Invalid Business Assumptions

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November 2008

Invalid Business

Assumptions

www.stankirkwood.com

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Every day!

Assumptions

Copyright: www.stankirkwood.com 2008

We make hundreds of assumptions

http://www.stankirkwood.com/

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The sun will rise in the east

The shower will have hot water

We will connect to the internet

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We don’t see our assumptions because events do not challenge them.

Without realizing it our assumptions are strengthened every day.

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Assumptions are mental habits and serve a similar purpose to learning how to tie shoes.

• Initial Learning = much attention and slow • More practice = less attention and faster speed• Skilled = no attention and fastest speed

Movement without thought can be a good thing –

ask any athlete.

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Assumptions are often referred to as something bad.

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If making assumptions is a bad thing then it follows that not making assumptions is a good thing.

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What would our lives be like if we didn’t make any assumptions?

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Every situation and condition would have to be thought through before making a decision or taking a step.

How does that sound?

No Assumptions



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By making assumptions we relieve ourselves of the active thinking about events that almost always occur based upon our experiences.

Assumptions are time savers…

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… until the assumption does not work in our favor.

We are blind to our assumptions until things do not go according to plan.

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Then we look for what we missed and try to see how it could have gone differently.

Quite often we discover an action we overlooked but did not recognize because we made an invalid assumption.

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This is especially true in business.

Decisions based upon invalid assumptions can lead to disastrous results but we are blind to the assumptions until we see the results.

And then it is too late.

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Business leaders are doomed to run in circles because they are using invalid assumptions without knowing it.

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Here is a partial list of Invalid Business Assumptions that are having an adverse effect on the performance of every company.

Read through them and see which ones apply to your business. Probably most of them.

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I would like to know who is reading through my materials therefore I am only putting out this partial list. People tend not to comment on slideshows. Your cost is the time to request the complete list by sending an email to [email protected] *

You won’t find this list any where else – it is original.

* My contact with you will be limited to sending the complete presentation unless you wish me to respond to a question or ask my opinion about a business-related topic. If you elect to use this presentation I ask that you leave the copyright banner on the bottom of each slide so those watching the slideshow become familiar with my name.

Being Honest


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This list of invalid assumptions hurting business performance falls into five categories.

• Goals

• Design

• Strategies

• Performance

• Alignment

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Goals

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Thoughts around goals:

• Every management team sets goals

• Goals are used as a baseline to determine how

well the business has performed • Goals define and quantify the desired level of

performance of a company• Goals are used to motivate employees

Goals



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1st invalid assumption about Goals

“All goals are achievable”

• Because a goal is set does not mean it is attainable.– Can your car go from 0 – 60 in 2 seconds just

because you set the goal?

• Goals need to be SMART*. – (Specific, Measurable, Attainable, Realistic, Time-based)

• Setting a goal that can not be attained is harmful.– Wastes time, money and opportunity

Assumptions around Goals



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2nd invalid assumption about Goals

“Goals are motivational to everyone”

• Goals can be motivational if you are in the

position to influence the outcome.• Unrealistic goals are de-motivating to

employees.• Goals are motivational when attainable and

when the outcome has value.




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3rd and 4th invalid assumptions about Goals are available in the complete presentation



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Design

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Thoughts around design:

• Business designs are invisible until they are

documented• Design dictates Performance• Alignment can only be achieve by design• Design has the greatest influence on the

performance of a business, process or product

Design



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1st invalid assumption about Design

“Improving information will improve the design of the business”

• Executives constantly fall into the trap of replacing IT systems and thinking it will result in better performance.• Does changing your dashboard on your car change how fast it can go or how well it can maneuver?• Better, faster information has value if you are designed to take advantage of the information.

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2nd invalid assumption about Design

“Optimizing pieces will optimize the whole”

• The aim of every business should be Total Business

Performance• Individually optimizing each piece/department leads to a

dysfunctional organization• Would you design anything by starting with separate parts

and then try to force them fit together?




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3rd and 4th invalid assumptions about Design are available in the complete presentation



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Strategy

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Thoughts around strategy:

• Strategies are how a company will achieve its

goals• Relationship between strategy and design

– Strategies influence design long term– Design influences strategies short term

• Designs are implemented, strategies are executed

Strategy



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1st invalid assumption about Strategy

“Strategies are strategies”

• Not all strategies are the same • There are four different types of strategies

– Design– Implementation– Execution– Management

• Each business, department and market needs its own strategic plan

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2nd invalid assumption about Strategy

“Strategies can be implemented”

• “Strategic planning is easy, it is when it

comes to implementation where it all falls

apart.”– CEO of consumer goods company – Strategies are executed, designs are implemented




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3rd and 4th invalid assumptions about Strategy are available in the complete presentation



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Performance

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Thoughts around performance:

• Performance = Design x Execution

• A poor design can never result in good performance • “Performance by Design”

– www.businessdesignconcepts.com

• Design dictates Performance• Performance issues can be traced back to one

of three issues:– Poor design– Poor implementation of design

– Poor execution of design

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1st invalid assumption about Performance

“Performance problems are always execution problems”

• Executives can see execution problems and

therefore invest most of their money in execution-

related activities.• First update your business design and then

invest in execution-related activities

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2nd invalid assumption about Performance

“Activity = Accomplishment”

• Department of Defense: –“Don’t mistake activity for accomplishment”

• Executives hate to see people standing around. They would prefer to have them busy making parts they don’t need than to have them idle.• Being busy does not mean much. You can be quickly going in the wrong direction.




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3rd and 4th invalid assumptions about Performance are available in the complete presentation



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Alignment

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Thoughts around alignment:

• An aligned organization will outperform the

competition– Eliminates drag– Reduces waste– Clear roles and responsibilities– Maximizes Performance Management efforts

• Alignment is the “Holy Grail” of business– People talk about, refer to it but do not know how to do it– Alignment is achievable and not that difficult when you know

how to do it

Alignment


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“IT must be aligned with the business”

• This assumes there is one entity for IT to

be aligned to

• “The business” is actually many small

functions carrying on independently

• Alignment is something that needs to be

designed into a business


Assumptions around Alignment


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2nd invalid assumption about Alignment is available in the complete presentation

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For more information on Invalid Business Assumptions contact me by sending an email to [email protected].

I am available for presentations on various ideas surrounding business design• Components of any business model• Importance of process design• How to design alignment into your organization• Difference between strategy and design• Invalid Business Assumptions• Common Business Fundamentals

– Any sized organization in any industry– Includes agencies and non-profit organizations

Contact Me

