Page 3 - Thinking_the_Unthinkable_Article_for_IBS

Forecasting techniques like
qualitative techniques, time
series analysis and projection,
causal models, econometric
model, X 11 models and other
similar models are very useful
when there are established
cause – and – effect
relationships between the
parameters and explicit
correlations between past and
present data points. However,
significant changes like new
products, new competitive
strategies and so forth diminish
the similarity of past and future.
Their short-term impact may
not be much visible but in the
long term they can alter overall
patterns and in such cases –
when the forecast has to be
over a reasonably longer time
horizon – many of these
forecasting techniques do not
meet up to business Figure 4: Navigating the Knowledge Spectrum: Inverse relationship between quality of Data available and Tie Horizon: Both
expectations. impact the quality of Decision taken by Managers and Leaders

Organization’s demand from L&D to help their managers perfect their skill in choosing an appropriate forecasting technique and use these tools for
making business decisions intended to play out over short term or immediate future is well placed and must be encouraged. But using the same tools
for forecasting in medium term to long term horizons, though, is not an advisable approach as these tools tend to lose their accuracy with increasing
time horizons.

With reference to Figure 4 10 note that
traditional L&D efforts focus around
Learning (from Past) and Execution (from
Present). Due emphasis is also given on
Immediate Future where planning is key.
However, this may not be sufficient for
current markets.

In industries like the Ready Mix Concrete
(RMX) industry which is a made to order
and therefore a pull business, two elements
play an extremely critical role in every
decision that its managers and leaders
make

1. Uncertainty in the business environment
2. Insufficient information available at the
time of decision making

In industries, similar to RMX, Managers are
expected to be more skilled in Decision
Making pertaining to Near Future. These
decisions need to be robust considering the
fact that these decisions will determine the
health of the organization in the Near
Future. Likewise, senior leaders, CEOs,
Executive Committee members are
expected to be proficient with handling the
foreseeable and the unknown future where foresight and imagination is the key. It is here that traditional forecasting tools – which are centered on
handling Certainty and Risk – lose their edge.

Very often, L&D teams are mandated to focus exclusively on Execution and Planning (Now and Immediate Future) especially in organizations that have
been successful by maintaining a strong focus on operations. This incidentally is also the comfort zone of L&D due to abundance of tried and tested

10 Brilliant Mistakes by Paul J. H. Schoemaker. Wharton Digital Press