For most businesses, the planning process depends on the quality and accuracy of underlying assumptions upon which the plan is built.

While most plans call for improvement, the external operating environment continues to place challenges in front of every organization.  

Even in “normal times”, recording underlying assumptions is usually one of the more robust segments of the strategic planning process.  Assessments of trends in the external and internal operating environments can surface all manner of concerns, ideas, and opinions. 

Given the constant level of uncertainty, the question arises as to whether this has become a wasted exercise.  With so much uncertainty ahead, how can leaders rightly and accurately record planning assumptions? 

In his best-selling book “Stumbling on Happiness”, Harvard professor Daniel Gilbert makes the point that most of us imagine the future looking much like the past.  Intellectually of course, we know better.  However, our subconscious relies on what is familiar when we think of what is to come.  Being aware of this phenomenon is helpful yet it remains a difficult habit to break.

So how best to record assumptions about future operating years?  Start with the knowledge that being fast, fluid, and flexible will help.  Being able to anticipate and react quickly to a rapidly changing set of circumstances is a worthy organizational competency that will serve your stakeholders well. 

Make it a priority to pay close attention to trusted, reliable and valid sources of information and business trends.  Segment this and assign specific areas of responsibility to members of your team.  Watch for and share with your team key macro-economic trends in the business environment and their likely impact on your business and your industry.  To the extent you can, seek out similar sources in the business segments represented by your most significant customer accounts.  Don’t overlook demographic data in building your assumptions (for example, the ageing baby boom population will be a major factor for many industries; housing, medical, and leisure to name a few).

It can be helpful to frame assumptions into three general categories:  What we know (fact-based), what we think we know (based mostly on deductive reasoning), and how we feel (our hopes, fears, likes, dislikes, and concerns). 

In a time of rapid change, planning assumptions can take on a higher level of importance.  For more information on ways to organize your planning process, contact me at joe@ajstrategy.com.