The weighted forecast says £480,000. No quarter you can actually have ends at £480,000.

Probability-weighted pipelines produce a number that is arithmetically defensible and operationally useless, and the reason has less to do with the percentages than with how few deals you have.

By Steve 5 min read
Abstract bridge artwork for The weighted forecast says £480,000. No quarter you can actually have ends at £480,000.

A sales pipeline holds eight live opportunities worth £960,000 in total. Each is discounted by the probability attached to its stage, the numbers are summed, and the forecast reads £480,000. The board plans hiring against it. Finance plans cash against it. And there is no sequence of events in the quarter that produces £480,000, because deals do not close in halves. This is not a criticism of expected value. Expected value is the right way to price a repeated bet. The problem is that a weighted pipeline forecast quietly assumes…

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Important: General information only. Rialto Bridge articles describe patterns and considerations that may apply to a business; they are not financial, legal, tax or accounting advice, and they take no account of your particular circumstances. Consider your own situation and seek advice from a qualified professional before acting.

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