Assumption hunters, a new consulting business?

Img_0307 What is the most vexing problem in management today?

Next to setting our objectives, running a tight ship and meeting our numbers, I would argue that it’s watching out for the blind side hit.

By blind side hit, I mean the kind of thing that Google did to Microsoft, that Barak did to Hillary, that hip hop did to Levi-Strauss, that Snapple did to Coca-Cola. 

Watching for blind side hits is difficult because it means knowing our assumptions.  And this is hard because assumptions are not for knowing, they are for making.  For instance, in the late 1980s, I don’t think anyone at Coke believed that a new brand could use the Mom and Pop corner store as a platform from which to stage an industry coup.  I mean, get real.  The Mom and Pop store was too small, too quirky, too amateur.  Right?  Wham!  By the time, Coca-Cola understand what had happened to it, Snapple had stolen a march on the market.

The trouble with assumptions is that they are by definition invisible from view.  (That’s why we call them "unknown unknowns.")  We hold ideas about the world without full awareness of what these ideas are or how they make us vulnerable. 

Oh, I hear a voice of skepticism.  Smart companies and gifted managers ferret these assumptions out.  I mean, isn’t that why we go to conferences?  Well, sometimes.  But did management find them soon enough?  And did management discover all of them.  Is there, somewhere out there on the far, invisible horizon, a tsunami headed our way?  Sorry, but the bad news these days is always and unequivocally, "yes."  Somewhere, way out there, there is an innovation that is eventually going to turn our business model upside down.  It’s not a question of whether, it’s just a question of when.

So what to do.  How about, for starters, this three step "assumption hunting" process? 

1) ferret out the assumptions.  Hire someone to go through the operation of daily business and capture every assumption.  Philosophers are quite good at this.  Anthropologists are very good at it.  This is after all the way they study culture, which is, by and large, a set of assumptions that helps us think and act fluidly precisely because we don’t know we are making them. 

2) identify the parts of the world that could present challenges. Figure out just what the challenge is and when and how it will "come ashore." 

3) Keep watch with a big board.  In effect, what we are doing is "sunsetting" our assumptions with a view to discovery when they reach they end of their useful lives. 

If I were Pine and/or Gilmore, I would write the book, get on the lecture tour, build the consulting company, and make a fortune.  But hey, reader, feel free.

Explanations

I took this photo with my iPhone, now equipped with a special feature (OS 1.1.7) that allows the camera to capture never-before-seen assumptions "on film."  This particular assumption is large and powerful, and we were lucky to bag it.  The boys in the lap are giving it a once over now.

Follow up

Those of you are wondering what happened yesterday when I was waiting for royalty at PJ Clarke’s in NYC.  Nothing.  But our guest didn’t show.  I guess if you’re royalty, you’re allowed.  Andrew Creighton (McCann Canada) and I took the opportunity to reinvent the universe over a couple of beers.      

12 thoughts on “Assumption hunters, a new consulting business?”

  1. Hey Grant, do you know of any Philosophy PhDs doing management consulting, or you just figure they could if they wanted to? 🙂

  2. It’s quite a paradox. Once you identify these “blind side” hits, they no longer become “blind side” hits. Yet that doesn’t stop new, unseen hits from coming your way. I’m not sure a company can create enough levees (as I switch to your wave/tsunami analogy), I think a company needs to become very good at nimbly redirecting the flood waters. Bail quicker than your competitors, or better yet, learn to ride the wave as it comes rushing to the shore.

    The error isn’t getting blind-sided. Reebok blind-sided Nike in the early/mid-80s, but Nike fought back. The error is not reacting properly. Apple stole the portable music market from Sony (anybody remember the Walkman?), but Sony didn’t/doesn’t seem to know how to get it back.

  3. I think Rick is on the right track here. Resilience beats anticipation in these situations. (Although some cases of blindness are so extreme that a firm almost has no sighted side. According to Fortune, I think, the CEO of Hertz was unaware of Enterprise’s existence until they started running national TV ads. Assumption: All important competitors must be focused at airports. Oops.)

    The problem with making explicit all our assumptions is that the list is infinite. That’s one of the big problems with top-down artificial intelligence–if you try to write down all the stuff that you, as a human being, assume when acting as an intelligent problem solver, you have a huge task. Everything from “big pills are harder to swallow” to “sick people want to get better” might be implicated at a pharmaceutical company, for example. Doug Lenat’s Cyc project is the closest thing to a brute-force approach to writing down commonsense knowledge, and they’ve been going at it since the mid-1980s without cracking the problem.

  4. I think there is also a distinction between be prepared for everything and being open to anything. If you try to prepare for everything you’ll eventually find yourself in a very small underground bunker waiting for the world to end. If you are open to all potentialities, you may become a very different, much more profitable company down the road. It would probably have been easier for Coke to think “what can we do with the Mom & Pop channel” than “what if a new competitor jumps up to challenge us via the Mom & Pop channel.”

    Looking at this problem from a different angle, what happens when the blind side hit comes not from a competitor, but from the consumer? How do you forsee and adapt to consumers appropriating your marketing slogans or using your products in completely unforseen ways, both positive and negative?

    None of this is to say you shouldn’t be on the look out, but I think today’s global marketplace and consumer empowerment calls for an adaptable, open-source model.

  5. I am glad to hear that my doctoral studies in philosophy may be helpful to my bottom line! Studying philosophy does make you question everything, and I hadn’t thought about it quite like this, but it does help you start to notice assumptions. In fact, I realize that much of my recent writing has been about uncovering assumptions and sloppy or unclear thinking. Nifty. Now if I could only get a gig as an “assumption hunter” life would be great! (Or greater than it already is, as I love my life).

