Category Archives: Reports


Forecast meetings are interesting animals. They are basically meetings where you compare what you think the numbers are going to be, with what you want the numbers to be. Over time I have had the opportunity to attend many different types of forecast meetings. Sales, Revenue, Cost, Delivery, all types of forecast meetings. I have found that there are basically two types of forces competing for supremacy at a forecast meeting: The volumetric force, which is the force working to drive the numbers toward what they are wanted to be, and the accuracy force, which is the force driving the numbers toward what they have a higher probability of being.

The volumetric force is the desire by business leadership to see forecasted numbers that are either meeting or exceeding the business plans for that particular aspect of the business, regardless of whether they are or not. This means that for example, if it is a sales forecast in question, the desire is to see the annual sales target for business to be divided by twelve (coincidentally the number of months in a year) and to see the sales forecast incremented upwards by one twelfth the annual sales target each month, which is coincidentally the usual frequency of the sales forecasting meeting.

The accuracy force is the desire by business leadership to see forecasted numbers that are relatively reliable, and have a relatively high probability of actually becoming reality. An example here would be if the average interval between order and revenue was six weeks, and the orders target was achieved with eight weeks remaining in the quarter, there is a reasonably high expectation that the revenue forecast should also be reliably achieved.

Sometimes these forces work in concert. This is where the volume of the forecast and the accuracy of the forecast are both close to, or ahead of the desired targets. This can mean that sales are above target, or costs are below target, or both. This is also where there is a very high probability of the business sales or cost performance coming in at or very close to the forecasted numbers.

In business vernacular, times when the volume and the accuracy of the forecasts are both on target are usually known as “rarefied air”. They don’t align this way very often. When they do it seems to be a foregone conclusion that either the volume or accuracy targets for the next forecast will be changed significantly.

Once the volume and accuracy targets for the forecast have been modified to the point where one or both of the variables are now in question, the business process can now be considered back in normal state equilibrium, or more accurately in the normal state of disequilibrium.

One of the primary topics of forecasts are the numbers. It is usually a good rule of thumb that if there is anything but numbers in a forecast meeting, then somebody is trying to distract somebody else’s attention from the numbers. Given the opportunity, there is a reasonably high probability that those responsible for presenting the forecast will try to add in extraneous information of some type, if their forecasted numbers do not meet or exceed their assigned targets.

Both a strength and a weakness of the forecasting process is the periodicity with which it occurs. Regular forecasts enable the business to prepare for and adapt to the forecasted changes and values that are projected. If forecasting meetings are held too often, there is not enough time for new events to occur and the forecast to change. This results in wasted effort and repeated information.

On the other hand, if they are held too infrequently, it can mean that events have occurred during the forecast interval that must now be responded to in a far shorter time. It can also mean that the results of the last forecasting meeting can be forgotten or obscured. This can result in a loss of directionality as to how the forecast is either progressing or regressing. One of the main benefits of the forecasting process is to get an understanding of which direction the specific piece of the business is moving.

This results in the potential need for at least some incremental information to be included in the forecast. Again, think numbers. The most useful of which is the comparison of the current forecast to the desired target numbers. That provides a snapshot of what the predicted versus the desired performance will be. The next useful piece of information will be the comparison of the last forecast to the current forecast. This information provides a directionality to the snapshot. Is the forecast getting better, worse or staying the same with respect to the targets?

Adding much information beyond the targets and the previous forecast can cause the information in the forecast to become somewhat garbled or confusing. I have seen forecasts where the information was compared to multiple previous forecasts, or the forecast from the same period a year earlier. This one I am not sure I understand, unless you are looking for some sort of a longer-range piece of information regarding how things have changed, or not, over a year.

To me the salient point is always to know how things are progressing towards this year’s targets. Knowing what last year’s forecast was for the same time period can be a little bit like knowing what the weather was forecasted to be for the same day, a year ago. It might be interesting to know, but it has little to do with whether or not you will need an umbrella or not tomorrow.

