Dickeson--Throw Away the Crystal Ball
Budgeting. Scheduling. Loading. Financial reporting. Estimating. Production standards. Capacity utilization. We're talking about the heart and soul of printing administration. They all rely on a common function: forecasting.
We spend gobs of valuable time and energy predicting the future for those systems. Then we try to operate the business using assumptions we develop from those forecasts.
Want to know a sickening truth? As prognosticators, we're lousy. We're all plain stupid when it comes to making good guesses about what's going to happen. So why do we waste so much time with crystal balls? You tell me.
Am I saying we're all a bunch of crummy managers? No. Not at all. The reason we're not is that we proceed to make our daily—our hourly—decisions by ignoring the assumptions based on those flimsy forecasts most of the time. So why do we spend time and energy consulting a truth fairy to foretell what's going to transpire? You tell me.
No. I'll tell you. We do it because it's "tradition." It would throw thousands of "experts" out of work if we didn't. Where would all the financial advisers, economists, oracles, accountants, planners and wizards find work? Forecasts for the business are mostly dreams—fantasies—and we enjoy dreams more than the harsh realities of every day.
I'll bet you're either in shock at this point or about to heave your copy of this publication into the trash. But you won't because you know that what I'm saying is the truth, and you're fascinated. "How can we survive without our metaphors?" you're asking.
We printers are not an exception. No one can say which direction the ball will bounce. Neither the president, nor the Congress, nor the OMB can forecast the deficit or surplus for a fiscal year. No one can tell you which way the stock market is heading—though pundits abound.
Billions are being bet on communication mergers based on assumptions of which bandwidth media will triumph. Will it be cable, ADSL, wireless from satellite, or something entirely different? All the CIA experts can't begin to tell you the survival probabilities of Fidel, Saddam or Slobodan—our current demons.
Forecasters of the Future
As forecasters of the future, we're all ignorant. For one thing, we haven't yet fully recognized the truth and implications of Chaos Theory. Even though we know that minor shifts in input will provoke major changes in results, we still won't concede its validity. It's too great a shift of prevailing paradigms to swallow readily. Nonetheless, small changes in input are going to happen. They always do.
We need to develop the humility of meteorologists. They forecast weather conditions for only five days ahead. Even so, the fourth and fifth days have lower probability of accuracy than the first two or three. They've learned from years of experience that their predictions beyond five days are worthless. Always those small changes, the variables they couldn't contemplate, screw up the outlook.
Now ask yourself how many days in advance you can predict future behavior of the critical elements of your business. It's different for each item, isn't it? Try doing a sales and expense budget for just next month. Then check it against actual results. Extend the exercise to two months. Then three—for a quarter.
Where's your meteorological "five day" probability? Where should your humility index be pegged? Now tell me what credence or credibility you give a 12-month sales budget. Are you laughing? You should be. Three-year forecasts? Give me a break!
Instead of trying to predict your way through the mists of the future, why not just "project" past experience into the future, using a spreadsheet to give a shape to your fantasy? Or perhaps use the same rolling quarter last year as a benchmark for the upcoming three months? Just something simple. Do anything that gives you a feeling of comfort, if you need it. But don't waste a lot of time doing it.
Don't berate yourself or your associates because your dream didn't pan out. Don't waste their time demanding they play the forecasting games. Don't send job standards (forecasts) to the production floor, or you'll have the troops laughing! If "actual" doesn't equal the "budget" column, it just shows that you can't forecast. (Exactly what I'm saying!) Simplify and concentrate on what's really important for survival of the business.
The most significant business factors are happening outside the business, not inside. The RATE of change outside our print businesses is rapid—bandwidth, the Internet, new analog camera technology (Foveon), customer shopping methods and information resources. It's all-important for survival to keep pace with change—just to react, not proact, by guessing what will happen.
Read the trade/technology journals. Identify the best search engines on the Web to find out what's going on. Talk to your customers and "listen in the cracks" to what they DON'T say, as well as what they do say. All those activities outside the shop walls take time, intense concentration and, most of all, that painful effort called thinking. Precious hours spent in external responsiveness are extremely valuable to the business.
Want to be an entrepreneur in today's exploding economy? Then get real. You are not a stand-in for the Oracle of Delphi. We're all confused, baffled, by what's happening around us—and to us—from the president of the United States down to Joe Average running the corner repro shop.
Figure out the right things to be doing and just do them! Not to worry about forecasts.
—Roger V. Dickeson
About the Author
Roger Dickeson is a printing productivity consultant based in The Woodlands, TX. He can be reached via e-mail at email@example.com or by fax at (281) 419-8213.