Masters in Business

Don't Blame the Weather

Fred Fox uses big data to explain the impact of temperature, wind and precipitation on business.

Most companies, from retailers to transportation companies, are surprisingly unaware of the impact of weather on their business. This is where Fred Fox, founder and chief executive officer of Weather Planalytics, comes in.

The company specializes in the study, development and commercialization of weather analytics. Clients include companies and nongovernmental organizations that want to better understand the ordinary course of weather, not just hurricanes or other one-off events.

Fox points out that without accurately measured base lines, blaming the weather is simply excuse-making. For example, investors and the news media rightly treat with skepticism a retailer that blames inclement weather in February for earnings or sales that are below expectations. Now imagine if that same retailer could point to data showing that in that month in the past four years there was an average of 10 inches of snow on the ground versus 48 inches this February. That's not just an anecdote; it's a fact-based explanation that relies on verifiable data.

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Next week, we speak with quantitative finance expert Paul Wilmott.

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