The purpose of forecasts is to alert you to the state of the business with as much lead warning as is possible. Do those presenting the forecast indicate that things are getting better? Are they getting worse? It takes time for changes to produce the desired effects in a business. The more time that you have to make them, the greater the effect that they can have. Does the forecast indicate that any changes are required at all?

This is where the volumetric forecasting force can work against the business. As stated, this force is the desire to forecast increasing performance, that is at or near the desired targets. But what happens if either the market conditions, or business performance are such that the actual forecast is indicating that the numbers are moving away from the desired targets?

If you actually forecast this type of event, the known decline of performance and missing of a target, you are inviting what is known as “management assistance”. This type of assistance usually comes in the form of even more forecasting meetings where the opportunity to explain what is going on is made available, that is until the forecasts improve in line with desired results.

So, what happens?

A general rule of thumb is that once a forecast is created, it cannot get worse. They can either improve, or stay the same, but having a forecast that is moving away from the target will cause much consternation. As we all know, business is a continually changing environment and set of events. Very little in business can or should stay the same. Accurate forecasts should reflect the constantly changing environment.

If you see a forecast, of any type, that is not changing with time, then you know it is getting worse.

The advantage to this situation is that management is not being directly told that things are getting worse, so they have plausible deniability to their senior management, and the business performers are not having to spend incremental time explaining what has occurred, and what they are doing to correct it. They can just get on with correcting the performance and trying to improve the forecast.

However, this approach will only work for a while. Eventually even management will have to recognize that they are being shown the same information over a prolonged period of time and they will be forced to question it. Once this type of questioning on the relative believability of the forecast begins, there is little that can be done to stop it. This is where plausible deniability ends.

As process has continued to expand its role within business, forecasting has also become the forecasting process. This usually means that instead of just having the person or team closest to, or responsible for the specific set of numbers for that specific period enter them into the forecast, they must now put them on a form where they are then routed to many other people and teams who are either only tangentially or wholly unrelated to the numbers, can then approve them before they are actually entered into what will become the forecast.

Forecasting is a critical aspect of a successful business. The ability to accurately predict present and future performance enables business groups and disciplines to take the most effective actions to benefit the business. Understanding how forecasts are put together, and being able to accurately interpret the numbers they contain are key capabilities for the business leader to learn.

It is also critical for the business leader to be able to interpret the information that the forecast contains that may not be specifically numeric in nature.

The Color of Information

What did we do before we had color printers? I can remember when color printers first started to make their appearances in the office. They were big. They were expensive. They were only supposed to be used for specific documents. They were aggressively guarded by the administrative assistants that had responsibility for them and they couldn’t be used without special permission. That is obviously no longer the case. Color printer sizes and prices have come down to the point where the old black and white only printers are now a thing of the past. Color is so ubiquitous on both our screens and our printing that we appear to have become fully dependent on color to convey our information. While I do utilize color in my documents and presentations, I can’t help but feel that many managers may have now become so dependent on the color code of information that they may no longer feel the requirement to understand the actual underlying values of the information.

It seems that what was once provided to management as data is now provided as colors. Instead of quantifying a performance issue, we are now providing a “traffic light” condition sound bite. It is now condition “red” for issues and adverse situations, condition “yellow” for potential problems, and situations where there are no imminent threats – condition “green”. I understand the need to distill down information to make it more manageable, but I don’t think you can properly run a business based on the colors of a traffic light. I am concerned that we are now into the same thirteen second sound bite mentality for managing our businesses as we are in when we watch the 5:00 news on television.

This “just give me the high points” three-color approach to management has a tendency to indicate to the team that the desire of management is not to get too deeply engaged in the issues of the business. It appears that management is becoming interested only in the performance of the business, not in how the business is running. If the team feels that management doesn’t want to be too deeply engaged in the business, it will not be long before that sentiment is reflected throughout the team as well.

