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Prediction

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Managers make decisions and decisions are predictions. Thus, as has been said already, management is prediction. It is the central function of management and virtually all management activity involves predictions of some sort. Some may wish to argue this, but I believe a little thought will make it obvious to the reader. In any case, the purpose of this book is to act as a guide. Some may wish to get into the discussions more properly placed in the philosophy of science, but, while such discussions may be interesting, they are not for this book. The purpose of this book is to teach some basic concepts and tools that can greatly increase the incidence of good predictions.

Surprisingly, prediction is not typically taught in schools of business, nor are the considerations and tools needed to make better prediction widely known. Most people can progress through graduate schools, obtaining their Ph.D. or MBA and never encounter a course in logic, theory of knowledge or the like. Fortunately many such tools exist and the business of prediction is also the central business of science and much is known about how to go about it.

While scientific knowing is but one system of knowing and not necessarily ‘true’ or ‘valid’ it is useful and much can be done using the predictions science has provided. Some of the predictions are so commonplace as to seemingly disappear. For example when one drives across the Golden Gate Bridge, one is predicting that it won’t collapse and fall into the sea. Airplane rides are attempted with the prediction (sometimes unfortunately wrong) that the airliner won’t plummet to the earth. Else why would drive over the bridge of fly on the plane?

These commonplace predictions are based on a myriad of other predictions of a scientific or technological nature that are close enough to being right that potential disaster is averted. For example a scientific principle of flight is attributed to Bernoulli and his principle is used to design wings that will lift airplanes off of the ground. Likewise the tensile strength of the steel in San Francisco’s bridge is predicted to be able to hold the load. In fact in the anniversary celebration of the opening of the bridge, there was concern that as the tremendous load of people entered the bridge and the span flattened out, that no one had ever made the predictions necessary to be assured that the bridge could hold the weight and the city may have been courting disaster. Fortunately the bridge held up.

The predictions made on the job are usually a lot less obvious and in most cases managers may not even be aware of the fact that they are making predictions. For example, much of management time is spent reacting to events. Some problem takes place and it’s management’s job to fix it. Some process of assessment is done and then a ‘corrective action plan’ is put into place. So where’s the prediction.

The plan is the prediction. The plan is developed in the hope if carried out in the proper way, some desirable result will occur that will eliminate the problem, solve it, or whatever. That plan is picked (one would hope) as being the one most likely to bring about the desired outcome. Is it? How would one know? More importantly, what can be done to assure that more and more of those predictions do result in the desired outcome?


1 Response to “Prediction”

  1. 1 Basic Principles of Using Data at Statistical & Scientific Thinking

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