Mistaken Assumptions of Business Leaders by Kathryn Earle

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Have you ever seen a magnified picture of a fly’s eyes? The common housefly has a compound eye, enabling it to perceive dozens of images at the same time.

Humans, on the other hand, have only two eyes, and our brains select a very small subset of what we will “see” and what we will not. This ability generally works to our advantage: in spite of millions of bits of information coming at us every second, we manage to focus on the right things.

The key is knowing, instinctually and through learning, what the right things are. In business, having assumptions is critical—you cannot see,” much less verify, “everything” before making important business decisions. Particularly during strategic planning, assumptions about a company’s situation and its capacity to achieve significant change can influence implementation and eventual performance. If the assumptions are wrong, the plan’s chances for success can be seriously jeopardized. This article explores the most common ways mistaken assumptions can trip up business leaders, and shows you how to recognize and avoid these assumptions before you launch future strategic plans.

The key to a great strategy is to have disciplines that make it easier and more likely you will (1) focus your conscious attention and your work on the right things, (2) check out the assumptions that need scrutinizing, and (3) trust that the other assumptions were truly close enough. Let’s look at the key elements of a disciplined process that helps you avoid mistaken assumptions.

Don’t be blindsided by your assumptions. Although accounting firms routinely write assumptions into client reports, it’s amazing how few companies include their assumptions in either their strategic planning process or their written strategic plans. Avoid being tripped up by the one assumption you were unaware of having made by bringing conscious intent to your thinking.

Remember the past. In a new planning cycle, start by recalling the assumptions (explicit or not) on which you based your last planning effort. Why did you pick certain options and not others? On what factors did the success (or failure) of your last plan depend, whether you realized it or not at the time? Identify which assumptions remain valid and which must be rewritten.

Update your understanding. Look at what you know today. How do those facts—especially the most painful ones—change your assumptions, moving forward? What new assumptions must you form as a result of a realistic look at what is, and what is likely? What sources of new information could help you challenge and test your assumptions? Craft a new set of assumptions that offers a judicious balance, given what you do know.

Read the rest here: http://repository.the-ceo-magazine.com/articles/mistaken-assumptions-business-leaders.html

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