1st Edition
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.
Introduction
New Definitions
The Difference Matters: Chance and Uncertainty
The Content to Come
The Less-Is-More Approach
Citing Precedent
Acknowledgments
Predicting
Introduction
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
Additional Readings
Five Fatal Flaws of Predicting
Introduction
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
Additional Readings
Forecasting
Introduction
Forecasting’s Foundations
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
Additional Readings
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
Assigning Weight
How to Assemble the Forecast
From Weather to Whether
From Forecasts to Strategies
Expecting Multiple Outcomes
Creating the Future from the Forecast
Strategic Planning
Strategy versus Tactics
The Time Dimensions of Strategy and Tactics
Basics of a Strategic Plan
Conclusion
Additional Readings
Postscript: Big Data
Index
Biography
Dr. Bauer is an internationally recognized health futurist and medical economist. As an independent industry thought leader, he forecasts the evolution of health care and develops practical approaches to improving the medical sector of the American economy. He is widely known for his specific proposals to create efficient, effective health care through multi-stakeholder partnerships and other initiatives focused in the private sector.
Dr. Bauer has more than 275 publications on health care delivery. His latest books are a 25th anniversary update of his best seller, Not What the Doctor Ordered: Liberating Caregivers and Empowering Consumers for Successful Health Reform (2019), Paradox and Imperatives in Health Care: Redirecting Reform for Efficiency and Effectiveness (2015), and Upgrading Leadership’s Crystal Ball: Five Reasons Why Forecasting Must Replace Predicting and How to Make the Strategic Change in Business and Public Policy (2014). Previous books include Statistical Analysis for Health Care Decision-Makers (CRC Press, 2009) and Telemedicine and the Reinvention of Health Care: The Seventh Revolution in Medicine (McGraw-Hill, 1999).
As a consultant, he has assisted hundreds of provider, purchaser, and payer organizations with strategic planning and performance improvement initiatives. He served as Vice President for Health Care Forecasting and Strategy for ACS, a Xerox Company, from 1999 to 2010. His own consulting firm, The Bauer Group, specialized in consumer-focused strategic planning and clinical affiliation agreements for multi-hospital networks from 1984 to 1992.
In addition, Dr. Bauer was a full-time teacher and administrator at the University of Colorado Health Sciences Center in Denver from 1973 to 1984, where he held appointments as associate professor and Assistant Chancellor for Planning and Program Development. He also served for four years as Health Policy Adviser to Colorado Governor Richard D. Lamm. From 1992 to 1999, Dr. Bauer was a visiting professor in Administrative Medicine at the Medical School of the University of Wisconsin-Madison.
He received his Ph.D. in economics from the University of Colorado-Boulder. He graduated from Colorado College in Colorado Springs with a B.A. in economics and completed a certificate in political studies at the University of Paris (France). During his academic career, he was a Boettcher Scholar, a Ford Foundation Independent Scholar, a Fulbright Scholar (Switzerland), and a Kellogg Foundation National Fellow. He is an honorary Fellow in the American Academy of Nurse Practitioners. Dr. Bauer lives in Madison, Wisconsin, where he spends his spare time painting (conceptual art in acrylics) and playing the viola da gamba (precursor to the cello). He is an active member of the Board of Directors of the Madison Symphony Orchestra.
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
