Budgets and Projections in an Uncertain World: Dancing in a Storm

All we really know is the past but all that really matters is the future. Traditionally, the controller's job focuses more on looking backwards while the CFO looks to the future to drive the organization forward--two different perspectives. Leaders depend on us to present a cogent and reasonably accurate forecast in order to make sound decisions. Whether we call our plans budgets, projections, forecasts or business plans, we are trying to predict the future without a magic crystal ball, tarot cards or a Ouija board. We will discuss ways to help make the best estimates we can, but there is one thing we know: We will be wrong! The good news is that the ability to predict is not a mysterious gift bestowed at birth. It is the product of specific ways of thinking, of gathering information, of updating beliefs. We can all learn to be better at predicting by studying these ways of thinking. We will also examine the rapidly changing world we live in and how our organizations and how lessons from our collective past can help us find opportunities and adapt to our ever-changing environment. We all make predictions in our personal and professional lives. We base our decisions to marry, buy a house, launch a new product or hire staff on expectations about the future. How can we use best practices and current research to improve our ability to predict the future?