Reference Class Forecasting

Predicting outcomes by finding the relevant reference class (similar past situations) and using their distribution of outcomes as your starting point. Developed by Daniel Kahneman and Bent Flyvbjerg to combat planning fallacy. Instead of estimating your project's timeline from the inside (bottom-up task estimates), start with how long similar projects actually took. Reference class forecasting consistently produces more accurate predictions than expert judgment.

When to use it

When facing strategic decisions under uncertainty; when multiple stakeholders have competing interests; when the stakes are high and reversibility is low.

How it can help

Provides frameworks for navigating competitive landscapes, allocating resources under uncertainty, and making high-stakes decisions with incomplete information.