Talking with Floey about Forecasts

Floey sitting - profile croppedFloey jumped off the love seat in my home office, trotted over to my desk where I was sitting, and sat down next to me. “Mom, it’s been a week, and you still haven’t told me about the third thing you were thinking about during your getaway at your Christmas Mountain timeshare last week. Can you take time to tell me about it now?”

“Sure, Floey. I’m ready to take a break from my computer, anyway.”

“Good. Remember, you told me all about reading Joseph Cardinal Bernardin’s book, THE GIFT OF PEACE, and how inspiring that book was. Then you told me about how frustrated you got with technical problems when you tried to post last week’s blog post, and how much you need to become more patient.”

“You have a good memory, Floey.”

“Let’s hope your memory is as good so you can tell me about the third thing you thought about during your Christmas Mountain getaway. You haven’t forgotten, have you?”

“Actually, Floey, I thought about some old, old memories during my week away. Last Wednesday was the 25th of the month. For the past forty years, on the 25th of the month, almost every month (except December), I think Forecast Day.”

“Forecast Day? What does that mean?”

Sears Tower

On clear days, I could see across Lake Michigan from my window office on the 63rd floor.

“In the summer of 1975 I started working for Northwest Industries in the Finance Systems Division. I was 27 at the time and living in Chicago with Mim.”

“What did you do at Northwest Industries?”

“I started out with the catch-all title of Coordinator of Financial Systems. Basically, I worked with accountants, analysts, and their managers to be sure all the newly computerized financial systems worked together smoothly.”

“How did you get that kind of job? I thought you were an English teacher and an editorial researcher.”

“I learned on the job. I took the job because they said they would teach me everything I needed to know, and they would also pay for me to get my MBA, taking one or two courses at a time in the evening.”

“Did you get your MBA?”

“Yes, I did. It took me five years of evening classes, but I got my MBA from the University of Chicago in 1981.”

“More important, did you like the job?”

“Most of the time I liked it. Northwest Industries was a good place to work. The corporate office was on the 63rd floor of the Sears Tower (now called the Willis Tower).

“What did Northwest Industries do? I’ve never heard of the company.”

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One of my treasures from my Northwest Industries days is this pencil holder – a child’s boot from Acme Boot Company.

“Northwest Industries called itself a diversified holding company. It owned about a dozen companies. Acme Boot Company in Tennessee was the world’s largest manufacturer of cowboy boots and paratrooper boots for the U.S. military. Union Underwear Company in Kentucky and Fruit of the Loom in New York made and sold lots of “union suits” and other underwear. Coca-Cola Bottling Company of Los Angeles was the largest bottler of Coke beverages. General Battery Corporation in Pennsylvania made replacement batteries for cars. Lone Star Steel manufactured tubular steel, like that used for the Alaska Pipeline. The Buckingham Corporation was the sole U.S. importer of Cutty Sark Scotch and Mouton Cadet wines.”

“Wow. I guess Northwest Industries was diversified!”

“Yes, it was. In order to manage these companies to make them as productive and profitable as possible, the corporate headquarters in Chicago, where I worked, used four cycles to plan and monitor performance for the companies. And that’s what I thought about at Christmas Mountain last week.”

“So last week at Christmas Mountain you realized it was the 25th, and you thought Forecast Day, and from there you thought about all four planning and monitoring cycles? I think you need to explain a little more.”

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“First, let me identify the four cycles: long-range plan, budget, forecast, and actual results. A brand new long-range plan was created every summer. That’s when everyone took some time to dream and plan how they would like to see Northwest Industries develop over the next four years. Each operating company prepared its own plan, and then our computer systems consolidated the plans.

In the fall an annual budget for the upcoming year was developed. This is where each company prepared specific plans for improving its productivity and profitability over the next twelve months, consistent with its long-range plan.

These two cycles were annual cycles and they focused everyone’s attention on planning. The other two cycles were monthly cycles and they turned everyone’s attention to monitoring progress against the plans.

