Join Rita's Mailing List!

Blog

Discovery Driven Planning:  Different from conventional planning

Discovery Driven Planning was developed because years of research showed that companies using conventional planning methods to invest in new opportunities were systematically failing.  When we researched the reasons, we found that conventional planning leads to systematically poor decision-making in a new venture, or other uncertain situation.  With a conventional plan, projections are made based on whatever is known at the time, and the metric for the worth of the plan is how close actual outcomes came to projections.  When you think about it, this is crazy, because when you have very little knowledge about a situation, the primary objective should be to learn.  Instead, conventional plans lead people to blind themselves to emerging realities, desperately trying to make a flawed plan happen as they had anticipated. 

The fundamental thing to remember when you are venturing into uncertain territory is that your ratio of assumptions that you have to make to knowledge that you have is quite high.  Human beings are terrible processors of assumptions!  First, we tend to forget them.  Indeed, research conducted by Russ Ackoff, who was at the University of Pennsylvania at the time, found that in an average company the length of time required to forget half the assumptions underlying an important decision was about 6 weeks. 

As if forgetting assumptions wasn’t bad enough, we also have a host of cognitive and emotional biases which lead us to systematically disregard potentially important information.  One is the “confirmation bias” which leads us to accept and embrace data that confirms what we believe to be true, while rejecting new information that challenges our beliefs.  Another is bias that is introduced because we don’t want to look bad in front of colleagues, supervisors and subordinates.  In combination, they lead people to continue down doomed venturing pathways in a fruitless effort to prove themselves right.  Indeed, when you look at the great, big, historic flops in the venturing world (we’re talking WebVan at a $1.5 billion writeoff, or the AOL-Time Warner merger) what you see is a common pattern:

  • untested assumptions
  • taken as facts
  • no opportunities for redirection
  • few low-commitment tests of assumptions
  • investment all at once, not sequenced
  • pressure in terms of time or resources on the venturing team
  • all or nothing outcomes

What Discovery Driven planning does instead is recognize that in a fundamentally uncertain situation, you aren’t right.  The goal is to do as much learning as you can while spending as few resources as you can to eventually figure out the right answer—or else to stop the project while it is still inexpensive.  The watchwords are, “fail fast, fail cheap, move on” as they say in Silicon Valley.  The technique also overcomes some of the social problems of conventional planning in that all participants in the plan give their best effort and ideas.  It’s “our” plan, not “my” plan.  The real emphasis is on learning as you go.  The whole plan is driven, therefore, by narrowing the assumption: knowledge gap as the plan unfolds. 

The original 1995 article describing the Discovery Driven Planning technique is available here.  See further posts for more information on the technique itself. 

Filed In:

No Comments