---
title: "Why Your Forecast Is Broken"
episode: 6
podcast: "The LeanScale Podcast"
publisher: "LeanScale"
guest: "Anthony Enrico"
guest_title: "Co-Founder"
date_published: 2023-05-16
date_modified: 2026-07-22
duration: 00:15:53
word_count: 2631
topics: ["forecasting", "revenue-operations", "gtm-strategy", "sales-leadership"]
canonical_url: https://leanscale-knowledge-hub.netlify.app/podcast/why-your-forecast-is-broken/
source: "LeanScale Podcast Knowledge Hub — https://leanscale-knowledge-hub.netlify.app"
license: "Free to quote and cite with attribution to The LeanScale Podcast."
---

# Why Your Forecast Is Broken — Full Transcript

> Episode 6 of The LeanScale Podcast, with Anthony Enrico.
> Published May 16, 2023 · 00:15:53 · 2,631 words.
> Machine-transcribed and **not diarized** — speaker attribution is inferred, so verify
> attribution against the audio before quoting a specific person.
> Structured breakdown: https://leanscale-knowledge-hub.netlify.app/podcast/why-your-forecast-is-broken/

## 00:00 — Cold open: the hidden danger of forecasting too low

**[0:00]** I don't think people think about this problem as much, but if you forecast too low, overpromise to the market, bring on too many customers, you may not build out the infrastructure to take care of them, to manage them, and the negative ripple effect of that could be pretty catastrophic. Welcome to the LeanScale Podcast, where we talk about everything RevOps. Thank you for listening. Today we have a really full topic to go through. Forecasting seems to be one of those issues. It's never ending. There's a million ways to do it, so I thought it'd be helpful if I brought more than one guest this time. I brought the best of the best from LeanScale.

## 00:56 — Meet the panel: Bernardo and Cameron

**[0:56]** I have two LeanScale engagement managers with me today. Bernardo, Cameron, thank you for helping me tackle this one today. Absolutely. Our pleasure. Three-man crew. Got to tackle it. Got to tackle it heavy. Forecasting, let's do it. It probably takes 100 people to figure this one out, but we'll give it our best with the team we have here today. For people listening, I wanted to tee it up a little bit. I think people know forecasting is important, but could you give me some reasons why it's so important? Practically speaking, why is forecasting so important for your business?

## 01:33 — Why forecasting matters: predictability & capacity planning

**[1:33]** Yeah, I think the biggest thing when it comes to forecasting really comes down to predictability. Everything in the business, especially in today's economy where not everyone has cash just on hand to hire ahead of time and make the right investments in the business at any given moment. Forecasting gives you that predictability of when do I need to make investments, what's coming down the pipeline. It's going to influence how much marketing you're going to spend. It's going to influence how much sales investments you're going to make. Your CS team is going to be highly contingent on the deals that are coming in, the size of those deals, who

**[2:09]** you need to escalate to work on those deals. From a capacity planning perspective, forecasting is everything. Now, more so than ever, having a clear sense of what's coming down the pipeline and when it's going to come in will allow you to better run your business and stay ahead of the curve in terms of being up to date on what you need down the line. I think Bernardo put it best and very beautifully. I think just making sure that we're not talking about backcasting. We're talking about forecasting. How are we looking forward into the future and creating a plan that fits for where you're projecting going? That's the basics of forecasting.

## 02:54 — Forecasting too high vs. too low

**[2:54]** If I'm going to answer it in more layman's terms, that's why forecasting is just such a critical piece to follow the trends of the business and be able to plan out ahead quarters, years in advance to know where you are going to end up and what resources you need to put in place to continue on that growth trajectory. I can give a couple of examples that I've run into. If you're forecasting too high, some of the investments that you need to make take time. It's not like you can get salespeople ready to go on day one. If you need extra resources and customer success or customer

**[3:32]** support, they're not ready day one. If you're forecasting very high, a lot of times you need to start making those investments ahead of time ahead of actuals coming into the door. You may be over investing if the forecast is too high. On the other side, if you forecast too low, and I don't think people think about this problem as much, but if you forecast too low, over promise to the market, bring on too many customers, you may not build out the infrastructure to take care of them, to manage them. The negative ripple effect of that could be pretty catastrophic. Both sides of the coin have really, really negative outcomes.

