Uncertainty and risk in discovery driven planning

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I was recently fortunate enough to be teaching in a very interesting program for strategy consultants at IBM.  One of their senior leaders, an ex-BCG guy, pointed out to me that I really could use a picture to communicate the value of Discovery Driven Growth.  Here, therefore is his suggestion!  What it basically shows you is how uncertainty is brought down simultaneously with investment increasing so that you tie the level of investment you are making to the level of uncertainty you face.  Pretty interesting idea.

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20 Often-Fatal Assumptions

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I am often asked by corporations to give some illustrations of assumptions that have caused  more trouble than they had any right to in the development of new business plans.  Here, for your edification and amusement, are twenty of the ones that have popped up frequently and which have often led otherwise sensible new ventures astray:

 

  1. Other divisions in the company will be glad to help
  2. All we need is 5% market share!
  3. The firm will surely support the best strategy for our unit
  4. We will have no trouble attracting the right people to work on the project
  5. Competitors will roll over and play dead - or hey, maybe they won't notice your taking market share away from them
  6. Competitors are too...dumb, insignificant, small, unproven, badly capitalized or un-interesting...to worry about
  7. We can use the same key performance indicators in new markets that we use in existing markets (ditto for funding strategies, planning processes, reward systems...)
  8. Customers will buy it because it has these neat features!
  9. Customers won't feel that buying from us is risky
  10. Customers won't mind switching suppliers and will be happy to take on whatever work is involved
  11. We can create a compelling first-mover advantage (corollary:  we have to spend a lot to get in first and obtain significant market share so that we can protect our position)
  12. We can develop what we need on time and on budget
  13. It will sell itself!
  14. We will be able to hold our prices and gain market share
  15. There is no real competition for what we offer
  16. Joint venture and alliance partners, and our own suppliers, share our objectives
  17. We won't need to engage in training for suppliers, distributors or customers
  18. The technically superior product will triumph
  19. We can create new markets where there is no competition, quickly
  20. Our projections will be accurate

Have a look at your business plans for a new project and see if any of these little bombshells are lurking there - forewarned is forearmed!

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Interesting “innochat” on Twitter regarding Discovery Driven Planning

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A nice shout-out to Jose Briones for moderating an "innochat" on the subject of discovery diven planning.  You can see the slides he used to introduce the subject at this link:   Slideshare.   

I've been off the grid for a bit - trip to Ireland for the Senior Executive Program at the Irish Management Institute, the Microsoft CEO Summit the following week and in the last few days a "family heritage" trip with my parents and daughter. 

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Discovery Driven Planning for CIO’s

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In this blog Steve Miller notes that DDP can be a bridge between ‘searching’ activities and ‘planning’ activities and suggests how the idea could be imported to the world of IT. 

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IDEO’s Colin Raney on the ‘large market fallacy’

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This week, I’m here with a fantastic group of participants in Columbia’s Leading Strategic Growth and Change program, which I direct.  This morning’s presentation featured Colin Raney and Joe Gerber from design consultancy IDEO .  We had a great morning.  Colin and Joe described how IDEO works on design problems and how they use Discovery Driven Planning to model business designs just as they traditionally have modeled product designs.  Then, we engaged the whole class in an exercise to rethink Wiley’s “For Dummies” franchise.  It was energizing, fun and fresh!

During the course of our time with IDEO, Colin mentioned the “large market fallacy” which is a typical mistake that big companies make—thinking that the road to strategy nirvana is getting relatively small slices of huge markets.  It’s something we battle against all the time with big companies.  You can read more about Colin’s ideas on sizing markets in this Blog Post.

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