by Jill J. Johnson, MBA, president, Johnson Consulting Services
Today’s business climate is exceptionally volatile and complex. In this type of uncertain environment, it is essential to reassess all the strategic assumptions that have been the foundation of planning efforts. Organizations no longer have the luxury of being able to take for granted that shifting trends will be easy to see or that customer needs will be stable.
As so many external forces influence the ongoing value of an enterprise, it has become more essential to challenge the assumptions used for strategic planning purposes. Going forward, success requires detailed scrutiny to determine how much risk is really faced. This scrutiny will also help better anticipate the changing needs of customers.
When assessing the assumptions used for decision making, there are several critical flaws to avoid. These assumption flaws include internal beliefs based on incorrect information or errors in how the assumptions have been developed.
Most leaders believe that they already know the most critical assumptions that impact their organization. Yet all too often, it becomes easy to get locked into a belief paradigm that causes one to stop paying attention to what is really happening in the evolving world around them. Customer expectations change. Budgets and priorities shift. Competitors make aggressive moves. Tactics that previously worked well are no longer getting the same response from customers. If this sounds familiar, then it is the time to reassess assumptions.
Review your strategic assumptions
Set aside time to fully re-assess all the assumptions the organization uses. This will help develop strategies that leverage new opportunities offered by changing trends impacting an industry. It will also provide new insight to help better anticipate the potential impact of these changes and others that may need considered.
Make sure to have more than just a superficial understanding of the issues at hand. Review the strategic assumptions from outside one’s own paradigm of perspective to better navigate the complex variables impacting customers and their decision-making processes. Ensuring that the team also has a comprehensive understanding of the potential impact of complex external forces that affect an enterprise will help them be better stewards of the organization’s future.
Gaining a deeper understanding
When operating in a complex economic environment, a deeper understanding is required of the complexity of issues that affect decision making. Re-assessing your assumptions encourages one to ask the hard questions about the market forces influencing an enterprise. It also reexamines the assumptions about customers in terms of both their decision criteria and what triggers their purchasing behavior.
It is imperative to consider how the assumptions the company are currently using may be distorting a situation and undermining the ability to make better long-range decisions.
Developing better assumptions
Good assumptions are based on accurate information and this information needs to be continually updated. The most critical factor that determines how rapidly one can get clarity is grounded in the quality of the assumptions that are used to evaluate decision options. Good business decision makers are always willing to assess how changing assumptions can benefit their bottom line or create new revenue streams.
Reassessing assumptions about the future will make a better strategic thinker and give deeper insight into how marketplace needs are likely to change. Encourage trusted advisors and key employees to help challenge the assumptions currently used in an organization for decision-making. Be on the lookout for emerging trends and how they may affect an enterprise. It is always safe to assume that something is going to change.
Jill J. Johnson, MBA, is the president and founder of Johnson Consulting Services, an accomplished speaker, an award-winning management consultant and author of the book, “Compounding Your Confidence.” For more information, please visit www.jcs-usa.com.