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Why are assumptions so important?

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Every potential business idea and project has a list of assumptions that must prove true for it to be a success. For example lets say you are a marketing manager for an industry-leading company and the company has decided that it needs a complete brand re-fresh. The  company hasn’t questioned the status quo in years, despite the competition aggressively innovating and stealing market share. It is now forced to address the competitive landscape and take an introspective look at what can and should be done differently to regain its position in the marketplace.

The decision has been made that it needs to re-brand itself  by running a fun hip marketing campaign, sprucing up the company logo and forming partnerships with high-profile companies in different industries that have mass-market appeal. The decision to go this direction is where the crucial aspect of assumptions comes in. For you, the marketing manager, it is helpful to know the assumptions that were made that led to this company-wide directional shift. Why are we assuming that our branding is the the issue?

Assumptions are a critical part that determine a projects fate. Assumptions are essentially the external conditions that must exist for a projects logic to be valid. They are the external forces that a company cannot directly influence.

One major assumption made in our example company is: “Our business is loosing market-share because of our brands perception”. Is this a valid assumption? It may very well be, the only way to know is to set up a structure to manage assumptions from the beginning.

Here is a three-step framework for managing assumptions:

1. Identify key assumptions in the beginning of a project. What conditions must exist to prove your logic on success? How will others cooperate? What else must happen for us to succeed?

2. Analyze and test the key assumptions. How important is this assumption to the project’s success or failure? How valid or probable is the assumption?

3. Act on the assumptions. Determine if it is a reasonable risk to take. What are some ways you can influence the assumptions? Who is in control of the assumption? Can you make the assumption irrelevant?

When you start a project make sure you list the assumptions that require it to be successful. This kind of strategic thinking opens your mind and deepens your understanding of all the possible variables that can impact your outcome.

What long-held assumption do you have concerning success? Simply clarifying them may help you decide if your basing everything off in-valid assumptions or, it can confirm you are headed in the right direction.

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Josh Hamilton

Josh Hamilton

Hungry, Determined and Motivated. These three words sum up my personal disposition. The key to strong business infrastructure is strong relationships. I seek to build long-term business relationships that transcend a simple monetary transaction. My aim has been, and will continue being, to establish very strong win-win relationships throughout my business journey. Opportunist and business creator. My experience lies in building business systems and concepts. My passion lies in motivating and inspiring others. I'm constantly reading and learning to maximize my value creating ability so that, I can achieve my overall goal of fostering substantial wealth for the Kingdom!

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