“In a start-up company, you basically throw out all assumptions every three weeks.”
– William Lyon Phelps
Assumptions are dangerous things. After all, to assume means to suppose something to be true but without proof. Hence, assumptions are dangerous both to individuals and to organizations.
The dangers are doubled in fast moving markets with agile competitor unhindered by your assumptions.
One goal of management is to teach their organizations not to rely on assumptions. It is beneficial to have a corporate culture that avoids assuming anything but also is not burdened by analysis paralysis, the endless investigation of the perfect solution to a problem.
What every manager should do
Everyone in a leadership role, from the third shift floor manager down to the CEO, needs to get their teams to eliminate assumptions from their decision-making processes. This is easier said than done as humans run largely on intuition, which is the art of making decisions with incomplete information. Where data is lacking, assumptions have to be made.
Managers then must encourage employees to check off the common points for bad assumptions and encourage appropriate investigations into the remaining areas. Often this involves only a little oversight and ad hoc challenges.
MISSION FIRST: A boss should always see if the assumptions are all aligned with the company, department or team mission. Too many assumptions are in the “wishful thinking” category and need to be checked against the organizational missions. If your teams are not well acquainted with the sundry corporate missions, then you didn’t do your job.
BUSTING BUDGET BUSTERS: Many employees either don’t calculate project budgets well, or worse yet, assume the budget is flexible. Budget assumptions – the multitude of micro expenditure guesses within a complex project – need to be made non-assumptions. Baseline ballpark pricing is a minimum requirement.
DEVILISH BOSSES: Play the role of Devil’s Advocate. Be a lightweight prosecutor and ask many questions aimed squarely at what you think are assumptions being made. Most employees, when faced with their unfounded assumptions, will say “let me get back to you on that” and then go do some diligence.
ASK FOR ALTERNATIVES: A sign of a macro-level assumption is when only one solution is presented. Even basic project proposals should have one or two alternatives that have been rejected for obvious deficiencies. Ask employees “what is the alternative”, one of which is always “do nothing”. You may have to commit to some real-time brainstorming to help them explore substitutes.
PROS AND CONS: Sometimes go/no-go decisions are made based on the pros and cons involved (e.g. what are the advantages and disadvantages to entering a new market). If you see a pro/con tally that is skewed too heavily in one of the two columns, have your team rework the list until there are roughly equal in terms of explored ups and downs. Then you don’t have to assume they searched for all possible outcomes.
Umping to conclusions is not exercise
We all make assumptions. But in business, assumptions can kill a company. Help everyone in your company to not make more assumptions than necessary.