Processes such as agile and lean are designed to remove as many assumptions from development as possible. With an exponential increase in the quantity of available data, applying that data in the service of challenging assump-tions (particularly the hidden, or ‘toxic’, assumpassump-tions that go unquestioned) is an essential requirement in helping the agile business get to the outcomes it desires. If, alongside this, we are tracking back from our vision of the future in order to reimagine our present priorities (rather than extrapolat-ing from a past which may be defined by out-of-date assumptions) then we have a more solid basis for crafting our agile strategy. But there are times, such as when we are entering new or poorly defined areas, when the ratio of assumptions we are forced to incorporate relative to the knowledge we already possess is likely to be unusually high. Emergent, iterative strategy and planning helps to mitigate risk, but it is still critical to identify as many avoidable, or hidden, assumptions as possible.
Rita Gunther McGrath’s discovery-driven planning22 is a useful concept that forces you to identify a desired outcome, and then ask what needs to be true in order for that outcome to happen. Conventional planning is based on a premise that future results can be accurately extrapolated from the predict-able platform of past results and so may be useful in a stpredict-able, incremental or known scenario. Discovery-driven planning focuses on establishing the key truths that are needed for an outcome to be achieved and so is much more useful for those ventures that are new, more unknown, or characterized by a greater degree of uncertainty.
McGrath uses a great case study to illustrate the folly of using conven-tional planning techniques for a new venture – the launch of Euro Disney Resort (what is now Disneyland Paris). The launch in 1992 was something of a disaster, with numbers of visitor-days falling far short of expectations.
Two years after launch it had accumulated losses of more than US$1 billion and only achieved its target of 11 million admissions after a drastic drop in ticket prices.
In the planning process Disney had used assumptions based on their extensive knowledge derived from their experience running parks in other parts of the world (United States and Japan). There were some pretty big assumptions around the admissions price that punters would be prepared to pay, how European customers would want to eat, and the type of merchan-dise they would buy. But the really punishing assumption was that (based on their experience in other markets) they had assumed that people would stay an average of four days in the park’s hotels. And yet the average stay in
the early days was only two days. Euro Disney opened with only 15 rides, compared with 45 at Walt Disney World. People could do all the rides in a single day and so had little reason to stay longer.
In order to avoid such outcomes, McGrath defines a number of disciplines including: specifying a clear frame for the project (including quantifiable goals); the importance of basing plans in market and competitive reality; to translate strategy into specific, implementable actions (working backwards from what you have to deliver); to document, test and revisit assumptions;
and finally planning to learn at key milestones.
In discovery driven plans, the whole plan is organized around converting the maximum number of assumptions to knowledge at minimum cost.
As the novelist E L Doctorow once said:
Writing a novel is like driving a car at night. You can see only as far as your headlights, but you can make the whole trip that way.
With discovery-driven planning we have enough knowledge to plan in detail to the next major milestone but not beyond it, so the key is to test assump-tions as you go at key milestones. Much like agile and lean, this approach is motivating, giving people freedom to test and learn rather than shouldering them with an obligation to justify divergence from a flawed original plan.
The key question to always ask: What needs to be true in order for this outcome to be achieved? This form of emergent strategy has never been more appropriate than it is today.
notes
1 Richard Rumelt (9 June 2011) Good Strategy/Bad Strategy: The difference and why it matters, Profile Books, ISBN-10 184765746X ISBN-13 978-1847657466
2 Roger Martin (21 January 2015) Roger Martin’s Unconventional Wisdom, Bridgespan Group, [Online] http://www.bridgespan.org/publications-and-tools/strategy-development/roger-martins-unconventional-wisdom.aspx#.
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3 Roger Martin (21 January 2015) Roger Martin’s Unconventional Wisdom, Bridgespan Group, [Online] http://www.bridgespan.org/publications-and-tools/strategy-development/roger-martins-unconventional-wisdom.aspx#.
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4 Roger Martin (21 January 2015) Roger Martin’s Unconventional Wisdom, Bridgespan Group, [Online] http://www.bridgespan.org/publications-and-tools/strategy-development/roger-martins-unconventional-wisdom.aspx#.
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5 Richard Rumelt (9 June 2011) Good Strategy/Bad Strategy: The difference and why it matters, Profile Books, ISBN-10 184765746X ISBN-13 978-1847657466
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