Planning Assumptions

We've discussed describing the facts of your situation as one of the first steps in the planning process. After all, it's important it is to know what you know. Now, let's add to that "starting status" by knowing what you think.

In addition to the facts -- the things you KNOW to be the case -- it's also important to lay out your assumptions for the present and the future. The idea is to figure out what things you can reasonable expect to happen that haven't happened already. The purpose behind this is to create a plan that's firmly grounded in reality. There's no sense in making a plan, hiring new people, budgeting resources, and blowing off other opportunities if your plan would only work if the laws of physics were suddenly reversed.

Let's try to visualize how this works. Let's say there are a lot of options open to you that use various combinations of money and time, and you could plot all those combinations on a graph:



Then let's say you identify certain facts, like "Our review board has a minimum of three days to examine each phase of the project," or "If our employees work more than 40 hours a week we have to pay them overtime." Such facts will limit your options because they affect the time and money available to you. On our graph, the limitations created by the facts are represented by blue lines:



But to maximize the reality of your plan, you need more than just the things you're sure of; you also need to consider the things you're pretty sure will happen. For example, assuming "Interest rates will drop so we can get cheaper financing" has an effect on your available money. On our graph, these assumptions are represented by red lines:



See how we've gone from a lot of options down to a smaller set? These represent the options that are within our known, and expected, capability.

Because they limit solution sets, assumptions should be few in number, and they should only be for the important issues. As you'll notice, the more limitations you put on yourself, the smaller and smaller the number of options becomes. It's important to be realistic, but it's also important to leave yourself some courses of action, so be careful about saddling yourself with unnecessary limitations.

With that in mind there are a few criteria you should consider for your assumptions:

First, they should be logical. Simply wishing something was the case doesn't make it so. Remember what we mentioned earlier about changing the laws of physics? Ain't gonna happen, so don't assume it.

Similarly, they should be realistic. You should have some evidence to back it up. If there's been a behavior trend among your clients up until now, don't assume that's going to change without some effort on your part. If you need it to change, maybe that needs to be part of your plan.

Finally, they should be essential. Each assumption has the potential to reduce your possible courses of action, so make 'em count. Consider it this way: if you make an assumption, and it turns out your wrong, and that would wreck your plan, then it's essential. If a bad assumption wouldn't have any effect on your plan, then it's not that important and you should leave it out.

One of the biggest criticisms of strategic planning is that all too often it takes place in a fantasy world completely disconnected from reality. That's especially problematic in creative fields where your employees are trying to think beyond limitations. It's your job as a leader to occasionally bring them back down to Earth, and then encourage them to focus their energy on the things that really are possible.