Some of my first experiences in management were working for an executive who was extremely knowledgeable about the businesses that he had responsibility for. As such, he demanded that his management team know at least as much, if not more about the business than he did, if they were to be value add to both the business and management chain. As such these businesses were relatively well run and profitable. An in depth understanding of the issues, data, finances and how the business worked was required in order to maintain the high level of performance of the business.

With a “three-color” approach to management, leaders are communicating that they in fact do not want to know as much about the business as the management team and all that they are really interested in is “stop”, “go” and “caution” status of the business. Where in the past it was required that the management team have a greater in depth knowledge of the business than the knowledgeable leadership team to provide value add to the business, the three-color management approach now calls into question the value add of an unknowledgeable leadership to the business.

It is a long leap from the proliferation of color printers and presentations to indicting business leadership for seemingly removing themselves from the detail associated with the running a business and its management process. I have stated in the past that metrics, be it tabulated data or color codes, only point you in the direction of the issues and more importantly point you in the direction of the potential solutions. Three-color metrics would seem to only point you at the issue without the value add of any direction toward a potential solution. As an example, with all the other inputs that are required to drive a car, a successful trip anywhere would be doubtful if traffic lights were your only source of information.

I guess I am still of the old school that good business leadership requires a leader that is well versed and knowledgeable about the business they are leading. A good leader needs to understand not only the performance of the business, but how the business works. To extend the traffic light – automobile analogy a little further, a leader may not need to know how the car works in order to drive it, but a leader will definitely need to know how it works if they are ever going to be called on to fix it.

Report by Exception


Have you ever attended an operations review or a monthly review meeting and at the end of it wondered why you were there? As competition continues to grow fiercer, and we are asked to provide more capabilities with fewer resources, we still seem to find the time for review meetings. Whether we are calling the review, or just attending the review we need to be much more aware of one of our most precious business resources, our time.

Limitations to our travel budgets as a result of increased cost consciousness have reduced the number of face to face reviews. In response to this we have seen the significant growth in the number of conference calls with associated NetMeeting or LiveMeeting visual or chart content. The value of the review can still be there, but the cost has been reduced.

As we look at other ways to continue to drive the cost out of the business and efficiency into it, we should start looking at both the content and the needs associated with the review itself.

If the business is on track and performance is within acceptable control boundaries, is a review even necessary? If only part of the business is off plan, does the entire business need to present? Are there other scheduled shorter interval reports that are in place designed to track performance that can be used?

The numbers of people and the associated man-hours spent at reviews are significant, but they are just the tip of the iceberg. The number people and associated man-hours spent preparing for and generating the information and presentations associated with the reviews are enormous.

We need to be rigorous in asking ourselves if each activity we are performing is providing value to the business. If our businesses are on plan, will standard interval activity and financial reports be sufficient? I would think they should be. How much time can be saved and returned to the actual running of the business if just one operations review can be avoided in a business year?

Please do not misunderstand me. I believe in the value of reviews, when they are called for, and have a defined and focused objective. We need to evolve the standard general review away from the usual progress report to management for the entire business, and transform it into a session designed to generate solutions to performance issues for those aspects of the business that are in fact off plan.

Controls and reports within the business should enable issues with performance, or deviations from the plan to be made visible before the review. The purpose of the review then changes from everyone reporting their issues, or lack of issues to reporting on the solution to the issue. Those aspects of the business that are not experiencing issues should not then be required to expend the resources on the creation of review materials. It becomes exception reporting instead of general reporting.

The result should be a shorter meeting with fewer presentations, and a greater focus on the exceptions to expected performance and the solutions to issues instead of the reporting of them. The time and effort that usually is expended on the preparation for the review can be reduced and the time returned to the business for greater value activities.

Survey Says…..

I got another survey today. That’s not too unusual. We all seem to be getting them more frequently.  We get them from various political entities, consumer product manufacturers, software application manufactures and just about anybody that you have bought something from that requires some sort of product registration. We get them at the office from our various suppliers and vendors, other groups from within our own organization that provide us support or a service and even our own companies will periodically survey the employees for their opinions. In short, we seem to be asking each other a lot of questions.