## 04:14 — Why companies struggle: you're predicting the future

**[4:14]** Forecast too high, invest too much. Forecast too low, invest too little, you could diminish your brand. I think that's why there's so much attention to this. Everybody seems to be invested in the forecast and understanding where we're going to land, how we're going to land and how to make it as accurate as possible. Why do you think companies struggle so much with forecasting? To put it bluntly, it's really hard. You're trying to predict the future. You don't have full control of the situation. We know that on the customer or prospect side, there's going to be delays. There might be changes in the company structure

**[4:54]** that might cause deals to slip. Their priorities might shift over time. There are so many things outside of your control that you just kind of have to accept that it's never going to be a perfect science. There's a lot of subjectivity into it. Especially when it comes to timing. Your forecast on day one of the quarter is probably going to look very different than two weeks before you're actually closing the period. It's an ever happening exercise where you're constantly making adjustments, ingesting new information and making decisions based on what you know to the best of your ability at any given time. It's never going to be

## 05:35 — The 100% accuracy trap (sandbagging)

**[5:35]** a perfect science where you always have 100% accuracy on your forecast. If you're forecasting with 100% accuracy, it's probably an indicator that you're either sandbagging in some way, deals are slipping, or you're not introducing enough friction somewhere, pushing deals to close faster or anything like that. It would be slightly concerning if you were always 100% on the spot because it's not something that you can fully control on your side. Yeah. And just to add to that, I mean, if you're hitting your forecast at 100% and just hitting goal and making your call every time, you probably should be playing the stock market

## 06:12 — One step closer to the truth

**[6:12]** every day. Maybe you are on the side and be sitting on a beach in the Bahamas somewhere because to be able to predict the future to 100%, I'd love to find that person and let them be my best friend. But I think, again, to follow up Bernardo there, I think it's about making progress to get one step closer to the truth. A lot of people want to forecast down to the penny and make calls. And it's important to set goals and make those calls. But don't be so obsessed over getting it right rather than getting it one step closer to that actual truth that helps push the business forward. That's really the most important

**[6:51]** thing and you want to be comfortable with that, just that one step closer to the truth. Yeah, I agree with that a lot. I think of forecasting as an iterative process. So you start to layer on new pieces of information, new methodologies of forecasting that allow you to get that one step closer to the truth. Understanding perfection is not possible, but at least if you can get better, I think it's going to be better for your business. So we know it's hard. We know it's important. What do we do about it? What are some practical ways we can start enhancing our forecast accuracy and setting a good foundation for having the

## 07:34 — Fix \#1: consistent, clearly defined stages

**[7:34]** most accurate forecast possible? Yeah, absolutely. I think the beginning of it all is just making sure that the things that you're putting into your forecast are consistent. You want to maximize the amount of things that you can control and fill out the information for that and give reps the ability to be set up and empowered to make calls of what's going to happen in the future. So clearly defining things like what are the qualification methodologies that you're using? Don't put this deal in this stage unless these things have taken place. And that way you have a little bit of science and structure to something that is highly

**[8:14]** volatile. So that is a great starting point having clearly defined lead stages, sale stages, what goes into your entry exit criteria and benchmarking things with that. Or then you to be able to come in and add that subjective perspective to it of, okay, based on the conversations that I've been having, these are the things that we need to consider. It opens up a lot of flexibility in the forecasting. For those listening, I think it'd be important to know what are the most important stages? Yeah, absolutely. I think some of the milestone stages that we're looking at, the first one is when it enters the pipeline, right? When

## 08:59 — The three milestone stages (BANT → MEDDIC)

**[8:59]** you're committing to saying, I am going to be working this deal, there has been enough pre-qualification steps in here that we're confident that there's some level of intent as well as budget capacity. We've seen Bant kind of phase out of priority over the last few years with Medic kind of taking over as the predominant methodology that people are using to qualify deals within our existing customer base here at Lean Scale. Following that, I think some of the milestones that we're looking at is that proposal negotiation, obviously once you start talking commercials, that's generally a pretty good indication

**[9:39]** of health, things are moving forward. And then getting into that, okay, we've cleared the commercial hurdles, let's go over into the legal or executive approval, where you have that internal champion or frontline decision maker kind of convinced, and now it's outside of their hands and more so into compliance, legal, whatever, higher power needs to get involved to sign this deal. Those are really the three main milestones that I'm looking at for a deal. It makes a lot of sense. Yeah, and I'll go one step further. I know we talked about one step closer to the truth of forecasting, so I'll go one step further on the sales staging

