Forecasting in Uncertainty

by Amr Ismail

When I forecast, I am always aware that some views expressed in my writing can be very unsettling to some people, but I let facts and numbers speak for themselves; I am merely forecasting and connecting all the dots.

A good forecast is unbiased, which is the key word here. And the role of the forecaster is looking at how hidden currents in the present signal possible changes in direction for companies, societies, or the world at large. So, the primary goal is to identify a full range of possibilities, to map uncertainty, because our actions in the present do influence the future, uncertainty is opportunity.

Predictions may not have logic, but forecast must have a logic to it. The forecaster must be able to articulate and defend that logic. My reader understands enough of the forecast process and logic to make an independent assessment of its quality by looking at opportunities and risks. I expect participation and critique from whoever reads me.

And just as a good forecast is unbiased, the reader should also be unbiased and able to distinguish between a good forecast and bad one. In a world of uncertainty, a good decision maker falls back on intuition and judgement. The forecast helps your understanding by revealing overlooked possibilities and by informing your intuition. Human nature being what it is, it’s only natural that many are likely to overreact to an unexpected set of assumptions

Change hardly unfolds in a straight line, and it is gradual, slow sometimes, but then it accelerates and can suddenly explodes. So, a good forecaster can understand when a moment is ripe for an inflection point and can avoid overestimating the short term and underestimating the long term. When the inflection point arrives, people generally underestimate the speed of change. And for a good forecaster, timing is imperative.

People commonly shy away from failures and anomalies, they dislike uncertainty and they are preoccupied with the present, they tend to ignore signs and indicators that don’t fit into their comfort zones or familiar boxes. Anew won’t fit into an existing box no matter what.

Forecasting has a lot of navigation to it, like steering a ship. A good forecaster also knows when not to forecast. For example, I forecasted global economic growth for 2019, and not this year, because my evidence-based analysis indicated possible extraordinary events in 2020 and I decided against making one.

So, what can be unsettling about some of the analysis presented in any of my forecasts?

– Shifts that are historic or that may not have a precedent
– A complex change environment that is described as being unforecastable

That’s a lot for many people to digest. I get that. And it is difficult for many people to envision how they will organize their lives around it. I get that too.

I can easily understand fear of change in a company or organization change management program, so I can imagine a higher level of fear and insecurity when we discuss life-changing events.

Unbiased forecast is commonly a hard pill to swallow, so it’s always up to you to figure out how to be an unbiased participant, start by:

Understanding that real leaders and innovators have no fear,

Asking the right questions,

Making an effort to get the big picture in everything you do,

Not ignoring facts in favor of personal opinions, it’s mentally draining,

Staying positive and curious about change,

Accepting that happy talk is good but straight shooting is better.

You can’t see the future by looking in your rear-view mirror.