In the Paterson Strategic Operating Plan process we learn that no organization has ever died from too many opportunities. Organizations die from invalid key assumptions and unmanaged risk. As we did with Perspective let’s define Key Assumptions; A Key Assumption is a fundamental principle we are living with we believe critical to our success. We may or may not have validated it as truth. Think of it like a hypothesis in math or science that has yet to be proven through the proof process. A hypothesis begins with an assumption.
Each of us live daily with assumptions; the car headed toward me will stay in its lane, my work will be rewarded, I can make that putt, etc.
In the 25 plus plans I have completed, I have yet to encounter a group that could rattle off the assumptions they were operating with and the proof they were all valid. In fact, what are much more common are phrases like “I never thought about our assumptions” or “I don’t know if my assumptions are valid or not, how do I found out? “. Let me introduce the concept of Key Assumptions with three short examples. In the 3 day Strategic Operating Planning process for a company we were discussing what assumptions were we living with. One participant threw out “Our customers love us”. The group participating all agreed. Incorporated into this particular client’s plan was the assumption “Our customers love us”. Fast forward two years later. I had been brought into facilitate a two day review of the plan and we arrived at Key Assumptions. The aforementioned phrase was reviewed. The group grew quiet and the CEO said“That’s not true”. I asked why and he reported they had lost one of their largest and most tenured clients. The discussion that followed led to a detailed breakdown of how we had lost the client. Today the client is back with procedures in place to do our best to prevent a recurrence. In another organization, the group, a non-profit, depends heavily on a particular state fund. Each time they review their plan they review the assumption “State funding will remain in place”. One morning the leader of the group received a call this funding was being discussed in a senate committee for termination. Within 5 hours the leader and about 22 constituents related to the non-profit were in Columbia, SC meeting with a subset of the senate committee. By day’s end the funding was intact and off the table. Imagine what would have happened if this group had not come to understand how critical this assumption was to their very survival. A different outcome would have most certainly played out. Finally, I recently was brought in for a review after a multi-year break in working with a particular client. When we arrived at Key Assumptions the owner asked the group to define one word in one of their most critical assumptions. Not one person agreed on the definition. A conversation lasting more than 1 and ½ hours ended with a collaborative answer. The group agreed it was living in a dangerous place with so many different interpretations of the assumption.
The three stories all highlight how organizations can live with real risk, risk they have full control and power to do something about, masked in assumptions that may or may not be valid.
What assumptions have you made about your organization that have yet to be proven as true?
What's Important Now?
Is your organization clear about the assumptions you are living with?
Want to understand more about Key Assumptions and their effect on your organization, your clients, and your future?
Remember to join the conversation by leaving your comments, questions or becoming a follower on my blog.
