A recent article in the Financial Times got my attention because it seemed to pit scenario planning against forecasting as tools for the enterprise to prepare for the future. The best part about using prediction markets for forecasting guidance is that forecasting and scenario planning don’t have to be mutually exclusive strategic approaches.

From the article:

Imagine a future in which everyone got by on just three hours’ sleep a night; or in which employers were required to hire equal numbers of men and women for every type of job; or in which a technological meltdown persuaded millions to quit their cities in favour of rural self-sufficiency. Now imagine what each of these unlikely scenarios might mean for your business.

Such thinking might seem woolly but an increasing number of organisations are trying similar exercises as they struggle to make predictions in turbulent times. The practice of “scenario-building” (or “scenario-planning”) can, say its advocates, inform both long-term strategy and present-day decisions but most importantly it can equip senior managers with a mode of thinking that will help them deal more effectively with the unexpected.

I don’t disagree with the impact scenario planning can have, but it’s impact can be refined and strengthened when paired with prediction markets. Imagine if you could get your organization to undertake the exercise of scenario planning by presenting each of the scenarios as questions in a market. The market would offer insight into which of the scenarios are likeliest to have a real-world impact on your business rather than just serving as an exercise in creative thinking or outside-the-box forecasting.

Instead of having to consider the meaning of a seemingly random assortment of scenarios designed to provide outside-the-box thinking–those presented in the example from the article, for instance–imagine if you could know that your employees actually expected one of them to mean something important, for instance if impending legislation made organizational gender equity more relevant than a productivity pill.

If you’re engaged in scenario planning, make sure you’re identifying scenarios worth planning for. Prediction markets aren’t just forecasting; they’re collective forecasting. Let your organization help you know what to expect, with Consensus Point’s Foresight.

Recently I found an application which both offers a very elegant interface as well as a different way of approaching forecasting. ~Shaun Snapp

Aw shucks, Shaun. You’re making us blush.

Shaun Snapp of Forecast Systems just put together a positive review of our Foresight prediction markets platform interface. This is especially flattering, considering that he wrote recently about the difficulty of designing good forecasting interfaces.

We stack up well against the competition in part because of the power of prediction markets to refine collective forecasting:

Consensus Point not only brings a very appealing interface, but brings the collaborative concept. Unlike SAP DP, where collaboration is more of an afterthought, Consensus Point is actually designed around collaboration. The software is different from other product based forecasting systems I have had exposure to and that should not be surprising as in its heritage is from financial trading rather than from statistics. The software is backed up by academic work in the field of predictive markets.

Thanks, Shaun, for taking a look at Foresight. If you’ve read Shaun’s review, need an enterprise forecasting solution, and want to learn how to leverage collaboration through software, you might want to contact us.