Thursday, March 7, 2013

The Most Valuable Advice I Got from Jim Burke

I started my career with my mentor, Jim Burke, the most respected distribution engineer in the world. Five years ago, my first boss assigned me as Jim's mentee. At that time, I just started working on my load forecasting projects. I really wanted to be a mentee of a forecasting guru, but not Jim.
Even if you are interested in load forecasting, you still need a solid power engineering background.
My boss told me, together with many other reasons that I had no way to argue. I finally accepted the assignment:
Sucking all the knowledge from Jim before he retires.
Over the years, I learned tremendous amount of stuff from Jim. When Jim retired last year, I realized that I failed the original assignment. I was unable to suck all his knowledge, simply because it is a mission impossible. There is too much to learn from his 45+ years of experience.

However, I think I got the most valuable advice from Jim:
Always be honest, and while the consequences may be negative for a while, when you get my age, you'll be happy with yourself.....jim
What does "honest" mean to a consultant? Here are my thoughts:
  1. Don't promise something that we know we can't deliver;
  2. Don't charge more hours than what we actually spend;
  3. Don't deliver less than what was promised.
It looks trivial, but can be painful to execute sometimes. It means that we may walk away from a million-dollar offer; it means that we may run out of cash; it means that we may admit a not-on-scope delivery at the end of the project and take responsibility for the consequences.

More specifically, what does "honest" mean to energy forecasters? Since all forecasts are wrong, are we forecasters dishonest all the time?

It depends. Forecasters often get some external pressure to "adjust" the forecasts to meet someone's agenda. The CFO may want to see an increasing demand so that the predicted revenue will be high. The regulators may expect a mild load growth to reflect the past investment on the energy efficiency programs.

My takeaway is that as long as we stick to a credible methodology, it's OK. Once we start following other people's agenda by modeling their mind instead of the real data, it becomes a dishonest or even fraudulent activity.

Fraudulent forecasts could happen in many situations. Sometimes it's hard to tell. I'm putting two examples here:
If the plan comes out before the forecasts, it's fraudulent. 
In many utilities, planning and forecasting come hand-in-hand. Sometimes, the planner already makes up his mind on a plan, e.g., building a substation. Then he wants the forecaster to develop a forecast showing significant future load growth to support the plan. This should not happen in an honest forecasting and planning process. Some key concepts should be clarified in these cases, such as goal, target, plan, scenario and forecast.
If a dummy variable is used to hide the error, it's fraudulent. 
It's OK and necessary to use dummy variables in a systematic manner when developing load forecasting models, such as hour of a day, days of a week and months of a year. It is also OK to apply dummy variables to special events and days systematically, such as big outages, load control hours, and holidays. Sometimes a forecaster sees a big error that is hard to explain, then he adds a dummy variable to perfectly fit that data point to hide the error. This is not OK. Such activities should be abandoned.

A forecaster may be safe on the job for a while by manipulating the forecasting results. Eventually, it will destroy his credibility, because these ad-hoc manipulations can't be consistent. On the other hand, if the forecaster sticks to the honesty, "the consequences may be negative for a while". I did experience such negative consequences in person. In fact, Jim sent me the note that I quoted above during my downtime, which was very encouraging and helped me make the right decision.

I'm not yet at Jim's age, but I've been happy with, actually proud of myself and the decisions I've made so far. Some positive consequences already come along with my honest consulting practices. More and more clients trust me, hand me projects, listen to my explanation of the forecasts, and offer me customer testimonials. Nowadays, I'm mentoring some people as well. While I'm not as a great mentor as my mentor, I've been more than happy to share with them my experience and this most valuable advice I got from Jim.

1 comment:

  1. Very interesting and i congratulate you for taking such a bold step. It was a quiet afternoon as i and my friend discussed your post today. We are both PhD students in TU Wien and one working in the topic of optimal placement and i am working in the topic of optimization under uncertainty. I have also recommended your research positions to my students in Pakistan. I wish you all the best in your career and in becoming another Jim (Gem) of future. :) Sohail (Vienna-Austria)


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