Renzo Bartoloni

Only few managers would be able to contribute effectively to the creation of company value, especially those who not only click quickly but think quickly as well.

N. 001       FEBRUARY 2017

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The importance of being a future teller.

Society, enterprise and the education system, suffer from a lack of reliable points of reference like never before in the short history of post-industrial era. The first visible effect is a growing lack of confidence and a decrease of investments.

 

Before, boards were not considered as primary for the preparatory activities of business development, such as market analysis and market segmentation.

The reason why is straightforward: it is too hard to answer the question “which way do we have to look for business development? Towards which market, which country, which customer?”

 

In January 2016, Zygmunt Bauman passed away. We owe, to this great sociologist and philosopher, the concept of Liquid Society: a society in continuous motion, in which it is very hard to set forecast.

In the preface of one of my books from some years ago, Creative Marketing, I quoted the sociologist Enrico Finzi, who presented the metaphor of the swimmer: “…transition is like a swim from a lonely shore … to a new shore, different then the first one … maybe the future will be nothing else than the sea … permanent uncertainty, changes upon changes, mobile and continuous adjustment...”

That metaphor described, in 1994, a prophetic vision that is proven true today.

We are still swimming towards an invisible shore, maybe hidden behind the horizon.

 

Despite the changes, companies need to develop strategies and plans that contemplate new trends in the markets and, above all, strategies that take into consideration the new habits and dreams of the customer.

 

Before, forecasts  were always considered a too unsafe and dangerous land for  managers.

Usually, corporations including banks and funds, prefer to choose investment based on data and facts from the past in order to design linear trend projections.

The reason behind this behavior was entirely comprehensible: in case of failure, the management could not be charged as guilty. The decision of the type of investment was not based on a future forecast, which can be considered to be better suited for a fortune teller but on solid data and facts from consultants.

 

What kinds of processes were used in the past for real forecasts?

In the past decades, common practice was to project actual trends based on the ratio of correction: quite always an increase, rarely a decrease.

The size of the adjustment ratio was the focus of the forecast process: internal factors such as the company resources, the investments and the actual sale figures,  were evaluated first. The changes in progress regarding technology, social structure, and habits of customers were evaluated in a second moment and were considered external factors.

In addition, big multinational industrial groups and some governments began to investigate the reports of mega trends provided by experts who analyzed the news available in the world.

At that time, changes were rather slow, scenarios could be considered steady and  long term strategic plan were spread on periods of 10-20 years.

 

Today a triennial plan is considered “long term” and forecasting ability is considered a crucial asset for competitive advantage.

But would the absolute ability in data capture be enough for a manager to bring competitive advantage to his company?

Definitively not.

The endless mass of available data is insufficient in discovering reliable, new trends. This requires other skills, which can descend from cultural knowledge, including social and humanistic sciences.

 

As a result, potentially any manager can access the same informations, but the outcomes in term of reliable forecasting, will not be the same.

Only few managers would be able to contribute effectively to the creation of  company value, especially those who not only click quickly, but think quickly as well.

 

I recommend, to contemporary managers, a useful practical approach the mix of art and science represented by forecasting:,

Try to organize in a file the changes perceived in the last year, 2016. Then evaluate  each one, its size, its duration and its by-products. Don’t limit the practice to your domestic market but spread your imagination worldwide: that is our new domestic market. Contemporary managers must act as an unaware swimmer on the  way to reach a not yet visible shore.

E.I : Changes in the job market

  • several employers, even at the same time, for the same employee.
  • frequent turn over for employers and employees; the same employee could play various role for various employers.
  • more often, work take place outside the office, such as home, co-working centers, trains, airplanes, beach …
  • working hours are now more flexible than ever before and new collaborative methods (conference calls, web groups etc) are as common as offices.
  • business relations are now a web extended all over the world. Different time zones can make any hour of the day and night suitable for business.
  • decision making processes are becoming less vertical and more horizontal, they are based on project responsibility more than chain of command. The authorisations of the boss are already substituted by the passwords for the systems.
  • To sail and stay afloat inside a company, is no longer a virtue. Without evidence of quick results, seafarers and floaters will be banished in the port.

 

 

If you are interested in the matter, go ahead yourself and add new issues. You are on the way to become a forecast analyst.

 

 

 

 

February 2017

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