4 Qs - Decrease Precision to Increase Accuracy

Quintessential Thought

We’re in a series about how to improve forecasting for agility. Our first newsletter addressed balances in agile forecasting. Now, we turn to the first of four core practices that will help you put it into practice. Last week, we explored the first of four core practices: re-forecasting.

Our next practice is this: Decrease precision to increase accuracy.

The more precise and detailed our forecasts are, the less likely they are to be accurate. For example, if I forecast that something will happen on June 17th at 3:25 US Eastern, I have 60 seconds to be correct, which will be hard in an unpredictable environment. If I predict it will happen on June 17th, I have 24 hours. If I predict it will happen in June, I have 30 days.

When you decrease the precision and detail of forecasts, you open up space for learning and adaptation. That’s agility.

Across the three typical elements of forecasts, it could look like this:

• Schedule - Forecast schedules in larger time blocks: months, quarters, or time ranges rather than days or weeks.

• Budget - Forecast budgets at a higher level: team(s) rather than individual projects.

• Scope - Forecast with less detail: focus on outcomes instead of outputs or activities. Also, use relative estimation, t-shirt sizing, and the Fibonacci sequence to reduce the detail in estimates.

All of these are dimmer switches you can adjust based on the situation. Perhaps there’s a reason you need a more precise schedule (like a Sprint Goal for 2-weeks); try pairing it with an outcome-oriented scope (like a Sprint Goal).

While decreasing precision can improve accuracy, over-simplification can lead to a lack of insight and learning. It's crucial to find the right balance or each situation so you can adapt AND learn.

Quotes

“Less is more.” — Ludwig Mies van der Rohe

"Make things as simple as possible, but not simpler." — Albert Einstein

"Predictions are difficult, especially about the future." — Niels Bohr

Quick Step

When have you seen reduced forecasting precision increase learning and adaptability?

Question

For an upcoming forecast, run an experiment to adjust the precision of one of the 3 forecasting elements.

Professional Product Discovery and Validation, Jan 24

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