Are you struggling with motivating your sales people to invest the effort required to create accurate forecasts?  We reached into our archives to unearth a creative way that you can put the competitive sales spirit to work for the benefit of your S&OP process — and have fun along the way too.  Devised by Dr. Kenneth Kahn, professor of marketing and director of the da Vinci Center for Innovation at Virginia Commonwealth University, Forecasting Golf brings the fun of golf into the forecasting process, motivating team members to elevate their “game”.

The game’s goal is for an individual player to score the lowest forecast error for the year. A year-long round consists of 12 monthly “holes” that are scored during each forecasting cycle. Attractive prizes are awarded at the end of the game to those who have achieved the lowest scores (i.e., the most accurate forecasts) to reward participation and focus attention on the importance of minimizing forecast error.

Dr. Kahn stresses the benefits of translating statistical language into more understandable form. For instance, a forecast error of 15% does not readily convey if this error acceptable or not. However, when the same forecast is referred to as “par,” then everyone in the company including other department and management levels can readily interpret that error as being acceptable.

Monthly groupings of sales people into scrambles can further enhance the game by offering someone not doing very well year-to-date the chance to still win, and thus, stimulate players to continue their participation in the monthly forecasting effort.

Rules of the Game

True to the game of golf, Dr. Kahn uses the terms eagle, birdie, par and bogey to describe the possible scores for each hole or forecast period.  The terms describe a forecast’s proximity to actual sales where eagle is extremely close, if not perfect, birdie is very close, par is within an acceptable region of error and bogey is beyond an acceptable region of error.

The baseline forecasts provided by the forecaster serve as par and are typically based on a weighted mean absolute percent error (MAPE). The baseline is distributed to the sales force for adjustment wherein each sales person can accept the statistical forecast or make an adjustment up or down. A player could hold par simply by agreeing to the baseline. The benefit of this is 1) it forces a player to think twice about making adjustments, and 2) it builds credibility for the planner as he/she becomes the focal point of the forecasting process. Ultimately, a sales person should only adjust the baseline forecast if they can improve the number rather than out of a desire to create excess inventory or sandbag for the sake of quota.

The following is the scoring methodology. You can change the particulars to suit your company’s goals.

• Eagle = a score of one. Defined as a weighted MAPE of less than 2.5% and less than the given baseline forecast.
• Birdie = a score of two. Defined as a weighted MAPE of more than 2.5% but less than the given baseline forecast.
• Birdie = a score of three. This is defined as within 5% of the given baseline forecast’s weighted MAPE.
• Bogey = a score of four. This is defined as greater than 5% of the given baseline forecast’s weighted MAPE and less than 10% of the given baseline forecast’s weighted MAPE.
• Double Bogey = a score of five.  This is defined as greater than 10% of the given baseline forecast’s weighted MAPE and less than 20% of the given baseline forecast’s weighted MAPE.
• Triple Bogey = a score of five.  This is defined as greater than 20% of the given baseline forecast’s weighted MAPE.

Yearly awards can be given to the lowest overall score as well as second place, third place and honorable mentions. Forecasting Golf can also include “closest-to-the-pin” during the year (i.e., the person who had the lowest weighted MAPE for a month over the course of the year.)

Extra game components you may want to create could include scorecards and an overall game board. After the first year, handicaps could be considered to even the playing field for those having to forecast products that are highly volatile (e.g., a handicap could be easily calculated by using the standard deviation of actual sales.)

Read the original Journal of Business Forecasting article here.