On a recent episode of Freakonomics titled “How to be Less Terrible at Predicting the Future,” psychology professor Philip Tetlock observed that the people who are supposed to be best at making forecasts often aren’t.
Tetlock conducted a giant multi-year experiment on the accuracy of political forecasts by experts. He concluded that “the experts think they know more than they do.” Basically, they were only slightly better than random guessing.
Sales Operations Leaders might be nodding their heads at this point. They understand the importance of forecasts better than most, and they also know just how difficult it can be.
Mistakes in forecasting can have big consequences for the sales organization. Sales Forecasts play a key role in determining and aligning territories and quotas, and those in turn, factor strongly in how the sales compensation plan is designed. If the forecast is inaccurate, the sales team is demoralized and the executives are disappointed. The Sales Operation Leader carries this burden, and it can be a heavy one.
Fortunately, there are ways to improve your sales forecasting results and become what Tetlock calls a “super-forecaster.” The biggest barrier to accurate forecasting, Tetlock discovered, is dogmatism. He describes this as “an unwillingness to change one’s mind in a reasonably timely way in response to new evidence.”
Evidence isn’t the problem. Good sales management software provides plenty of real-time data about leads and opportunities, customer behavior, market dynamics, and sales team behaviors. All that information is valuable, but not if the cost of implementing it is too great.
Those “expert” forecasters have access to a lot of information too, but it’s only useful if they’re prepared to adjust their forecasts as new information appears. Quite simply, adjusting forecasts means more work. For Sales Operations Leaders, it comes down to the tools they have at their disposal. Specifically, tools that make the work easier.
Flexibility and responsiveness are only possible if the available software permits Sales Operations Leaders to make fine adjustments with speed and ease. To see how your sales organization can avoid dogmatism and become more data sensitive, book an Obero SPM demo.