We need to remember this the next time we have the urge to send out a survey to anybody. If we want to survey our customers, understand that they are also customers of other companies who also want to send out surveys. If we want to send out a survey, we need to have a very clear set of goals for both the survey itself and the use of the information we are to gather. Like anything else in the organization, we need to have a very clear set of objectives for a survey for it to be of any use. We also need to demonstrate to the surveyed entity that we will do something with the information we gather that will be beneficial to them.


What is it that we want to know (that we don’t already know). Why do we want to know it. What are we going to do with it after we know it.


Too many times I have been surveyed, and then never heard another word from the surveyor. I answered the questions but in return got no value for my time. My information went somewhere, but no outward manifestation of a response was provided. Eventually I have gotten to the point where I respond to fewer and fewer surveys. Maybe that is why I seem to be getting more and more of them.


Too many times surveys become isolated onetime events where a great deal of attention seems to be showered on the entity being surveyed, and then just as quickly disappears with no specific results communicated or acted upon. If the surveyed entity recognizes that characteristic, then the survey becomes just another time consuming event for them, with no recognized or expected value.


Surveys will only have value if the surveyed entity believes that there will in fact be action taken that is hopefully beneficial to them as a result of the survey.


If you are going to survey the employees of your business (again), explain to them what the results were of the last employee survey, and what actions were taken as a result of their previous input. If you are going to survey your customers, explain what actions were taken as a result of the last survey, or if it is the first time the customer is being surveyed, explain what you have found from other customers surveys and what actions you took as a result of that information. Without this closure of the feedback loop before each new survey, and the demonstration of a response to the input, all the survey becomes is an academic fact finding activity that provided the respondent no value.


Surveys need to quantifiably provide some sort of meaningful value to those people who respond to them. That may be  why we now see so many market survey requests accompanied by some sort of product discount or payment offer. If the surveying entity isn’t going to somehow remunerate me for both my time and opinions associated with their survey, I am not going to waste my time by answering it.

I think the same is true for both employee and customer surveys. If you are not, or cannot demonstrate to the surveyed entity that you place a high enough value on their opinion to act upon it by changing your business or method of interaction with them, then it will be very difficult to get them to respond in any meaningful way, if at all.


Business relationships with customers and employees are the result of ongoing dialogs and activities. It seems that too often we take this daily interaction and feedback for granted and want to rely on the survey for our management answers. It also appears that all too often our customers and employees provide us daily feedback and opinions that we do not act upon in a timely manner. We then survey them for information, but neglect to close the loop back with them to verify what we “heard” and then explain what we did as a result of this information, even if we did take measurable action.


When no feedback is provided or visible action is taken as a result of a survey, each successive survey increasingly loses its value. The willingness of the surveyed entity, be it a customer or an employee, to respond goes down and eventually all value associated with the survey is lost. You then become just another survey amongst the numerous surveys that we all seem to get, and don’t bother to respond to.

A Tree in The Forest

I am sure as children we have all heard the parable “If a tree falls in the forest and there is no one there to hear it, does it make a sound?” No matter how you answered the question, the rejoinder was “How do you know for sure?”

The business equivalent of this parable is “If you work very hard all month, and you do not generate a monthly report of your activities, did you really do any work?” The answer to this one is a little bit simpler. If you did not document your progress and activities then in reality you didn’t do any work. If you want to argue this point, my rejoinder will be “How will management know for sure?”

I have heard many reasons and excuses for not generating a monthly report. It takes too much time. I didn’t have a great month so I don’t want to document so little progress. I had a great month so I don’t want to seam self aggrandizing. The bottom line is that there is no excuse for not generating a monthly report.

They don’t take a lot of time. If they do, you’re probably doing them wrong. Some monthly reports may be stronger than others. That is the nature of business. The fact is that a brief 1-2 page monthly report is your opportunity to capture the value that you and your team brought to the company. Businesses are focused on generated value. If you are not showing and documenting your value, how can they know what value you are to them?