FUTURE STUDIES
FUTURING 61:
MAJOR CONSIDERATIONS IN
FORECASTING PROJECTS
A COURSE FOR
MINNESOTA FUTURISTS
by
Earl C. Joseph, Futurist
1
BASIC PREMISES
No single forecasting methodology
can provide a viable forecast
A forecaster needs to use multiple
forecasting methodologies to obtain
a realistic view of a possible future
Each forecast must be evidencebased
2
A FORECASTING MODEL
Identify what is to be forecasted; ID the purpose
of the forecast and its future range
Do an environmental futures assessment
Do multiple forecasts using different forecasting
methodologies
Combine the forecasts
Assess most likely future
Identify possible & probable alternatives
Monitor and track the emerging future
Revise the forecast as new information is
obtained
3
WHAT IS AN ENVIRONMENTAL
SCANNING AND ASSESSMENT? - 1
Environmental scanning is the
acquisition and use of information about
events, trends, possibilities and
relationships in an organization's external
SEPT and internal SWOT environments
It is useful knowledge for assisting
forecasters and management in planning
an organization's future courses of
action.
It is a number of different processes for
scanning SEPT and SWOT environments.
4
WHAT IS AN ENVIRONMENTAL
SCANNING AND ASSESSMENT? - 2
Organizations scan the environment in
order to understand external and internal
forces of change so that they may
develop effective responses which secure
or improve their position in the future.
They scan in order to avoid surprises,
identify threats and opportunities, gain
competitive advantage, and to improve
long-term and short-term planning.
5
WHAT IS AN ENVIRONMENTAL
SCANNING AND ASSESSMENT? - 3
In one of its issues management forms, the
process involves scanning and evaluation of
environmental emerging impacts from:
Trends and their possible extrapolations
Forces (forces-of-change) operating to alter or
encourage trends
Issues, threats and opportunities, that could
steer trends along new future directions
Breakthroughs that could obsolete past trends
by starting new generation trends.
6
WHAT IS AN ENVIRONMENTAL
SCANNING AND ASSESSMENT? - 4
To the extent that an organization's ability to adapt to its
environment is dependent on knowing and interpreting
the changes that are taking place and anticipated in the
future:
Current environmental change results in reactive
(tactical) planning
Anticipatable future change involves proactive
(strategic) planning
Environmental scanning constitutes a primary mode of
organizational learning.
7
WHAT IS AN ENVIRONMENTAL
SCANNING AND ASSESSMENT? - 5
External environmental assessment impacts
planning as influenced by external factors such as
environmental turbulence, disruptive technology
advances, competitor advances, customer
changing needs, …, and resource dependency.
Internal environmental assessment impacts
planning as influenced by organizational factors
such as the nature of the business (type, mission,
vision), core competencies, management style
(leader or follower), …, and the strategies pursued.
8
SEPT FORECASTING AND
ASSESSMENT - 1
A SEPT (Social, Economic, Political, Technology)
forecasting project is practiced in different forms.
One form involves comparing, contrasting,
analyzing, and synthesizing possible futures from
identifyinedcurrent SEPT conditions versus
anticipated changes for the future under study
The synthesized possible futures are then analyzed
for impacting organizational plans.
9
SEPT FORECASTING AND
ASSESSMENT - 2
Another form of a SEPT forecasting project
involves a matrix wherein the SEPTs are
forecasted in terms of:
Trends, Forces, Issues, and Breakthroughs, or
SWOTS
Usually the matrix columns are the SEPTs and the
rows are the SWOTs or the TFIBs
The SEPTs could be evaluated either as to their
impacts upon the area being forecasted or the
SEPT area.
10
SEPT FORECASTING AND
ASSESSMENT - 3
Septs can also be forecasted relative
to:
Critical Success Factors
Competitive Advantages
Best Practices
Core Competencies
Blindsided Possibilities
Forecasted Impacts
Anticipated Consequences
Recommended Changes
11
DEVELOPING MORE
ALTERNATIVES
Based upon cited evidence develop alternative
forecasts of trends, forces, issues, breakthroughs,
and etc. based upon:
Weak, medium, and strong controlling factors
Multiple “What Ifs”
Continuing change versus disruptive
Radical departure from the past
Backlash from change
Bandwagon effect
Bushwhacked change
12
COMBINING FORECASTS
Multiple forecasts used as inputs to
scenario forecasting
Discussing alternative forecasts based
upon relevant evidence given by
trends, issues, possible forces-ofchange, breakthroughs, etc.
Weighing the forecasts as to their
likelihood as measured by their evidence
versus alternatives
13
MORE FORECASTING PRINCIPLES - 1
The principles of a forecasting project encompass
processes, guidelines, prescriptions, rules,
conditions, action statements, alternatives,
emerging changes and recommendations about
what to do in given situations.
Too often, business and government forecasts
are made without an appreciation for the impact
of or on the overall social, economic, political,
and technological environments.
Most often an erroneous forecast results from a
single issue or use of a single methodology.
End Result: To provide credible planning
information.
14
MORE FORECASTING PRINCIPLES - 2
Most past forecasts erroneously used straight
line extrapolation, whereas:
Trend Shapes
J-Curve
Limit
Down Turn
Up Turn
Life Cycle
Constant
+
-
Step
Bumpy
Cyclic
Breakthru
Bifurcated
Profit-Loss
15
SEPT FORECASTING
16
SWOT FORECASTING
17