Why Forecasts Fail. What to Do Instead Harvard Case Solution & Analysis

In 2006, the global economy was on the rise, in part, on the background of a triple innovation investment. Then, suddenly, the boom ended. What fascinates the authors is that almost no one saw, in 2008, the economic crisis will come. In this article, the authors come to terms with the reality that the economy and business, can not be accurately forecast. Therefore, they say, managers need to develop a different relationship in the future. The key is not to develop a clear plan, based on projections, but have contingency plans for various features. The main thing is to stop believing your predictions about the future and to develop plans that are sensitive to surprises, whether they are the future of the credit crunch, or other unforeseen events. The authors acknowledge that forecasters have given excellent service over many years, the practical and academic. But forecasting models are not tuned to cope with the fact that they call the "big hairy coconut" unexpected events that are a fact of life in the real world of business. To compensate, they offer what they call the "three A's": accept, assess and multiply. First, managers need to recognize that they operate in an uncertain world, and second, they need to evaluate their level of uncertainty.;, Third, they have to increase the range of uncertainty for risk compensation "Hide
on Spyros Makridakis, Robin M. Hogarth, Anil Gaba Source: MIT Sloan Management Review 10 pages. Publication Date: January 1, 2010. Prod. #: SMR343-PDF-ENG

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