Rules for Effective Forecasting: The Main Goal Essay

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Rules for Effective Forecasting:

The main goal of forecasting is to identify the complete range of probabilities facing a society, organization, or the entire world. Forecasting is a process based on prediction and a major process in determining the future and how to prepare for it. This process of forecasting is based on the myth of accurate prediction, which is based on the assumption that forecasting is achievable in a world with preordained events and that the present does not impact the future. Since prediction is centered on determining future certainty, forecasting should focus on identifying the whole range of probabilities rather than a limited set of illusory certainties. Therefore, the major task or responsibility of the forecaster is to chart uncertainty in attempts to recognize the full range of possibilities.

In his article, Paul Saffo demystifies the process of forecasting in order to assist executives to become complicated and engage consumers of forecasts. This process of demystifying forecasting does not focus on making executives and consumers passive absorbers. The author demonstrates how forecasts can be used to widen understanding of possibilities and limit the decision space within which an individual must exercise spontaneity. As a result of his focus, Saffo examines what executives can do to avoid being surprised or blind-sided by wild cards like the events of 9/11. Moreover, he examines what executives can do to avoid being surprised by radical changes in markets or the relatively abrupt emergence of disruptive technologies (Saffo, 2007, p.122).

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Saffo attempts to describe what forecasters achieve through outlining six simple, commonsense rules that competent business executives should observe when they participate in the voyage of discovery with professional forecasters. These rules for executives are planning a cone of uncertainty, look for the S curve, embrace strong opinions loosely, accept things that don't fit, evaluate the past as much anticipating the future, and determine unsuitable time to make a forecast. The author provides these rules as a means of giving executives tools they can use to evaluate forecasts themselves.

The first rule i.e. defining a cone of uncertainty is based on the need to rely on intuition and judgment as a decision maker. The eventual intuition and judgment is based on the essential context provided by effective forecasting to guide the process. Effective forecasting also widens an individual's understanding through exposing overlooked possibilities and unexamined assumptions regarding expected outcomes while narrowing decision space for exercising intuition. The process of mapping a cone of uncertainty is considered as a mechanism for outlining possibilities that goes beyond a specific event or moment. During this process, the forecaster focuses on defining the cone in a way that enables the decision maker to exercise strategic judgment. This process incorporates several considerations including defining the breadth of the cone of uncertainty, relationships among elements, and positioning of probable outcomes (Saffo, 2007, p.2).

The second rule is to look for the S….....

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