Prior to the pandemic, I had been advising a business on forecasting their projected revenue based on their sales pipeline. This involved meticulously reviewing their leads to determine both the size of the potential sale and the likelihood the sale would close in order to calculate the expected value of each lead, then turning these into a weighted average that could serve as a more accurate and reliable forecast of projected revenue.
After the pandemic hit, I went back to them to ask if they had made adjustments to the forecasts I’d helped them create. They hadn’t. “There’s too much uncertainty,” they said. “Because we don’t have any idea of what’s going to happen, we figured we’d just wait until things settle down and we have more information before updating our forecasts.”
In other words, even though they understood the value of making these kinds of forecasts, and using expected values to improve the accuracy of their revenue projections, they were so overwhelmed by uncertainty that they didn’t want to even attempt updating their plans for the future.
This client was hardly the only company thinking this way. As Marker’s Rob Walker pointed out in a recent piece, “Rather than offer a new outlook, many [companies] have withdrawn from projections altogether — conceding, in effect, ‘We have absolutely no idea what’s going to happen; your guess is as good as ours.’”
There is no such thing as “not deciding.” Choosing not to decide, or to “wait and see,” is a decision in itself.
Businesses are stuck facing difficult strategic decisions about how to best survive the pandemic and position themselves to participate in the recovery: Should you be conserving cash, or burning it to acquire or retain customers for the future? Should you be laying off employees, furloughing them, or reducing compensation — or using the slack in the labor market to go on a hiring spree, like Instacart? If your business has been shuttered, when will it be safe to reopen?