Here’s what I think this Bob Morrell guy is saying. Consider the following:
- FACT: Nobody likes preparing forecasts.
- FACT: Forecasting takes a lot of time and energy.
- FACT: Time and energy spent forecasting is time not spent selling.
- FACT: Forecasts are almost always wrong.
- FACT: Decisions based on faulty forecasting are flawed.
Of course, I realize why management and the finance group wants forecasts. They’ve got to report to the investors, and they’ve got to make plans for the future, and decide where and how to spend.
But even if that desire is perfectly understandable, in most cases, the forecast often bears little or no reality to what will really happen and (often as not) simply reflects what management wants to hear.
That’s how you end up with these insane forecasts where everything is supposed to close right before the end of the quarter — and then a profit-murdering, last-minute discounting party in order to try to make the forecast come true.
With all of this in mind, here’s my question:
Loading ...UPDATE 9/18: This post is continued in the post “Forecasting Can Be a Waste of Time“. I also discussed this issue in the post “Why the Sales Forecast Stinks.”
