The Beatings Will Continue Until Forecast Accuracy Improves

Question: What is the maximum level of accuracy with which you can predict the toss of a fair coin?

Answer: 50%

It does not matter that you’ve set a mandatory minimum forecast accuracy level of 90%, or even 60%. There is no incentive, no bonus, no allocation of restricted stock options that could make me forecast a coin toss at better than 50%, nor any threat or punishment. The only thing threats accomplish are to invent ever more clever ways to tamper with the coin; to cheat.

Which brings us to this important forecasting principle: forecast accuracy is first and foremost a property of the data itself.

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Survey Says…. Kitchen!

The question, by the way, was: “Where do you most commonly sort your mail”. And the reason is that the kitchen is where the trash can is. Let’s quickly walk through the process of sorting through our daily mail, or my personal process anyhow.  First, you set aside the packages – usually good stuff in…

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Print Me a Liver

There is a scene towards the end of Star Trek II: The Wrath of Khan, where Captain Kirk, being hunted by Khan and out of necessity defending his crippled spacecraft, maneuvers it into a nebula that disables both ships defenses and navigation. Kirk makes the observation that Khan, unlike the starship crew, is accustomed to living only in a two dimensional world, previously confined to the planet’s surface, and likely does not have the perspective to think in the 3D manner required in outer space. So Kirk launches an attack from underneath Khan’s ship, correctly supposing that Khan is only thinking in the right/left and forward/backwards dimensions, and not in the up/down direction.

In the business world we too are often caught like Khan, unprepared for a strategic threat from outside of our particular domain and comfort zone.

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Knowledge Squared

I was born in the Atomic Age, grew up in the Space Age, was first employed during the Computer Age, but what will likely outlast them all in relevancy is what we tend to call in these post-modern times the Information Age. What I learned in business and economics courses in college during that Computer Age was that there were four factors of production: Capital, labor, management and raw materials/land. What I think we will learn in this next age is that we were missing one – information. Up until now we’ve treated information as an asset, a subset of the other four perhaps - a little bit of capital, raw material, management and labor combined together. What we are learning is that information itself may be a bedrock principle of modern economics and society. There is even now the holographic theory of the universe – that the universe is just one big quantum computer and that it’s ALL about the information flows.

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Corporate Culture: Your Organization’s Response to Stress

Culture is how an organization internally responds to things going badly. Revenue did not meet targets; the product was late to market; the competition beat us to market, our cost structure is out of line; our quality is suffering; we’re losing customers and market share; our web site is a disaster and our user interface isn’t much better; we’re being out sizzled and out sexied.

So what is the response? Panic? Anger? Fear? Denial? Not invented here? Blame and finger pointing? CYA? Retrenchment into process and bureaucracy? Freeze everything? Fire everyone? Reorganization? An investigative committee? An acquisition? Fraud/cooking the books? Surround everyone with everything we’ve got?

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The Sound and the Fury of Enterprise-Wide Process Management

When did “customer centric” first become the clichéd buzzword it has turned into today?

Fifteen years ago, perhaps? “We’re CUSTOMER CENTRIC!” “The customer is always right; We put the customer first!” Yeah, yeah, yeah, blah, blah, blah … And then they trot out their customer-centric diagrams, typically something circular /radial with the CUSTOMER in the bulls-eye, depicted visually either as encircled like the Siege of Stalingrad, or else as being attacked like a parasite by assorted organizational macrophages. Over time these representations evolved into a pyramid structure, with the customer either at the BASE, purportedly demonstrating how everything at this organization emanates from the customer, or at the APEX, showing the customer as the ultimate goal of the organization’s functions and activities.

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Strategic Workforce Planning

“HR executives are well-equipped to competently manage the basics – recruiting, hiring, onboarding, payroll, benefits, training, etc. – and operating unit general managers are generally satisfied with the results. The typical missing link for HR executives, however, is often their ability to assist general managers with the more strategic issues, like:

Are we better off keeping our geographic sales structure after the acquisition, or do we now have sufficient critical mass and concentrations of expertise to take an industry-centric approach?
Can we predict how the increased average age of our skilled workers, their upcoming retirement and the massive replacements by inexperienced workers will affect the business?
The increased production and sales capacity is going to make R&D the bottleneck; what are the critical technical skills we’re going to need and what is the optimal mix of hires, layoffs and retraining to counteract that bottleneck?
In order to meet the increased seasonal demand from new customers, should we build inventory early, run additional shifts or outsource some of our production needs?

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Tell the Story

What’s the story of your organization, your business?

There’s a story there, there always is. Numbers on a spreadsheet don’t do it justice. Yes, there is the annual report, but first, who reads it, and second, that’s just the point – it’s “annual”. The story of your business is dynamic, it runs all year long, 24/7. Numbers and metrics are only part of if.

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