Place Your Bets - Part 1

I never thought I would get paid to place bets. But that's what I do for a living.

OK, so I'm actually a demand planner. But I've learned to place good bets. I had to. And in a multi-million dollar business the stakes are pretty high.

You may not think of forecasting as betting, but there are many similarities.

I have to bet on a certain quantity of an item being sold in a given period, with limited information. And I have to do this consistently. Sounds a lot like gambling to me.

It’s also a process of ongoing learning. I get better with experience. I also have to be honest about my decision biases, and how to compensate for them. For example, I tend to be pretty aggressive in betting on new items, and for the most part this works in my favor. But I also get burned sometimes. And I adjust.

Here’s why looking at forecasting as betting is useful: It forces me to accept that there is uncertainty in what I am doing, and in looking at ways of reducing this uncertainty as much as possible. It leads to such questions as:

·       What data am I missing?

·       Am I interpreting the data I have correctly?

·       Am I missing an important perspective on the business?

·       Is there someone who has additional information that I could use?

·       Am I tied closely enough with my customers and their expectations?

Acting on these questions allows me to learn how to make better bets, despite the uncertainty in forecasting.

But they are still bets in an uncertain environment. And that’s OK. As long as I am improving in my ability to manage the uncertainty that I know is always present.