Backasting

Posted on Posted in Analytics Strategy, Business, Design Thinking, Strategic Analytics

Backcasting is a fantastic technique. It was invented in Canada. You’re welcome to use it.

If it sounds like forecasting – well – that’s because it’s kind of like forecasting. With an important difference.

That wikipedia page says:

Whereas forecasting is predicting the future (unknown) values of the dependent variables based on known values of the independent variable, backcasting can be considered the prediction of the unknown values of the independent variables that might have existed to explain the known values of the dependent variable.

I had to re-read it a few times to really get it. Once you get it, it’s just elegant. What’s beautiful is that it can silence the reactive-pure-statistician brain long enough for the prospective centre of the creative brain to imagine several futures.

What I like about backcasting is that you imagine future states and work your ways backwards through time, into the present. This helps break the head out of the narrowness of identifying a present trend and extrapolating it out into the future.

Having knowledge of the present trend is important when weighing choices among alternatives, when one is validating the paths forward. So trend analysis is still important. Moreover, it helps you to identify indicators that a given strategy is working or things to watch to see if a strategy is working, and to identify other factors that your historical data might be missing. Even better, it enables one to prospect on  environmental factors that may cause something to happen to the strategy.

Having knowledge about what your collaborators, and yourself, want in a future state is also important. If there’s going to be misalignment about what to do in a given situation, it’s best to have it discussed out in a planning session long before it happens. And that’s what planning is after all: preparation of the mind.

There’s also something about backcasting as search.

One of the things I picked up in public policy was how the public service searches for alternatives. In response to a problem, Canadian policy makers will look at Britain, the United States, New Zealand, and Australia. Which makes sense because they have similar legal frameworks and societies. If they don’t find something they like, they’ll look at France, Germany, Japan, Singapore, and The Netherlands. And so on, searching outwards for something to imitate. Imitation is often way cheaper than innovation in many contexts.

One of the things I picked up in marketing science was how a consumer searches for a solution. In response to a problem, they’ll need to look a lot of things, in order to figure out what they don’t want. And then they’ll start to understand what they really want.

If you’re backcasting with people you trust, you can engage in a search across future preference states. These can be hashed out. You can engage in a search outwards looking for models to imitate. You can also discover futures you don’t want. More importantly, it may induce innovation. It may generate the social permission in a room to contemplate solutions and options that aren’t cut from existing cloth.

I’ve had very good experiences in backcasting – the most recent one this Friday. I’ve had a few misfires.

If you decide to try it out for yourself, consider:

  • Try it out for yourself, on yourself, first;
  • Invite folks you trust and can plan with;
  • Keep an open mind and feel free to reverse yourself.

It’s a great technique if you’re heading into some difficult planning sessions.

Give it a try.