Management – One More Unpredictable Forecasting Variable

William Perry

William Perry

It is bad enough that consumer behavior is never 100 percent predictable, but the unpredictable behavior of management also compounds forecasting errors.  Over the years I have relived the following situation so much that it has almost become a predictable behavior.

Once a month, among my many forecasts, I submit a 30/60/90 day outlook for the upcoming period.  If the forecast shows the hotel performing below our annual budget, the boss visits each sales manager and demands they not lose a single sale and suddenly everything is open for negotiation.  Then after the 30 days pass, our numbers actually come in much higher than forecasted.  Conversely, if I submit a forecast that shows the operation performing better than budget, the boss is on the golf course, sales people leave half an hour early everyday, and everyone sits back waiting for the money to come rolling in.  After these 30 days pass, our actual sales numbers come in close to budget or a little less.  In both situations, I get grief and am told I don’t know how to forecast.  However, the one variable that is continuously changing is the behavior of the boss based on my original forecast.

For a number of years I repeated this pattern getting mentally bruised without fully understanding how management behavior was influencing my forecasting accuracy.  Last March, when I returned to Hilton, I had a conversation with my boss explaining how his behavior was a variable in my forecast and encouraged him to be as consistent as possible in his management style.  In other words, after explaining the cycle described above, the light went on and he understands how is role can influence the forecast.

While my margin of error is still in the 1-3 percent range, at least his behavior is one less variable of concern.  Forecasters that have emotional managers, influenced by the numbers, should recognize this behavior and encourage a dialog to help managers understand how their behavior may be influencing the actual results versus the forecast.

William Perry, Jr.
Director of Revenue Management


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October 12-14, 2009
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9 Responses to Management – One More Unpredictable Forecasting Variable

  1. Understanding how all the stake holders in the equation work with one another is a feat in itself. Managing those expectations in a forecasters roll is more than a challange… Any advise on this topic.

  2. Totally agree. I have seen the same thing in technology sales especially when it comes to the weekly Pipeline Calls and sensitive transitions of prospects from C to B to A to “what happened” – why did we lose that deal?
    Steve Sussman

  3. Thanks for putting this link out there, and to William for writing it. This situation also comes up in a Product Marketing “features vs cost vs sales” discussion. I’m glad in William’s case the issue was able to be resolved fairly easily and well; unfortunately, not all managers understand their own effects, even after explanation.
    Clayton Berry

  4. Liked and recognized the fun to read story. I don’t know the leisure business but an error margin of 1-3 percent sounds appealing to me and almost like fixed orders.

    Posted by Rob Snijders

  5. Must be tough to deal with the changing styles of a manager. I have found that the more fair and consistent I am the better results I get out of my team. Good luck with your situation.

    Posted by James Crawford

  6. Alternatively, have the forecast always be below budget. That will produce actuals consistently over forecast.
    Len Porochnia

  7. William,

    Thanks for your presentation and discussion at the Better Management webcast yesterday. I grabbed some great key points and tweeted them away. I have never heard or thought of emotional intelligence before and you piqued my interest. I will have to check it out.

    I agree with you that businesses must be agile, have contingency plans and have all disciplines on the same page to survive in this economy. Lastly, I thought your points on using effective communication and relationship building to lessen the blow of relaying difficult information was spot on. As you say, numbers are logical but can also have an emotional impact.

    For those who missed the webcast, you can view it on demand here:

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