SWTCH by Pigment
Three days of predictions, insights, and advice from leaders in finance, sales, HR, supply chain and more
Register now here
SWTCH by Pigment
Three days of predictions, insights, and advice from leaders in finance, sales, HR, supply chain and more
Register now here
By Timo Wienefoet, Principal at Kainos
The gold rush is a defining part of Silicon Valley. The gold of today is data, and many solutions are rushed to the world market from a small radius around Princeton University. On the other side of the Bay lies the University of California, Berkeley, a place of the Liberal Arts in contrast to the technology-driven Princeton. Philip Tetlock taught at the former and provides a profound empirical and people-driven view on forecasting. His book “Superforecasting, the Art and Science of Prediction” is of paramount utility to every FP&A department and to every decision maker.
The Executive Summary
The empirical work done by “The Good Judgement Project” is financed by the IARPA, the Intelligence Advanced Research Projects Activity. It showed that
The Future is Unpredictable
It is impossible to run a correct cause and effect analysis for an event that has happened in the past. It is therefore also impossible to map a distinct route to a favourable outcome in the future. Despite today’s knowledge and processing power, academic hypotheses about the future have become ever less secure. The focus must be on people, and their abilities to establish emergent strategies with small adjustments in short time frames. This leads to supreme results and makes a strong argument for going beyond budgeting with rolling forecasts.
The Mediocracy of the Expert Opinion
Analysis of how experts forecast in their field revealed mediocracy at its best. Simple to understand messages and consistent views get more air time than differentiated interpretations loaded with doubt and restraints. Therefore, Philip devoted a complete section of his book on the role of the CEO, and how forecasting skills help him nonetheless. The findings go well with “Built to Last”, Jim Collins’ empirical analysis of what makes and keeps corporations superior in performance. This chapter is a strong argument for the strategic-minded CFO that works as a team with his CEO.
The 11 Commandments of Supreme Forecasting
The Superforecasters were assessed according to Brier scores. As stated above, a certain mindset combined with a resolute feedback environment led to extraordinary results. Philip came up with 11 methodical commandments that can be followed to attain supreme forecasting skills:
Finally, a Forecast
The Good Judgement Project is trademarked and it offers good services to businesses. Although Berkeley and Princeton may have different academic focuses, they are both part of the Valley and its rush for Cash. So let me forecast with 90% confidence that you buy that book within the next 3 days.
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