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Assumptions and Uncertainty

By M. Dana Baldwin, Senior Consultant

Strategic Planning Expert

Strategic Planning Expert

As Mark Twain once famously said, “It ain’t what you don’t know that gets you into trouble. It’s what you know for sure that just ain’t so.”  This most certainly applies in strategic planning.  Your vision for the future is based on your team’s educated guesses (aka assumptions) about what might happen going forward, and not on certain knowledge of what will happen.  How does one go about minimizing uncertainty?

You must accept that you do not know for sure what will be the future results of current actions and decisions.  To allow for this, you need to accept that uncertainty is not the exception, but rather the rule.  In order to handle uncertainty, the team should look at each situation by considering the possible outcomes: as forecast, better than forecast or worse than forecast.

You won’t be able to determine which scenario is the absolute best because, in all likelihood, some of the elements which influence outcomes are out of your control.  But what you can do is to try to determine which elements you can control, and to analyze how things might proceed in the real (future) world.  Then try varying your assumptions about each scenario to see what might happen under different conditions.  As an example, look for the most positive possible conditions and extrapolate the scenario forward.  Does the outcome improve, and does it improve by enough to justify the optimism?  Similarly, assume the worst possible set of conditions.  By how much does the outcome change?  If it changes only a little, and if the most positive assumptions indicate a good up-side, then the risk should be lower and the opportunity should be considered for inclusion in your strategic plan.  On the other hand, if the downside is huge, and the upside is only minimal, the risk is much higher and the opportunity probably should be dropped.

All this presumes that outside influences and conditions allow your assumed conditions to be met, and this must also be examined with an eye toward reality.  How likely is it that your assumed conditions will be close to reality, thus having an appropriate level of impact on the overall results?  Are your assumptions about the underlying conditions realistic or idealistic, or possibly overly pessimistic?  The key here is to be as consciously realistic as possible, while still considering the possibilities that lie outside your zone of comfort.

If you need help with your assumptions and your strategic planning, please contact me at baldwin@cssp.com or at 616-575-3193.  We can lead your team through an efficient, effective process which will result in an actionable strategic plan which will guide your organization into the future.

To learn ways to take your strategic planning to the next level please listen to our webinar:  Why my strategic planning isn’t working.

M. Dana Baldwin is a Senior Consultant with Center for Simplified Strategic Planning, Inc. He can be reached by email at: baldwin@cssp.com

© Copyright 2015 by Center for Simplified Strategic Planning, Inc., Ann Arbor, MI — Reprint permission granted with full attribution.