The Spring 2010 issue of Foresight is now available. Here is Editor Len Tashman’s preview:
What’s the connection between hindsight and foresight? That is the question Paul Goodwin asks in his Hot New Research column leading off this issue. The problem is that hindsight bias – the tendency to believe that our forecasts were more accurate than they actually turned out to be – makes it more difficult to learn from our forecasting errors, which restricts our ability to improve our forecasting skills. Paul discusses the lessons from recent research on hindsight bias, including techniques to mitigate its detrimental effects on forecasting.
The Spring 2008 issue of Foresight presented a feature section on prediction markets and their application to pharmaceutical forecasting and beyond. We now welcome Andreas Graefe and his new column on prediction markets. Andreas will keep you on top of developments in the field and how likely these are to succeed. Here he examines the new Pharmer’s Market, a prediction market created in 2009 to forecast the likely success of new drugs in clinical trials.
In our feature article, “A DEFT Approach to Trendbased Foresight,” Adam Gordon takes issue with forecasting methods that extrapolate trends from past data without consideration of a trend’s underlying forces. These are the Drivers, Enablers, Friction, and Turners – DEFT – that determine the course of the trend. DEFT does for trend projections what SWOT analysis does for strategic planning, providing a framework for organizing and analyzing factors that promote and retard the success of our endeavors.
Sales and Operations Planning Editor Bob Stahl teams up with lean-transformation consultant William Kerber to reconcile two very different aggregations of product family groups. Lean manufacturing families are organized by how products are produced; marketfacing families are needed to support the creation of demand forecasts. The challenge for companies is in finding ways to get these families to stop feuding and work together.
As companies seek cost-effective IT solutions, opensource software has become an intriguing alternative to proprietary commercial offerings. A product with potential for forecast model building is R, which is free and available at www.r-project.org. In “Free Open-source Forecasting Using R,” Stephan Kolassa and Rob Hyndman review R and find it compares quite favorably to professionally produced and quality-controlled commercial software.
Joe Smith concludes his three-part series on Forecast Process Design with a discussion of the challenges of managing change in an organization’s forecasting process. Many organizations give short shrift to these challenges, concentrating their focus on analysis and tools. This is not a formula for success, he asserts. “Driving change requires changing hearts and minds.”
Carolyn Allmon evaluates two recent treatises on forecasting: a self-published textbook, Business Forecasting: A Practical, Comprehensive Resource for Managers and Practitioners by Robert A. Krueger, and a McGraw-Hill book, Strategic Business Forecasting: A Structured Approach to Shaping the Future of Your Business by Simon Ramo and Ronald Sugar. Carolyn feels that, while the two books differ widely in their focus and approach, both are worthy of a close look by the practicing forecaster.