When it comes to forecasting one of the biggest challenges is the presence of potential bias. It can lead to inaccurate predictions and poor decision making. At its worst it can render your futures work a complete failure, costing valuable time and money.
During a recent discussion with our expert colleagues at Good Judgement Inc (GJI) we discussed the challenge. GJI’s process of cognitive debiasing represents the industry ‘gold standard’. Their methodology identifies seven main types of bias to watch out for. There are mitigations and tactics in place to defend against them all. De-biasing training can improve forecasting accuracy by between 10-30%.
As future thinkers we need to be especially vigilant. In a study of global businesses by Jonathon Karelse in 2021 the presence of unconscious biases of various types was found to be nearly universal and even more pronounced in forecasters/planners than others playing a part in the system.
Of the seven biases GJI primarily looks out for the three most important can be remembered by simply learning your ABCs:
A. Anchoring – attaching a percentage likelihood to an outcome early on in a project can be damaging to first predictions. Avoiding forecasts of others should be a priority too. Work must begin with the whole spectrum of possibilities open.
B. Base-rate neglect – ignoring the general trend in favour of individual situations is surprisingly common and difficult to avoid. Often it can be ascribed to a ‘one off’ personal experience. Forecasts should always start with an objective external perspective and a reference class.
C. Confidence – the best forecasters not only know what they know, they are vigilant against what they don’t know. As Donald Rumsfeld described it, the “unknown unknowns”. Subject matter experts are particularly prone to overconfidence and have been shown time and again to make poor predictions when compared to the best forecasters.
There are plenty of things your organisation can do to guard against the seven biases and the three highlighted above. Some are specific to a futures project, others require organisational change.
Promoting diversity and inclusion creates a culture that values different perspectives. The UK Civil Service has made important strides in recent years to tackle this pernicious root cause of bias in policy work. There’s plenty more to be getting on with. As futures and forecasting gains ever more importance and awareness across the public sector, its leaders should look forensically at other sources too.