Why such massive losses? Too many firms use conventional planning to manage their ventures, say McGrath and MacMillan. They make predictions about a venture's potential based on their established businesses. And they treat the assumptions underlying those predictions-- "The product will sell itself," "We'll have no competitors"--as facts. By the time they realize a key assumption was flawed, it's too late to stanch the bleeding.
How to avoid this scenario? As your venture unfolds, use a disciplined process to systematically uncover, test, and (if necessary) revise the assumptions behind your venture's plan. You'll expose the make-or-break uncertainties common to ventures. And you'll address those uncertainties at the lowest possible cost--so you don't set your venture on the path to ruin."
Read the entire article here.
- Posted: Monday, November 26, 2007
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