We're Not Forecasting The Oil Price
A seasoned buyerside specialist shared with me a fascinating tale from the aviation industry.
An operator of aeroplanes were found not to be using future values of fuel costs in their business calculations.
The reason given? The global oil price had proven itself impossible to predict, so why bother?
I sum up the subsequent instruction;
your forecast will be wrong
get over it
the more you try and forecast, the better you’ll get at it
and give yourself a much better chance to respond well to future bumps or bonuses
It could have come straight from a sales one-on-one with an errant salesperson being reminded that not keeping their forecast up-to-date leads to more problems than you think it solves.
I realise forecasting often gets a bad rep. There’s the classic playwright, Eugene Ionesco line; You can only predict things after they have happened. Not to mention the equally dismissive quip, ‘I’ve never made a forecast and know I never will’…
Then those older may recall the scorn poured onto central pre-internet policy departments with their scenario planning operations. Despite the trumpeted successes, including such as the famous Perrier water contamination escape. Makes you wonder how much the recent KFC-FCK apology was pre-determined (see foot, although it appears reactive)?
Away from any huge manufacturing ‘pivot’ or PR masterclass, salespeople tend to dislike the forecasting cycle. Having to commit to business you are certain will come home, or apply a percentage chance or grade to its likelihood is fraught with issues. And that’s without considering any clandestine intentions such as easing pressure, sandbagging or awaiting bluebirds. Nor the ego-bruising that can distract when someone else tells you what you should be doing on a bid with which you alone feel uniquely, intimately entwined.
The first such system I encountered was known as PB; prospective business. It was from the 80s. Yes, it did seem primarily a management tool, always pushng for fuller funnels. But was key in scheduling vital delivery resource too. Who’d want to sell only to see implementation – and by association, invoicing and therefore your commission – delayed? Let alone the firefighting effect from your newly disappointed client.
I instantly thought of a trio of Sales ideas given the airplane plight.
Can you gain recognition that forecasting will always be ‘wrong’ allied with acceptance that you’ll get better and it definitely helps all concerned?
Is it possible or (desired) to provide a extra incentive and award for more (most) accurate forecasting?
And finally, any forecasting regimen that does not incorporate crucial links with your own sales process is flawed.
