Planning is preparation of the mind.

It’s impossible to quantify every variable, every assumption, and every potential future state.

Attempting to do so will simply boil the ocean and frustrate everybody around you.

Analytics leaders tend to be very specific types of folk.

Here are a few heuristics that might be useful for us in particular.


Backcasting is primarily an expression of preferences. The exercise almost always begins with an enunciation of a preferred, desirable, future state.

Consider the following statement:

“By 2016, we will be a 1 billion dollar company.”

Such a statement, be it vision statements, stretch goals, or just goals, are typically not based on any sort of forecast. It’s entirely possible, and very likely, that an enunciation of preferences has nothing to do with expectations.

Setting a North Star is extraordinarily important. It isn’t the only component of leadership, but it is a major component.

And it sometimes the case that people confuse preferences with expectations.

In North American management cultures, the tension between high expectations and higher preferences causes tremendous heat. Failing to hit expectations is a big cause of corporate sunspots – we get these huge eruptions of energy when they aren’t hit.

A backcast statement shouldn’t be used as fuel. It can be used as gravity to hold the whole plan together.


A backcast involves a teasing out of assumptions about what must be true about that preferred, future, state. What else must be true to be a 1 billion dollar company?

What do revenues need to be?

What does the multiplier need to be?

How many competitors need to be bought out?

What’s the total size of the market?

Backcasting surfaces a number of salient variables that may not be regularly captured over a regular train of thought.

Will the market merge in with another?

How far will our revenue per head fall as we grow?

How will technical debt limit our ability to expand into a new market?

And it’s from those truths that you can start to work backwards.

What has to be true in 2015?

What has to be true in 2014?

The strategic gradually falls back into the tactical. And, that’s when we begin to get into the forecasting exercise.


There are a number of statements about a current state that a group of reasonable people can make.

It’s usually during the forecasting stage that all the reasons why the preferred future can’t happen come to light.

For instance, if the backcast calls for a 20% Compound Annual Growth Rate (CAGR), what are all the things in the way of a 20% CAGR?

Forecasting, with respect to which variables are salient, tends to be rooted in how the organization thinks in past in particular, and in the present in general. Of course, you’re only going to have historical data that’s relevant to the way the firm thought in the past, right? Most firms only expend resources counting what counts, not necessarily what they predicted would be salient in the future.

Those salient variables will illuminate what isn’t true right today.

And, more importantly, what has to become true at some point in the future for our preferred future to happen.

Planning for the Unexpected

It is certain that unexpected events, not incorporated into forecasts or into backcasts, happen.

Which is why, over the course of talking about forecasts and backcasts, alternate scenarios should be surfaced and discussed.

“Suppose that competitor #3 buys competitor #5.”

“The odds of that happening are less than 1 in 100.”

“Suppose 1 in 100 happened.”

“Can we talk about a 1 sigma event instead?”

“Not yet. Let’s do this one first.”

“Well, that would be mean X, Y and Z. And we’d be exposed on feature D.”

“So would we immediately increase development on feature D?”

“Probably not. Because we’d have a bigger issue with competitor #1 trying to expand the whole product in that instance.”

“What would be the best response?”

“We’d focus on acquiring customer J, K, M, and N. That would really stop their growth.”

It isn’t really the point that competitor #3 won’t ever buy competitor #5. It isn’t the point that nobody expects it. It’s the surfacing of values and thought process that happens as you get to know how other people think – in particular, how they believe their expectations match their preferences.

Why The Thought Counts

Thought counts because it exposes additional strategic pivots that may not have been captured over the course of regular salience discovery.

Why are some product features salient in some scenarios, and why aren’t they in others? And, understanding why a group of individuals believes what they believe, helps quite a bit in adjusting and responding to the unexpected.

It’s the learning that goes into these discussions that helps shape how leadership will respond to the unexpected.

In the instance of talking about competitors #3 and #5, the relative weighting of feature D is surfaced. A comprehensive logic tree isn’t required at that point. The point is not to boil the ocean, it’s to gain an understanding so that the organization can respond nimbly.


Fundamentally, people have to trust each other enough to express their preferences for the future. They have to trust each other enough to express real expectations. They have to be able to express both fear and greed. And, they have to be open to being really wrong.

Otherwise, there is no real preparation of the mind, and you might as well go back to barking spreadsheets at one another.


Planning is the preparation of the mind.

The minds of analytics professionals can be systematic to the point of missing opportunity. Thankfully, more opportunity can be discovered systematically by applying some systematic thinking.