Weekly Business Idea

August 17, 2018 – Do You Know What You Are Assuming?

Posted on | August 17, 2018 | No Comments

Main Idea:

Do you know why you get the results you are getting?  Have you verified that your prices are at market price?  Are your employees happy?  Is your customer service outstanding?  What do your clients think? Do you have any areas of vulnerability?

Expansion of the Idea:

Every day we go to work thinking that the day will unfold one way and frequently it goes the complete opposite.  We end up with surprises in all areas of our businesses.  It could be a key employee, large customer or major supplier that surprises us.  Or it could be a new competitor or your computer system that crashes.   A lot of different things need to work the way you have designed them in order for the business to properly serve your customers, employees and yourself.

Small business owners generally like to think that they are in control of their lives.  They are in business for themselves because they did not like working for someone else.  They frequently didn’t like how their former employers handled situations and people.  As a result, they go into business to get control.  The ironic part is that they are not aware of how dependent they are on all sorts of things that are outside of their control.

When you are dependent on someone else, you are making some assumptions.  Some of the assumptions are pretty explicit such as:

  • Customers will continue to buy from you
  • You will be able to supply your customer’s needs
  • Your supplier will provide high quality goods
  • Your employees will show up for work
  • Your product or service is the best in your industry

The explicit assumptions are what small business owners worry about.  However, they don’t always think about the hidden or implicit assumptions such as:

  • Our computer systems are safe and secure.
  • Our products will not be made obsolete by new technologies, industries or competitors.
  • Our employees are able to give their best to the business.
  • Our systems work well.
  • Our systems work just as they were designed.
  • Our customers are delighted with our services.
  • I am managing the business well.
  • My employees are telling me what I need to know.

It is really important to identify hidden assumptions and to test them to see what the true answer is.  During World War II, Winston Churchill set up a separate department called the Statistical Branch or S Branch.  It was completely outside the normal chains of command and reported only to him.  It was the only way he could make sure that he got the unfiltered information that he needed to make decisions.  He wanted to minimize the effects of his assumptions.

The same is true for our businesses.  We can take actions to reduce the assumptions or at a minimum to identify them.  That will help us in our decision making and allow us to be more proactive.  You may not be able to predict when a storm will knock out electricity to your business, but you can be proactive in making sure that your computers are working properly.  Anything we can do to improve our odds of success is worth pursuing.  You will strengthen your businesses as well as reduce some stress.

Questions to Ponder

  1. When was the last time you and your team did a SWOT analysis?
  2. Do you have a process for identifying hidden and explicit assumptions in your business?
  3. What can you do to test the assumptions?
  4. Who should be involved in brainstorming hidden assumptions?

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  • About

    These weekly ideas are brought to you by FitzGerald & FitzGerald P.C. For more information about how to use these ideas with your small business contact Tim FitzGerald at trfitz@fitz-net.com.