Overdue for An Assumption Inventory?
Holly G. Green
It’s been said that in today’s chaotic markets, the only
sustainable competitive advantage may be the ability to learn faster
than your competitors. I disagree.
The ability for leaders and managers to learn quickly is
certainly a critical advantage. Especially in industries where new
technologies and/or rapidly changing customer expectations can
disrupt the status quo overnight. But the ability to learn quickly
is not nearly as important as the ability to unlearn faster
than your competitors. The market leaders of the future will be
those companies that not only learn quickly, but can shed outdated
ideas and ways of thinking faster than their competitors.
Think of it like a dusty old attic, full of stuff that had
some intrinsic value at one point in time, but now does little more
than gather cobwebs. If we want to put anything new in the attic,
we first have to get rid of some of the old stuff. In business, our
brains operate the same way. If we want to embrace new ideas about
how to add value to our customers, we must first get rid of old
ideas and old ways of running our businesses. Not all of them, mind
you; just the ones that are no longer working or should have been
How do we know which ideas to keep and which to relegate to
the discard pile? Therein lies the problem. Often, old ideas
that are no longer working are the same ones that contributed the
most to our current success. Because of their success, these ideas
became a fundamental part of our basic assumptions regarding what we
know to be true about our customers, our markets, and our industry.
Over time, they changed from assumptions to ‘facts.’ Eventually
they became so ingrained in our thinking that to question these
‘facts’ is considered heresy. But even for those who dare to
challenge these “sacred cows,” it seems counterintuitive to throw
out what has worked so well for an extended period of time.
The solution lies in taking a regular assumption inventory in
order to separate the old from the new, the good from the bad, and
the still working from the everything changed, so have to update
Companies do this all the time with physical inventories.
Once or twice a year we go through everything that’s sitting on the
shelves, take stock of what we have, and get rid of outdated or
obsolete products by marking them down or writing them off. This
clears the way for new products that can be sold for a higher price
or better profit margin (hopefully).
I’m suggesting we do the same with our ideas and
assumptions. Only we need to do it more often than once or twice a
year. Considering the speed at which the world moves, things we
knew to be true as little as six months ago may no longer be valid.
And the sooner we find that out, the better. So I recommend an
assumption inventory at least once a quarter, and even monthly for
industries undergoing profound change.
What does an assumption inventory look like? Gather your
management team and ask questions like:
changed with our customers, our markets, our industry and the
world at large since our last inventory?
assumptions are we continuing to make simply because we “know
them to be true”? Of these, which are no longer valid? How do
we know that?
systems and ways of behaving are we continuing to hold onto
because “we have always done it that way?”
What ideas for
new products or services have we come up with recently but
didn’t follow through because “that will never work”? What has
changed that might now make them feasible?
While going through this process, its essential to use hard
data to support your decisions about which assumptions to keep,
update, or let go. That’s why it’s so important to stay in close
contact with customers and other key stakeholders in your industry.
Find out what is changing in their worlds, and integrate that
information into your updated assumptions about how they determine
value. At the same time, don’t limit your research solely to
customers and obvious competitors. In today’s markets, disruptive
change often comes from outside your industry.
After conducting a thorough inventory and determining which
ideas and assumptions need to be updated, my favorite exercise
involves the “what if?” session. Again, gather your management team
and ask a series of “what if……?” questions. For example:
What if it was
okay with our customers if we increased prices?
What if we
could deliver our product at half its current cost?
What if we
could get the product out the door in half the time it currently
What if we
became the first company to do X in our industry?
What if we were
starting this business over from scratch? What would we do
differently (and why)?
What if we put
the employees in charge for a day? What would they do
The main purpose of this exercise is to allow people to
pause, step back from their day-to-day focus, and think about new
possibilities. Most of us have so much on our plates that unless we
deliberately schedule time to engage in possibility thinking, it
will never happen.
The key is to make our thinking as transparent as possible.
As humans and as organizations, we tend to be very invested in what
we know to be true. We unconsciously seek to prove what we think is
right, and as a result we miss critical data that might indicate the
time has come to discard our outdated viewpoints. To unlearn, we
must constantly challenge what we know to be true, and then open our
thinking to new and different possibilities.
Taking assumption inventories on a regular basis will go a
long way toward building a sustainable competitive advantage for
your organization. Isn’t it about time you started doing some unlearning?
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Holly G. Green.
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