The Forecast cycle was the most stressful cycle of all. On the 25th of the month, or if the 25th fell on a weekend or holiday, the last business day before the 25th, a complete set of financial statements was prepared along with narratives. The Forecast was intended to give corporate executives a preview of what actual results for the month and remainder of the year would be – before the month was over. The narratives explained why the forecast deviated from the budget, if it did, and what could be done to improve the numbers, if possible.”

“But, Mom, couldn’t those executives at least wait until the end of the month to get the final monthly numbers?”

“No, I think they thought if they knew ahead of time, they might be able to make some changes that would improve the final numbers, even for the current month.”

“Well, I think I understand the first three cycles – Long-Range Plan, Budget, and Forecast. Tell me about the Actual Results cycle.”

tumblr_m32egnnhYP1rsiwfpo1_500“The final numbers for the month were usually due from the operating companies by the 5th of the following month and they were consolidated by the end of that day. If Actual Results for any company differed from the numbers submitted for the Forecast cycle, individual company analysts were held accountable for not understanding and monitoring their businesses carefully enough. For example, one of the closest predictors of Sales for the Coca-Cola Bottling Company of Lost Angeles was the weather forecast. More Coke is sold when it’s hot and sunny than when it’s cold and rainy. If you want to know how much Coke will be sold for the whole month, and it’s only the 25th of the month, it makes sense to study the weather forecast.”

“That’s interesting, Mom, but why were you thinking about this stuff at Christmas Mountain? You haven’t had to care about these cycles for at least thirty years.”

“Well, like I said, on the 25th of the month I still think Forecast Day. At Christmas Mountain, on Wednesday, it was the 25th, and I thought Forecast Day. And, being at Christmas Mountain, I had time to think more about those days back in the 1970s and 1980s. I was probably more inclined to think about my Northwest Industries days because of my technology frustrations the day before when I was working on my blog. I remembered what it was like to wait for the computer to consolidate all the numbers, and then to wait again for the computer to print out complete sets of financial statements. I remember some months I physically ran copies of the statements to the executives at the last minute, just before they left for the day, so that they could carry these statements along with them to study on their train ride home. Thinking about these four planning and monitoring cycles brought back lots of memories. And then I thought, maybe it makes sense to think about how relevant these cycles could be in our personal lives today.”

“What do you mean, Mom?”

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“I think it might be a good idea to do a long-range plan for our own personal lives periodically – probably not every year, but at least more than one time – when we’re finishing school and beginning our careers. I also think it might be a good idea to come up with specific plans (like “Budgets”) every year. That may take the form of New Year’s Resolutions…”

Floey interjected, “Or choosing a special word to focus on all year, like we do.”

“Yeah, that’s the idea. And then comes the Forecast. I don’t know if that needs to be done monthly, although it probably wouldn’t hurt. I think it might be good to periodically review what we’ve observed and learned related to our word for the year and other experiences we’ve had so far in the year. As part of that Forecast review, we could decide if we need to make any changes to be sure we’re working toward the results we want to see in our lives. Following these cycles just might help us become the people God intended for us to become.”

“Wow, Mom. You’ve really been thinking hard about this. Are you sure you’re not taking this too far?”

“Maybe I am, Floey. But what is important is that at Christmas Mountain I have quiet time to think about things like this, and to listen hard to hear what God may be trying to tell me.”

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Floey and me taking a walk in the neighborhood.

“Okay, Mom. I’ll try not to be mad at you next time you go away like this and leave me behind. Maybe I can use the time when you’re gone to try to Forecast where I’ll be by the end of the year in learning all about my special word for this year – Meow – and learning how to communicate better with cats.”

“That’s the spirit, Floey. After all this heavy thinking, let’s go for a walk.”

“Great! We can’t let thinking get in the way of enjoying life! Let’s go!”

 

One thought on “Talking with Floey about Forecasts

  1. Well, this was another very interesting post Marian! It’s really special how/why Foley is SO interested in your past! I also enjoy reading about your past as well! Thanks again for sharing! 😊

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