One of my favorite quotes (I don’t even know if it’s true) is supposedly from Jack Welch and it is about how he got rid of his forecasting department:
We might be surprised, but we won’t be surprised we’re surprised
Businesses are often surprised by changes to the environment, even while they tout their ability to master the situation. One company I used to work with had a joint venture with CISCO in the dot.com era – at the time CISCO was touting their advanced financial capabilities, their ability to close the books a few days after quarter end, and most importantly their supply chain mastery that allowed them to accurately forecast demand. Almost immediately after that period of boasting, CISCO had a big inventory write down since they built too far ahead of demand and had to scrap the unsold goods and materials.