Forecasting techniques

There are several methods of forecasting, but in this blog post, we will explore three popular techniques: cones of plausibility, horizon scanning, and back scanning. We will examine the differences between them and explain when each method is most effective.

Cones of Plausibility

The Cones of Plausibility is a tool for visualizing the range of potential outcomes for a given scenario. This technique involves drawing a cone-shaped diagram with the base representing the present, and the tip representing a possible future outcome. The cone’s sides represent the range of possibilities between the present and the future outcome, with the widest part of the cone at the base.

The cone’s width depends on the number of factors influencing the outcome, the level of uncertainty, and the degree of control the organization has over the variables. The technique is useful for exploring different scenarios and assessing the plausibility of each. It helps organizations to prepare for a range of possible outcomes and plan accordingly.

Horizon Scanning

Horizon scanning is a method of systematically gathering information about potential future events that could impact an organization’s goals. This technique involves scanning the external environment for emerging trends, opportunities, and threats. It helps organizations to identify changes in customer needs, technological advancements, and industry trends that could impact their business.

The process of horizon scanning involves monitoring various sources of information, including industry reports, news, academic literature, and social media. The information is then analyzed, and potential future scenarios are developed. The technique is useful for identifying emerging trends and proactively preparing for future changes.

Back Scanning

Back scanning, also known as hindsight analysis, is a technique for learning from past events and using that knowledge to inform future decisions. This technique involves reviewing historical data to identify patterns and trends that could impact future outcomes. Back scanning helps organizations to learn from past successes and failures, identify gaps in their knowledge, and make informed decisions for the future.

The process of back scanning involves analyzing historical data and identifying key events that led to specific outcomes. The events are then evaluated, and the lessons learned are applied to future decisions. The technique is useful for identifying trends, evaluating the effectiveness of past decisions, and improving future decision-making processes.

Cones of plausibility, horizon scanning, and back scanning are three popular forecasting techniques used by organizations to prepare for the future. While all three methods share some similarities, each technique serves a unique purpose. The Cones of Plausibility is useful for exploring different scenarios and assessing their plausibility. Horizon scanning helps organizations to identify emerging trends and prepare for future changes, while back scanning helps organizations to learn from past events and improve future decision-making processes. By understanding the differences between these techniques, organizations can choose the most appropriate method for their needs and prepare for a range of possible futures.