Exiting college, people told me I needed a good strategy: a strategy for networking, for my career, for investments. Despite my bravado, I knew deep inside I was just guessing.
It was uncomfortable.
I find it’s the same for organizations. CEOs, boards, and leadership teams driving high stakes strategies are often placing big bets — and though they know they need a good strategy, they realize they don’t have all the answers.
Whether you’re introducing a new program or offering, entering a new market, changing suppliers, making an acquisition, or launching a new organization — there are a lot of unknowns.
And a lot of guessing.
It can be uncomfortable.
But I came across a simple test that can help.
Clay Christensen was an innovation expert, entrepreneur, and Harvard B-school professor. He was also a man of faith humble enough to realize there was a LOT he didn’t know.
Christensen recommended this test for a new strategy: “What has to prove true for this to work?”
“As simple as it sounds, companies seldom think about whether to pursue new opportunities by asking this question. By the time they have learned which assumptions were right and which ones were wrong, they’re too far down the road to do anything about it.” ( Christensen Allworth Dillon 2012 How Will You Measure Your Life)
Here’s the three-step approach to apply the test:
1. List the most important OUTCOMES you are expecting from your new strategy. Get specific. You may want to serve a new market, and the important outcome is “growth” – but how much growth? When? Are you willing to lose money for it?
2. Identify the ASSUMPTIONS you’re making that would result in the most important outcomes. Are you assuming your new market knows they need your offering? Or that they will need the same level of support as your current market?
(Caution: Sometimes big assumptions are buried deep in an analyst’s business case spreadsheet and you don’t even realize you’re making them: e.g. length of sales cycles and time to revenue, material and sales costs, customer retention rates.)
3. Ask: “WHICH of these assumptions MUST prove true for this outcome to happen”? Rank your assumptions in terms of their impact. If you need revenue quickly, the length of the sales cycle is a big assumption.
Then find quick inexpensive ways to validate your assumptions. Start with ASKING QUESTIONS of customers and those who work with them the most. And LISTENING humbly.
HERE’S THE RESULT: If your biggest assumptions are likely to prove true, your strategy is more likely to succeed. You can de-risk your strategy and align your team.
And lead a little more comfortably.
(Even when you’re just guessing:)
(If you’d like to explore how to systematically uncover the hidden risks of your own new strategy and how you can get results faster, let’s talk. Your mission is too important to get derailed.)
Susan Schramm, Founder and Principal, Go to Market Impact LLC susan.schramm@gotomarketimpact.com
