How to improve forecasting

Forecasting is hard, whether it’s about the weather, economic performance, sales volumes, or anything else. This article by Dan Gardner, originally in the RSA Journal, makes some very helpful observations on the psychology of forecasting, and on how to get better at it.

We all have unconscious biases. A lot of people remember the things they forecast correctly, but not the rest – this is called the outcome bias. Looking back with a view that everything that happened could have been predicted is also common – this is the hindsight bias. Wikipedia has this excellent list of cognitive biases.

Hindsight bias makes it very hard for people to compare today with the past reliably. In his article, Dan Gardner talks about the recurrence of people looking gloomily at the present and nostalgically at the past, because the things we were anxious about in the past are so readily forgotten. He writes:

“Dig into the contemporary records of almost any year and you will find people worrying about the future and looking back to more certain times.”

A sensible, practical thing we can all do to improve our forecasting, and address these biases, is to track forecasts and their outcome, and to learn from the good and bad outcomes. This is common in science, but a lot less common in business.

Scientists have discovered …

Scientists have discovered a revolutionary new treatment that makes you live longer. It enhances your memory, makes you more attractive. It keeps you slim and lowers food cravings. It protects you from cancer and dementia. It wards off colds and flu. It lowers your risk of heart attacks and stroke, not to mention diabetes. You’ll even feel happier, less depressed, and less anxious. Are you interested?

Why we sleep

Energy deficits

I’ve been helping to deliver some workshop content to a team on how to identify potential burn-out, assess how good your energy levels are, and plan to optimise them for productive work, but also for a good work-life balance. I discovered there is a word in Japanese “Karōshi” which means to die from overwork, surely a sign of how bad burn-out can become!

Being aware of your own mental and physical state, and spotting early signs of burn-out is key. There are lots of things people can do to address an energy deficit, but of course most of us are constrained in some way by the demands of our work. We can only change what we control, but everybody is able to improve their energy in some way.

The quick fixes of coffee, sugar, alcohol, TV and social media don’t really help. Getting more sleep, taking up a hobby, going for a walk, or stopping for a proper lunch break all make a difference, but what works for you will vary.

Companies that think about this issue and help their staff manage it will get more productivity, more creativity and greater engagement from their staff, so it’s a win-win.