Forecasting, never an activity companies felt particularly confident about, has now become nearly impossible. Processes that once resulted in mildly imperfect visions of the future now produce wildly imperfect ones. "The last 8 to 12 months have created a strong realization among many corporate leaders that whatever planning they may have been doing, they didn't factor in the possibility of the future being dramatically different from the past," says Andrew Blau, co-president of strategy consultancy Global Business Network.
Mark Gottfredson, global head of Bain & Co.'s performance-improvement practice, notes that, "in growth mode, executives can be very focused on their company and their industry. Even if they largely ignore GDP growth or what the government is doing, their forecasts will still be OK." With many once-stable macroeconomic factors now in flux, though, "companies need to look at many more variables," he says, including access to capital, country-specific risks, and structural changes within industries arising from the recession.
