Upgrading Leadership's Crystal Ball Five Reasons Why Forecasting Must Replace Predicting and How to Make the Strategic Change in Business and Public Policy
Clearly, concisely, and with many examples from public and private enterprise, Upgrading Leadership’s Crystal Ball shows why predictions are usually wrong and presents a better way to look at the future—forecasting. This book is essential-reading for anyone who needs to make the best possible strategic decisions for moving an organization forward in today’s rapidly changing environment.
Dr. Bauer supplies an insightful comparison of the two mainstream approaches for looking ahead. Although predicting and forecasting are usually used as synonyms for a single process, they are conceptually and methodologically quite different. He explains why everyday failure to operationalize these differences robs us of power to envision and pursue good futures, especially when we are headed in the wrong direction.
Readers will learn the real-world value of distinguishing between predicting (extrapolating historical trends) and forecasting (estimating the probabilities of possibilities). Following a description of predictive modeling and a discussion of five reasons why it fails so often in current applications, Dr. Bauer explains the superiority of forecasting and how to do it.
To complete readers’ understanding of the many compelling reasons for making the shift from predicting to forecasting, Upgrading Leadership’s Crystal Ball presents a practical approach to strategic planning in unpredictable times. It concludes with an analysis of the future of big data and its likely impact on the future.
Dr. Bauer is uniquely qualified to write this important book; he is trained in both predicting (economics) and forecasting (meteorology). Author of more than 250 publications, he is internationally recognized not only for long-term success in foretelling the future of medical science and health care, but also for successful innovations to create a better delivery system. This book distills the lessons garnered over his 40 year career as economist and futurist into a guide that other leaders can use to avoid problems and create better options in any realm.
The book includes a foreword by Dr. Stan Gryskiewicz, author of Positive Turbulence.
The Difference Matters: Chance and Uncertainty
The Content to Come
The Less-Is-More Approach
The Emblematic Crystal Ball
Scientific Foundations of Predicting and Modeling
Appropriate Uses of Predicting
Statistical Foundations of Predicting
Econometrics and Modeling
The Growth of Modeling
Univariate Predictive Models
Multivariate Predictive Models
Five Fatal Flaws of Predicting
1. Discontinuities in System Dynamics
Trending Toward Disorder
2. Violations of Model Assumptions
3. Deficiencies of Available Data
Validity and Reliability
4. Failures of Previous Predictions
5. Diversions from Strategic Innovation
From Predicting to Forecasting the Weather
Identifying Explanatory Variables
Specifying the Model
Measuring the Explanatory Variables
Analyzing Variations over Time
Assembling the Forecast
Interpreting a Forecast
What Makes a Good Forecaster?
Incorporating the Role of Climate Change
Expecting the Unexpected
Forecasting in Dynamic Systems
How to Identify Explanatory Variables
How to Specify the Model
How to Measure the Explanatory Variables
How to Analyze Variations over Time
How to Assemble the Forecast
From Weather to Whether
From Forecasts to Strategies
Expecting Multiple Outcomes
Creating the Future from the Forecast
Strategy versus Tactics
The Time Dimensions of Strategy and Tactics
Basics of a Strategic Plan
Postscript: Big Data
Jeff Bauer’s new book positively crackles with energy and brio, whether he’s busting a myth or sharing an anecdote about WWII meteorology. Like any truly learned teacher, his message is simple and accessible: predictions give us the illusion of precision and trap us in the duality of Right and (mostly) Wrong. A forecast, by contrast, illuminates a garden of likely outcomes; it stirs our creativity and poises us for action.
—Tim Ogilvie, CEO, Peer Insight and co-author of Designing for Growth