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Discovery Driven Planning:  Not just for new businesses any more

The headlines are all around us – I just returned from a fascinating session in Seattle at the Microsoft Global Chief Information Officer summit to a pile of newspapers screaming “Washington Mutual Goes Under” and related stories.  Everyone, it seems, is shaking their heads in wonderment that so many smart people can have been so dreadfully wrong about so very many things. 

Which brings me to a bit of advice for you.  Virtually everyone reading this blog will be involved with businesses whose fundamental assumptions were created in a radically different economic era.  The net effect has been to dramatically increase the amount of uncertainty in which planning and resource allocation are taking place—not to mention in which strategies are being conceived and executed.  When uncertainty goes up, the benefits of checking and re-checking fundamental assumptions, being prepared to redirect the business and looking clearly at what the future might hold increase dramatically.  So humor me—as you think about the next six months of activity that you’re involved with, what are the fundamental assumptions you are making, and have you re-visited them since our entire financial landscape came crashing down around us?

Here are some good candidates for assumptions you might want to think really hard about:

Price.  We’ve already seen the consequences of rising raw materials prices on the costs of everything from bagels to basic supplies.  But are the pricing assumptions in your business also taking into account the fact that your customers may not be able to get the credit they need to pay your prices?  Or that they may not be able to assemble enough money in one lump to pay you up-front, or even when you submit your bills?  You may want to consider adopting new, flexible pricing programs in the event this is the case—for instance, perhaps instead of an outright purchase, a customer might be able to afford a lease or an installment purchase. 

Timing.  One thing we know about uncertainty is that people tend to ‘freeze in the headlights’ when confronted with it.  What does that mean practically?  Well, it mean that decisions you thought were going to take place soon are likely to take place later.  So you might want to give some thought to how you can help people to make commitments and decisions in a more timely way, if that’s important to your business.  You might consider thinking through the factors that would cause them to delay and how you might mitigate those.  For instance, if customers are worried that they’re paying peak prices, you might offer a money-back guarantee if prices fall within a specified timeframe.  Or if customers are worried about cash flow, you might offer to defer billing until they are feeling more secure.

Talent.  Any business strategy depends on talented people to deploy it.  But are you really thinking about the talent implications of current hard times?  Some of them might surprise you—for instance, if your best people are feeling insecure, they might jump at job opportunities offered by a competitor, just because they don’t know if they can count on you.  Likewise, you may be discovering that some of your medium-talented people are just not up to the challenges of such tough markets, creating the chance to replace them with high performers cut loose from organizations in trouble. 

Competition.  It sounds tough-hearted, but sometimes if you are better prepared than your competition, you can use their disarray or confusion to your advantage.  Have a strong balance sheet, good people and killer products?  Consider leveraging those advantages against competitors who may not have those attributes – or who are paralyzed by the uncertainty they are facing. 

If these ideas intrigue you, you might want to check out my upcoming program Leading Strategic Growth and Change which will be next be offered in November.  In it, we’ll be adapting the Discovery Driven Planning technique to take account of today’s tough times and show you how the principles that help drive growth under uncertainty can also be applied to core businesses newly facing uncertain times. 

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