    Cheers!
    Elizabeth

  6. I once had a telecommunications client whose senior management could not agree internally on the future market and technology shape of their marketplace. We presented a range of possible scenarios (depending on different assumptions regarding the evolulution of the main drivers), and tried to forge a consensus in the executive team. No consensus was possible. Perhaps, as indicated by the post and comments here, a consensus was not even desirable, since it may have led to being blind-sided if the future were to turn out differently to whatever scenario had been selected.

    So, we then tried business planning (the company was still in pre-launch mode) on the basis of two views of the future, not one. Let’s take each scenario, we said, and run it right through to the end, keeping both scenarios alive as far as we can. In other words, since we can’t agree on the future, let us not try, but let us keep different views in play. This was surprisingly easy, technically. Most of the technical, marketing and financial plans could be made robust to the two different scenarios, with lots of options kept in play right up to service launch, and some even beyond them. This approach would have been very robust.

    However, what caused trouble was not a technical or business planning issue, but a psychological one. Top management could not keep two views in play. Most of the people, some of whom were very bright and experienced, could not plan a business on two contradictory views of the future simultaneously. They could not do this even though the business was in planning mode, and would not be in operations for some years. Lower-level people had less of a problem with this, perhaps because they are used to working on things they don’t themselves believe or because they had less at stake in the outcome.

    So the big implementation challenges with the ideas suggested here about asumption-finding and assumption-challenging are, I think, more likely to be human-related rather than technical or intellectual.

  7. Off the top of my head, assumption hunting sounds a lot like the step in soft systems analysis at which people confronting what appears to be an intractable problem explore their mental models and try to situate them in relation to the loops that sustain the current predicament. This thought, which goes back at least to Peter Checkland and Jim Scholes’ Soft Systems Methodology in Action, has been developed at length by Peter Senghe in the Fifth Discipline and Fifth Discipline Handbook. Perhaps the place where exploring assumptions becomes most viable as a form of consulting is just after the blind side hit begins, when people begin to recognize that the world doesn’t agree with their expectations and may be ready to reexamine their assumptions. Then again, as I wrote on Best of the Blogs,

    “I am leafing through the February 2008 edition of Harvard Business Review, and there my wondering eyes behold “The Experience Trap” by Kishore Sengupta, Tarek K. Abdel-Hamid, and Luk N. Van Wassenhove. The authors studied experienced managers put in charge of complex software development projects. Their subtitle described what they found, “As projects get more complicated, managers stop learning from their experience.” Instead, they write,

    ‘managers find it difficult to move beyond the mental models that they have developed from their experiences in relatively simple environments or that have been passed on to them by others. When complications are introduced, they either ignore them or try to apply simple rules of thumb that work only in noncomplex situations. What they don’t do is materially improve the quality of their mental models to take into account the realities of complex projects.'”

    “Thus it is that people with experience in one environment so often fail so dramatically when confronted with complexity in another, changed environment. Thus, for example, while Lyndon Johnson knew a lot about Texas and George Bush may have known a little, the one was faced with Vietnam, the other with Iraq. The results were not, and have not been, pretty.”

  8. Great thread. When I read Peter’s comment, I found myself wishing for more detail–did the top guys explicitly say “I can’t take this double-vision thing, take it away!” or did they just unconsciously cling to one scenario and ignore the other one? The problem he mentions seems pretty important, since postponing decisions to capture “real” option value (when appropriate) has something of a cult following among certain finance-influenced management thinkers.

  9. Perhaps it is more a matter of maintaining balance. Even if we had access to the Oracle of Delphi could the oracle possibly explain all the possible permutations of a single random act in the time available to respond in an effective way. The blind side hit can sometimes be absorbed or even deflected by proper positioning and a balanced, flexible plan.
    It is impossible to foresee every eventuality, but it is possible to use some events to allow change to take place in a beneficial way. I like Mr.Liebling’s answer. Resilience and adaptability are probably the best answer.

  10. Responding to srp’s question:

    The top people on both sides of the debate expressed lots of grumbles about having to think everything through twice, with some asking for the CEO to make an “executive decision” for one scenario or the other. Eventually he did — perhaps after being lobbied privately by some members of his team. But the people whose scenario was discarded were never happy with the CEO’s decision, and continued to voice their opposition.

    Essentially, the two scenarios were a mass market offering (same service for everybody) versus a portfolio of segment-specific offerings. Similar in some sense to the (apparent) difference between the Obama strategy and the Penn-influenced Clinton one.

  11. Assumption hunting has been part of my assignment for two years. I’m in the midst of an organization that has hired a change management consultant, invited the “Blue Ocean” folks to talk, declared a “burning platform” and is in search of a “new model.”
    With a strong effort to identify the assumptions of our current and potential future customers some progress has been made. The analytic has been mostly psychological, somewhat anthropological but definitely not not philosophical (sorry Elizabeth). Despite strong messaging from Sr. Management, and considerable investment of resources (money and people) – the direction that the assessment suggests has not gotten much traction from the residents of the “C” suites. It’s one thing to acknowledge that mental models keep us from seeing what’s “what our customers really need” and quite something else to act in a manner that would redirect (but not completely transform) a company of significant size. Let’s not forget the key assumptions of incumbent executives (I simply can’t call them “leaders”) about their own managerial power, prowess and financial success focus on everything that came before, and not on what the future will bring.

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