Tuesday, June 30, 2015

Digital Strategy Tuning: How to Make Good Business ‘Assumptions’

"Assumptions" should be thought of as qualified projections rather than the best guess.

Running a business is a thorny journey, with a lot of uncertainty, complexity, and velocity on the way, what are basic business ‘assumptions’ mostly flawed or invalid when preparing business strategic planning? And how can organizational leaders make a continuous adjustment to ensure the business is “doing the right things” before doing things right, framing the right questions before answering them right?

"Assumptions" should be thought of as qualified projections rather than the best guess: Business can be only done on facts and that too objectively assessed while business decision requires imagination power, but the same needs to be validated at repeated intervals. Particularly, in the business planning process, assumptions should be kept to the minimum. The defining document of your business should not be based on assumptions. Of course, if you’re entering a space where there is no historical record of standards and procedure, it is acceptable to draw conclusions to some degree. But, keep in mind that every unsubstantiated element of your business plan is a loose brick in the wall of success! In the case of your strategic planning, "assumptions" should be thought of as qualified projections rather than the best guess.

Define three “Changes” to get reasonable control: Business leaders must relate their current business environment continually to those assumptions made when the plan was first devised. If these are changes in the assumed conditions, you must ask how this affects the business currently and going forward. Business benefits arise when people act in new ways. Customers, staff, partners need to do something different to make business benefits to occur. Therefore, investing in business improvements often fail because you try to forecast the result only. The fact is, you need to define three "changes" to get reasonable control. When you define these three kinds of changes, you find the KPIs to measure for each of them, and the change owners for them, Not doing this is the mother of all wrong assumptions.
(1). Enabler (2). Process change enabled (3). Results from process change.

Everything has more than one side and you have to master them all. As far as for assumptions, sometimes it’s inevitable that you have to make them, because you will never have complete information, and if you try to only act on what you know by fact, you are more likely to go wrong. Also, when trying to determine the macro environment, and how the factors there may influence your business strategic plan one way or another, it is difficult to move away entirely from assumptions. You can always put a semantic spin on the word and call them projections, but those "projections" are very often based on conjecture or assumptions. So you have to collect enough information, listen to different PoVs, and sometimes it can be very worthwhile to spend extra time to solve a problem excellently. You may find an insight you didn't find before. You may find a clearer way to think about the problem, which you can reuse next time you see a similar one.

Simplicity is crucial in both strategy and execution. It is so easy for us as human beings to over complicate the strategy and the execution. There are so many people that tie themselves up in the detail - is it a goal; is it an objective, they focus on the trees with ignorance of forest; so they lose sight of where they want to go. It’s important for staffs to understand strategy well in order to implement it; however, so often strategy can tie people up so much they lose sight of where they are heading, which is quite the paradox. At least if someone is in motion, it is easier to help them change direction or put framework (strategy) around where they are going and how they might get there. But if assuming resistance to change is not the issue, it will cause further issues later.  

Digital strategy is no longer a static “shelfware,” but dynamic shareware. A strategy is a tool to multiple definitive goals. As goals are met strategies should be reevaluated to ensure that proper goals are established and prioritized. Execution is bringing a strategic vision into reality. Execution can start once goals are clearly defined because there are two characteristics of the digital age: the decreasing lifetime that a strategy is relevant in today’s world, and the tenuous link between developing a strategy and getting an organization to execute it with speed and excellence. Translating strategic intent into meaningful action and making the needed changes stick can be difficult – and doing it frequently and at a fast pace, even more so. Failures happen when strategies are not maintained and relevant with a flawed assumption, or when the execution loses sight of the strategic goals.

The strategy is the vision of the future. Goals are measurable markers as we approach the vision. Execution is the road traveled from vision to reality. You have to adjust the assumptions, overcome the roadblocks. and execution requires consistency, correct and timely feeding, also cleaning up. When it is done well, you get the desired result.  


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