## 10:18 — Fix \#2: completed-state sales staging

**[10:18]** and something that I talked about on a previous episode was around the Lean Scale method. And so that's something that we all subscribe to here and really getting clearly defined on the sales staging side of the house and even making small tweaks to that sales staging and the nomenclature to create a clear window into opportunities are in what stage. So we like to get tactical here, right? We don't want to be high level and just tease out that change your sales staging, stop going with the basics of proposal negotiation, demo discovery. We add some language into our best practice sales staging that really speak to what stage

**[11:01]** you've completed. So instead of just having a plain negotiation stage, I want to have a negotiation completed stage, right? So every opportunity within that stage, you know exactly where it's at because if I just have a plain negotiation stage or a plain proposal stage, what does that mean? Is that, does that mean I'm building a proposal? Does that mean I've sent the proposal, right? So let's pare down on the ambiguity, right? And vagueness of what's in that stage and really get clear, which is going to just pay off dividends on where you're forecasting. I'm a big fan of that. And what's funny is we actually see that

**[11:36]** usually defined earlier in the funnel. So you'll see stages like marketing qualified lead sales qualified lead rather than marketing qualifying lead, like, or is it going to be qualified? Is it not qualified? So I think, yes, the, the language matters. And if you create your stages as something completed, it's way more clear for your reps because it doesn't get to proposal completed or proposal sent until you've sent it. So really cuts down that ambiguity. What else can we do? What other things should teams be looking for to be able to enhance their forecast accuracy?

## 12:16 — Fix \#3: segment your pipeline

**[12:16]** Yeah, I can, I can jump on that one. So I think a big thing and you're, you're going to out there, you're going to know your business better than we do, but we do have some basics in terms of how you want to segment your sales motion, right? And the opportunities that you have out there, um, segment those accounts by things that matter to your business. And you know, deals are going to look different, whether they're enterprise in nature or, you know, smaller tier, maybe you're looking at a mid market or SMB deal, uh, but really segment out your opportunities and your pipeline based on things like that, from a graphic segment,

**[12:51]** uh, geographies matter, right? Product use case industry, understand what your conversion rates are in those, you know, different tiering and segmentations that matter to you, uh, as well as the overall, you know, sale cycle. Uh, I think those are both huge things to get to that one step closer to the truth when it comes to forecasting. Uh, and again, you out there, you know, your business better than we do. So segment by the things that matter, uh, that you know, anecdotally matter to deals that you've brought in or deals that you're pursuing, uh, to again, get closer to that forecast number that is accurate for

**[13:26]** the business to plan ahead and look out into the future. I think that's so important. We see a lot of companies, they will blend those rates. So they'll say, you know, our sales qualified lead to close rate is 20% and our deal cycle is six months. And you know, that may be dramatically different if you're talking about your enterprise or your SMB segment. And if you're talking about different geographies that move at different paces. So I think that's really smart. If you can segment that, um, one, one last layer I think to put on is once you've had the foundations set, um, and, and, and we don't recommend

## 14:08 — Fix \#4: layer on technology when the process is ready

**[14:08]** layering on technology until the process is ready. But once you have the foundation set, once you have the processes set layering on some technology, there's a lot of good tools out there. Uh, you know, ones that we partner with or Q flow and boost up, you can use those tools to use AI to forecast for you. And I think that's a really important layer because there's a lot of calculations that take place to get an accurate forecast. And once you have the foundations and you're ready for that type of technology, it can, it can really enhance the accuracy of your forecast.

## 14:42 — Wrap-up

**[14:42]** So let's, let's just wrap things up real quick. Um, forecasting it's important. If you forecast too high, if you forecast too low, there's really dramatic negative impacts in either scenario. Um, it's nearly impossible to plan for your business if you don't have an accurate forecast. It's hard. Bernardo mentioned that earlier. It's just hard. Um, you're trying to predict the future and most of us are not great at it, but there's some things we can do to make it easier. And some of the things that we talked about today, get very clear definitions around your staging around how things move into the funnel and segment your

**[15:21]** conversion and cycle by the things that are meaningful for you and layer on technology once you're ready for it. Um, and if you do that, then you should be able to plan for your business better. Bernardo Cameron, thank you so much. Appreciate it. And thank you for listening. Thank you for listening to this episode. If you liked the discussion, please like share and subscribe to wherever you listen to podcasts so you never miss a new episode.