Failure to Read This Forecasting Issue Portends a Route to Failure
OK, maybe my headline is a little strong and has a hint of hyperbole, but that’s what I get paid to do: Pull you in and then deliver.
I generally hate editorials where I tell you what’s in this issue. It’s often an editor’s lazy way of faking an editorial column.
So I won’t, but I will tell you what prompted my boisterous headline.
A front page story in The Wall Street Journal in August explained that Walgreen's fired two top executives from its Medicare-related business for messing up a forecast (http://on.wsj.com/1npoZeS). Seems that someone was off by a billion dollars. That’s sure to raise a few eyebrows, but more important it raised the hackles of investors, and that, in the public company world, is a distinct no-no. According to The Wall Street Journal, “The bottom line: Walgreen hadn't factored in, among other things, a spike in the price of some generic drugs that it sells as part of annual contracts.”
If my example smacks more of a sledgehammer approach, it was my attempt to get your attention, because all puns and slick words aside, it IS an important business practice.
It would seem that in today’s interconnected world with our instant access to information, we have a plethora of choices when it comes to predicting and hoping for a future outcome. Not making some forecasting attempts for the coming year ranges from mildly foolhardy to downright dangerous.
I read The Wall Street Journal story at Westmont Bagel, Haddon Township, N.J., (www.westmontbagel.com) and then a few weeks later I had a chat with wholesaler Bob Engel. Bob didn’t quite call it forecasting, but he confessed that the decision to open his most recent branch was a result of suggestions made by Alan Beaulieu, HARDI’s economist.
Voila, I thought. Theory and supposition put into practice.
We’ve run the gamut of opinions, views and commentary in this issue. I won’t relist what’s in the table of contents (p. 3). But we have ranged from the macro to the micro. Take your pick.
My modest advice is to reaffirm what you are doing or should be doing: some measure of forecasting. Certainly the best starting point I can think of is Alan Beaulieu and ITR. I’m a self-confessed fan of Alan, but beyond the charm and superior speaking abilities, he’s really good at what he does. You’ll find more as part of the HARDI connection at http://bit.ly/1zc8o3n.
And I do have one other small suggestion. If you’re in an adventurous mood, try looking at some different piece of forecasting that you might not have examined in the past. It could be the government’s forecast (even if you find the current economic leadership repugnant) or any source that you believe is reliable. Sometimes that different viewpoint is just what we’re seeking.
In the end, however, it is still a forecast. And some would say, even if the seer has a Nobel Prize in economics, he (or she) can be dead wrong. But it’s still worth the roll.
In addition to the plethora of forecasting topics in this issue, I want to raise an important point that readers shouldn’t overlook.
To many of us, planning is fun because it allows us to be intellectually creative. And, if you have even a minor comfort level with numbers, there's the joy of playing the "what if" scenario. The reality is that forecasting isn’t tangible until you actually move product.
That’s why the corollary to forecasting and strategic planning might be that the most “real” element of the process is product. HARDI’s annual conference (Dec. 6 to 9) always highlights the Conference Booth Program. That’s where all the manufacturers get to showcase their new products. I remember a former HARDI president telling me how he prepared for the Conference Booth Program by huddling with his buyers to determine what they might need.
The best part? Just like browsing for a book, you might find a product or company that’s plain gold, even if you didn’t plan on it. HARDI scheduled it for Tuesday, Dec. 8, from 2:15 to 5:30 p.m. For a list of Who’s Who among manufacturers, visit http://bit.ly/1ESEH6S. I’ll be there, so be sure to wave and say “hi” and keep looking for those products that just might help steer that strategic plan into steady shores.