How a Research Working Group Was Formulated
The SVP of strategy for a large, diversified chemical company with $8 billion in revenue realized that the organization “had not been watching what we should have.” In the midst of the economic crisis, the company faced “limited visibility and significant uncertainty — how far will the downturn go? When will there be an upturn? What will the recovery look like?” The organization had “no resident trained economist” and felt an urgent need to get a better grasp of the macroeconomic environment at the corporate level and the industry environment at the individual business level.
The SVP was frustrated with available data sources, which he thought were mostly backward looking. “We don’t know what’s out there,” he said. “If we find a source, how relevant is it? If it is relevant, how trustworthy is it? And if it is trustworthy, what do we do with it?” Moreover, he asked, “What trends are really leading and how do we interpret contradictory signals?” The company wanted “to reinstitutionalize planning again.” Other members of The Conference Board faced similar problems.
In response to these needs, The Conference Board organized the Business Forecasting in Uncharted Territory Research Working Group. Senior economists provided members with ongoing updates on macroeconomic conditions, while at the same time helping organizations apply the methodology of The Conference Board Leading Economic Indexes to their industries. The Conference Board worked closely with these organizations to develop Leading Business Indicators, which helped them produce two- to four-month leading forecasts on changing conditions in their industries, thus allowing them to adjust their operational plans.
Most of the organizations who participated in this RWG had a sponsor at the C-Suite level. Executives in strategic planning, together with specialists dedicated to capturing critical business data, also joined the RWG.