forecast. So the better
you forecast, you will have much better change of success in your
Always remember :
The one that knows the future can’t lose!!!
I will try to write more about how to have proper & accurate Forecasting in coming posts.
P.s: Reference : http://www.laptopmag.com