It’s not uncommon to see business blogs about forecasting this time of year. However, it is typical that “forecasting” means money—budgeting for next year or maybe doing some workforce planning, which is still about money, at least in part. Of course that is really important stuff; but all too often business owners and leaders are so caught up in what is on their plate, what they HAVE to do, that they don’t make time to look at the bigger picture; forecasting the entire organization itself.
Yes, the whole thing at once.
I know, what does that even mean? While it sounds confusing and time intensive, it isn’t; and if you follow these steps to complete the process I’m confident you won’t feel I’ve wasted your time at the end.
Before you get started, I will go ahead and point out that the first four steps in this five step process are about looking back in time. This may sound strange as a method of forecasting, but trust me. Besides, while I won’t go into the statistics, because I want you to keep reading, it is highly unlikely that my favorite Irish toast, Confucius, Obi-Wan Kenobi and Sir Laurence Olivier are all wrong about this theory.
So grab a pen!
Step 1: Reminisce
“Look back to where you have been, for a clue to where you are going”
~Buddhist proverb
No need to dust off the photo albums or break out any mix tapes, but sit somewhere quiet and think about how and why your business began. What were the circumstances that led to you to take the leap and start, purchase or take over your organization? What did you want to achieve and why? How did you picture the business would be today? This process shouldn’t take more than ten minutes; no need to overthink it. Once you’ve recalled what ground zero looked and felt like and your brain has captured what your expectations and hopes were, make a few notes and let’s move to step two.
Step 2: Where You’ve Been, the Canvas
“Study the past if you would define the future.”
~Confucius
The next step is to highlight some historical data about the company’s early stages. To illustrate where we’re going with this, think about how lifetime achievement awards are presented on awards shows. Typically when a recipient is introduced, the presenter provides a summary of the person’s historical achievements, notable challenges and triumphs that shaped their career along the way. You’ll need to create that speech for your business, and to capture the relevant points in your own timeline we have to start at the beginning.
No need to capture dates or all the minute details… just get a high level sense of these topics to capture a relevant baseline:
- What were your original products or services?
- How were they marketed and to whom?
- Who were your customers or clients and employees?
- What internal and external brand did you start with or strive to create?
- What were your purpose, mission, vision or core values?
- What have you experienced in terms of growth and profitability over time?
- What about your culture? Have you built the workplace culture and internal brand you dreamed of?
- Anything else you think is important that hasn’t been referenced here?
Step 3: Where You’ve Been, The Picture
“Many of the truths that we cling to depend on our point of view.”
~Obi-Wan Kenobi
Once you have captured your baseline data, use it to ferret out those historical moments that have led to what your business looks like today.
For each topic or data point in the bulleted list, identify impactful changes between the early days and now. What events or variables led to those changes? Don’t try to capture everything; the big ones will probably jump right out at you and those are most important. You’ll certainly be able to pick out some real challenges and hardships as well as some proud moments and stellar achievements.
That’s your business timeline.
You don’t need dates or even figures down to the decimal point; but capture these landmark events in order. Voila! You have just painted a picture of your organization through 2015.
Step 4: Compare and Contrast, the Critic
“Almost every wise saying has an opposite one, no less wise, to balance it.”
~Sir Laurence Olivier in “the Jazz Singer”
Step four simply entails comparing what you came up with while reminiscing at the beginning of the exercise to the painted picture you completed in Step 3. How do you feel about comparing these two? What have you accomplished that you are really proud of? That you got off track with? That have been forgotten or scrapped and changed completely? This analysis gives you the “street cred” to take on the final step—the forecast.
Step 5: Forecast, the Next Great Work
“May you have the hindsight to know where you have been, the foresight to know
where you are going, and the insight to know when you have gone too far.”
~Irish Toast
You’re almost done; hang in there! Forecasting your organization for 2016 and beyond starts with simply considering what you’ve learned in the earlier steps and looking ahead.
Where do you want to be this time next year? Or three years from now?
You probably already knew what some of that draft looked like before the earlier steps in this process, but it’s pretty likely the process gave you some new perspective on how to prioritize that list. Maybe you’ve realized some areas you hadn’t already thought of could use some extra focus. Or maybe you were laser accurate already; that’s okay. You have actionable intel to support your forecast assumptions and added confidence in the direction you’ve set.
So what will your painted picture look like for 2016? Once you’ve used your analysis to identify some key areas of focus, use the wisdom of your experiences and events in the timeline to create a forecast for next year. Whether forecasting extra resources next year to focus on an area that’s wobbled off track or need “all hands on deck” to capitalize on a smashing success while timing is still in it’s prime, your forecast will be much more valuable and accurate if you look backwards first. And there’s a bonus! Not only can you forecast accurately after completing these steps, but you’ve got a pretty healthy head start on some actionable business goals for next year, too!