The Little (Illustrated) Book of Operational Forecasting
Steve Morlidge's latest work, The Little (Illustrated) Book of Operational Forecasting, is a unique contribution to the field. It is a guide for short term operational forecasting, delivered in a pocket-sized format, through 79 brief (two page) illustrated lessons. As I stated in my praise for the book:
Very comprehensive and well-organized -- touching on essential yet frequently overlooked elements of the business forecasting process. The book is arranged in bite-sized chunks, each delivering an important point, while the message is reinforced by an accompanying graphic. Both practicing forecasters, and the managers who oversee or participate in the forecasting process, will find this a fast and valuable read.
Steve has graciously allowed me to serialize eight of his favorite sections, which I'll post over the next couple of weeks. But lets begin with some words from Steve himself:
Like many other people I came to operational forecasting believing, that, while it was not easy to do it well, the challenge was purely a technical one of finding the best technique or method.
After a number of years working with academics and with practitioners trying to work out what was going on I came to understand was that in reality the reason why so many businesses struggle with forecasting lies not in a failure to master the technicalities of the process but in bad habits…mainly bad thinking habits, that can be traced back to fundamental misunderstandings of the nature of the business reality that forecasters have to deal with.
That’s the bad news.
The good news is that correcting these false beliefs does not make things more difficult. If anything, letting go of them make life easier. The conclusion I came to is that people should focus on stopping doing the stupid things rather than trying to do clever things – at least to start with.
This applies to forecasting practitioners but even more so to the people who they serve or report to, who can and do screw things up and helps waste millions on shiny fake ‘silver bullets’.
The ‘Little Book of Operational Forecasting’ is my attempt to pass on the lessons that I have learned in a clear and accessible a fashion as possible.
The serialization begins this week!
Coming Next: What IS a forecast?
Many of the practical problems that people have with forecasting can be traced back to mutual misunderstanding of the meaning of words like ‘forecast’ and ‘target’, and this can have big implications for both the forecast process itself and how people interpret the results. This lesson aims to set things straight.