Assumptions in innovation
When working on innovation, you have to deal with many unknowns. You might not know your customers yet, use new technologies, or entering a whole new market.
Assuming that a consumer wants your products results in spending a lot of time and money in developing a product that no one might be interested in. Relying on the wrong assumptions could be fatal for your business. That is why in innovation, you are very aware of your assumptions. Testing and validating these assumptions is key to reducing risk and building confidence in your ideas step by step. That is what assumption-based strategy is about.
What is assumption-based strategy?
Dealing with both an increased level of uncertainty and an overwhelming amount of information, requires a different approach on strategy. One that helps you to navigate this uncertainty and weed through the noise. This is where assumptions play a key role. The goal of assumption-based strategy is to identify opportunities and risks in the current strategy and make predictions about the future that fuels the company's strategic decision-making and planning.
Another factor driving complexity is today's information-rich environment. We are easily overwhelmed and distracted by the sheer amount of information that is available. This is particularly true in fields such as business, finance, and technology, where new information is constantly being generated. Dealing with all this data can be a challenging task, but it is essential to make informed decisions and stay ahead of the competition.
Spotting critical assumptions in your strategy allows you to weed through the noise and focus on the things that are most important to your business. Assumptions can be everywhere in your strategy, from areas like market trends, consumer behavior, market growth, and the performance of competitors.