Assumptions: A Planning Essential

A necessary yet often overlooked step in the planning process is the recording of assumptions; those insights and expectations upon which the plan will be constructed. Sometimes referred to as internal and external scanning, planning assumptions provide an opportunity for the senior team to discuss, dialogue, and debate where they see things moving over the term of the plan.

Looking to the outside, assumptions may include thoughts about where your industry or profession is heading. Are there reliable research-based organizations that track your industry closely? What can you glean from your suppliers and manufacturers that might provide insights regarding their plans for the next 12 to 36 months? Industry and/or process specific consultants can offer useful observations on general trends and ways in which their clients are preparing for the term ahead.

Assumptions will also include an outlook for the economy. What will borrowing rates look like? How about the employment picture? Consumer confidence? Will political changes affect general business conditions and if so, how?

Next and most importantly, take an honest and informed look at what may be ahead for the industries and professions represented by your key accounts. Are there challenging headwinds ahead? Are your best clients in segments that may experience special consequences such as rapid growth, mergers or acquisitions, or contraction? Are there potential leadership changes that could impact your best client relationships?

Next, focus on internal assumptions.  These could include issues regarding workflow, employees, leadership changes or challenges, financial matters, banking relationships, equipment or technology needs or your physical plant layout or location.

The best process is to allow all planning team members to share their assumptions without interruption. Once everyone has had the opportunity to participate, and the list is complete, prioritize the list in order of those with the greatest potential impact on the enterprise during the coming planning term. Now comes the fun part! Each team member is given the opportunity to challenge any assumption; respectfully and directly. Why are these assumptions being considered and how realistic are they? What research and/or data undergird these and what are the sources? Who did the research and who funded it? This is another area where a skilled planning facilitator can be helpful, ensuring that protocols, processes, and proper procedures are followed, and that disagreements remain constructive.

In his excellent book, "Red Teaming," author Bryce Hoffman identifies significant flaws in planning assumptions when they go unchallenged. He recommends several group exercises designed to help teams get to a better place regarding the accuracy and usefulness of their planning assumptions. After all, any plan based on flawed assumptions is unlikely to bring about the desired outcome.

For more information on ways your organization can benefit from a structured planning process, contact me at joe@ajstrategy.com.