Back in October 2002, the National Intelligence Council issued its official opinion that Iraq possessed chemical and biological weapons and was actively producing more weapons of mass destruction. Of course, that judgment proved colossally wrong. Shaken by its intelligence failure, the $50 billion bureaucracy set out to determine how it could do better in the future, realizing that the process might reveal glaring organizational deficiencies.
In order to change an organizational culture like this, and improve the culture for the future, various things can be tried in order to try and achieve a Superforecasting capability or 'Predictive Edge'.
Find the Sweet Spot
The sweet spot that companies should focus on is forecasts for which some data, logic, and analysis can be used but seasoned judgment and careful questioning also play key roles.
Train for Good Judgment
Training in reasoning and debiasing can reliably strengthen a firm's forecasting competence. The Good Judgment Project demonstrated that as little as one hour of training improved forecasting accuracy by about 14% over the course of a year.
Learn the basics
Lay a foundation of forecasting basics.
Understand cognitive biases
Cognitive biases are widely known to skew judgment, and some have particularly pernicious effects on forecasting. They lead people to follow the crowd, to look for information that confirms their views, and to strive to prove just how right they are. It's a tall order to debias human judgment.
Build the Right Kind of Teams
Assembling forecasters into teams is an effective way to improve forecasts.
Diverging, evaluating, and converging
Whether a team is making a forecast about a single event (such as the likelihood of a U.S. recession two years from now) or making recurring predictions (such as the risk each year of recession in an array of countries), a successful team needs to manage three phases well: a diverging phase, in which the issue, assumptions, and approaches to finding an answer are explored from multiple angles; an evaluating phase, which includes time for productive disagreement; and a converging phase, when the team settles on a prediction. In each of these phases, learning and progress are fastest when questions are focused and feedback is frequent.
