Forecasting in a "Black Swan" Economy
In a market defined by volatility, geopolitical shocks, and constant operational disruption, forecasting has become both more important and more difficult. To understand how finance leaders are adapting, Marks Sattin convened a roundtable of senior finance professionals in Manchester - Individuals who are routinely dropped into complex environments and expected to deliver clarity at speed. We brought together leaders from healthcare, manufacturing, and technology sectors—spanning both global organisations and SMEs—each facing very different exposures to disruption, yet united by the challenge of forecasting in an increasingly unpredictable environment.
What emerged was a candid, highly practical discussion about the realities of forecasting today: the tools, the traps, the blind spots, and the future.
1. The fixed budget is dead - and everyone knows it
The group reached unanimous agreement: the traditional annual budget is no longer fit for purpose.
Set in November, obsolete by January — the budget has become a “still photo in a world that moves like a movie.” Participants pointed to events such as the war in Ukraine and Middle East conflicts that instantly rendered their carefully crafted plans meaningless.
The consequence? Finance teams spend months performing a “post mortem” on why the business missed a target that was never realistic in the first place.
The emerging model is clear:
- The budget becomes a high level ambition.
- The rolling forecast - updated quarterly or monthly - becomes the operational reality.
- Decisions, resource allocation, and performance management are anchored to the forecast, not the budget.
2. The infrastructure gap: systems vs. The Excel trap
A striking theme was the gulf between organisations with mature forecasting systems and those still operating "offline".
At one end, mature organisations utilise specialised tools like Workday or Adaptive; at the other, smaller businesses (up to £110m turnover) remain "offline," often struggling to extract even a basic payroll report.
In these less mature environments, Interims described the “Excel Trap”: 40 tab spreadsheets that only the creator understands, riddled with formulas, assumptions, and hidden links. These models become “black boxes” that the wider business cannot interrogate — and often does not trust.
The result is a forecasting process that is slow, opaque, and overly dependent on a single individual.
3. Data Realism: the rise of the 95% rule
One of the most pragmatic insights was the shift toward directional accuracy.
In a volatile market, chasing perfect accuracy is a luxury few can afford. The group advocated for the “95% Rule”: if the forecast is directionally correct, it is good enough to guide decisions.
This mindset is a response to the “Multiple Truths” problem:
- Sales CRM says one thing
- Finance ERP says another
- Operations have their own numbers
4. Stakeholder engagement: from spreadsheet owners to business partners
A powerful theme was the evolving role of finance as a credibility builder
To gain buy in, finance leaders must:
- Get onto the “shop floor”
- Understand operational realities
- Speak the language of the business, not “finance speak”
This is forecasting as leadership — not just arithmetic.
5. AI and the CoPilot Paradox: Automation meets risk
The conversation around AI, particularly Microsoft CoPilot, was nuanced and sceptical.
While AI can automate tasks, participants warned that it is “dangerous” because it will confidently “fill in the blanks incorrectly.” The risk of hallucinations is real — and potentially catastrophic in a financial context.
The consensus was clear:
- AI can accelerate work
- But finance leaders must still understand the underlying “API” of the business
- Without that understanding, they cannot distinguish fact from fiction
6. Scenario Planning: High-resolution for the near term, flexibility beyond
To maintain flexibility, they advocated for a "hybrid" time horizon: creating a high-detail, high-resolution forecast for the immediate 2–3 months, while leaving the remainder of the year more fluid. This allows the organization to build the "mental muscle memory" needed to pivot quickly when the global "movie" takes an unexpected turn.
Conclusion: Forecasting as a strategic muscle
The roundtable made one thing clear: forecasting is no longer a technical exercise. It is a strategic capability that blends data, judgement, communication, and adaptability.
Interim finance leaders are uniquely positioned to drive this evolution. They enter businesses with fresh eyes, challenge legacy thinking, and implement practical solutions that work in the real world.
As markets continue to shift, the organisations that thrive will be those that:
- Abandon rigid annual cycles
- Invest in system maturity
- Embrace directional accuracy
- Build trust through transparency
- Use AI intelligently
- Treat scenario planning as a living discipline
Come along to our next event!
The Marks Sattin Interim Network is more than a contact list. It’s a trusted space to share insights, navigate challenges, exchange opportunities, and connect with peers who understand the realities of interim life. Join the community today.
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