By Thornton May
Futurist, Senior Advisor with GP, Executive Director & Dean - IT Leadership Academy

When not-yet-famous primatologist Jane Goodall informed her mentor, Louis Leakey, the still very famous paleoanthropologist that chimpanzees in Tanzania were manipulating forest materials such that they might “fish” for termites, Leakey replied, “Now we must redefine ‘tool’….” A tool which redefines modern man and amplifies our species’ unique capacity for multi-temporality [i.e., the ability to mentally exist in more than one time simultaneously, to engage in mental time travel and perform conditional analysis] is forecasting.  The “will to forecast” is what makes us human. The “capability to forecast” is not evenly distributed across the human population. For many, forecasts, the methods by which they are produced, the professionals who generate them and the use to which they are ultimately put are misunderstood and misapplied black boxes.

Forecasting will be THE Skill in 2014
We take forecasts, forecasters and forecasting for granted – and we shouldn’t. In 2014 I believe the ability to have meaningful conversations with forecasters with an eye toward creating and applying forecasts will be what separates winners from losers.

Most of us don’t realize that we are surrounded by a large and growing forecast industry. Just about everything in modern life is “forecasted.” There are magazines, trade associations and conferences for forecasters [e.g., The International Journal of Forecasting; the International Institute of Forecasters; The Journal of Applied Forecasting; http://www.journals.elsevier.com/international-journal-of-forecasting/; http://forecasters.org/]. There are surveys of forecasts – some free and very informative [e.g., “Survey of Professional Forecasters 2013” http://goo.gl/NA2Vk4] and some for fee designed for the information needs of specific audiences [Blue Chip Economic Indicators http://goo.gl/g2Eehv]. There does not appear to be the same support ecosystem for those who would use forecasts.

The point I hope to make here is that leaders are going to have to roll up their sleeves and become much more actively engaged in understanding what actually goes on inside the sausage factory which creates the forecasts that materially impact the economic environment we have to work in.

Weather Forecasters – Great People, Impressive Science & a History of Improvement
When most people hear the word forecast, their first thoughts go to weather forecasting. The technologies and techniques fielded to do modern numerical weather prediction are among the most complex and sophisticated in the world. [See: http://www.navmetoccom.navy.mil/].

The great thing about weather forecasts is that – despite anecdotal evidence to the contrary – they are constantly improving. The general rule of thumb regarding forecast accuracy improvement in the weather world is one day per decade. In the last 26 years Naval meteorologists have extended their forecast skill two and a half days. That means a five and a half day forecast now is about as good as a three day forecast 26 years ago. It takes a lot of effort to extend a forecast four or six hours. This path of constant forecast improvement is not happening outside of the weather domain. Weather forecasting is not a precise metaphor for other types of forecasts in that weather forecasts can’t influence the weather whereas forecasts in other domains can materially influence real world outcomes.

Does your organization inventory the forecasts it uses to make key decisions? Does your organization measure the improvement rate of these forecasts? It should.

Forecasting is a complex undertaking in a world of black swans. One could teach a course [and I do] on forecasting gone wrong. Many forget that the consensus intelligence assessment for Korea 15 years ago was, “The next 15 years will witness the transformation of North Korea and resulting elimination of military tensions on the peninsula.”1 There must be a way of doing a better job – “of assigning more explicit, testable, and accurate probabilities to possible futures.”

What are you doing to improve the forecasting ability of your enterprise?

1Michael Horowitz, “How the intelligence community can better see into the future,” Foreign Policy [6 September 2012].