Yes, we need planning. But if you waste a lot time and resource forecasting…well, you’re wasteful.

From Fed Chairman Bernanke:

WASHINGTON, April 30 (Reuters) – As a Federal Reserve governor in 2004, Ben Bernanke, now the U.S. central bank’s chairman, showed humility — and a sense of humor — in acknowledging a missed call about the path of inflation, transcripts released on Friday showed.

Bernanke was slow to acknowledge that inflation, after a long period of calm, was beginning to heat up. He finally threw in the towel at a meeting of the Fed’s policy-setting Federal Open Market Committee in June 2004, citing “rules of forecasting” borrowed from former Fed colleague Laurence Meyer.

“Rule one, stick with your forecast as long as possible,” he said, to laughter. “Rule two, when your forecast becomes untenable, make a new forecast. Rule three, know when to switch from rule one to rule two.”

Have YOU got rule three down yet? If not, better work on that one.

Chris Reich believes in planning but thinks forecasting is a waste of time because he’s never seen a forecast come true. And because he’s seen forecasts get companies in BIG trouble.