November 2008 Invalid Business Assumptions www.stankirkwood.com

Every day! Assumptions Copyright: www.stankirkwood.com 2008 We make hundreds of assumptions

The sun will rise in the east The shower will have hot water We will connect to the internet Assumptions Copyright: www.stankirkwood.com 2008

We don’t see our assumptions because events do not challenge them. Without realizing it our assumptions are strengthened every day. Assumptions Copyright: www.stankirkwood.com 2008

Assumptions are mental habits and serve a similar purpose to learning how to tie shoes. Initial Learning = much attention and slow More practice = less attention and faster speed Skilled = no attention and fastest speed Movement without thought can be a good thing – ask any athlete. Assumptions Copyright: www.stankirkwood.com 2008

Assumptions are mental habits and serve a similar purpose to learning how to tie shoes.

Initial Learning = much attention and slow

More practice = less attention and faster speed

Skilled = no attention and fastest speed

Movement without thought can be a good thing –

ask any athlete.

Assumptions are often referred to as something bad. Assumptions Copyright: www.stankirkwood.com 2008

If making assumptions is a bad thing then it follows that not making assumptions is a good thing. Assumptions Copyright: www.stankirkwood.com 2008

What would our lives be like if we didn’t make any assumptions? Assumptions Copyright: www.stankirkwood.com 2008

Every situation and condition would have to be thought through before making a decision or taking a step. How does that sound? No Assumptions Copyright: www.stankirkwood.com 2008

By making assumptions we relieve ourselves of the active thinking about events that almost always occur based upon our experiences. Assumptions are time savers… Assumptions Copyright: www.stankirkwood.com 2008

… until the assumption does not work in our favor. We are blind to our assumptions until things do not go according to plan. Assumptions Copyright: www.stankirkwood.com 2008

Then we look for what we missed and try to see how it could have gone differently. Quite often we discover an action we overlooked but did not recognize because we made an invalid assumption. Assumptions Copyright: www.stankirkwood.com 2008

This is especially true in business. Decisions based upon invalid assumptions can lead to disastrous results but we are blind to the assumptions until we see the results. And then it is too late. Assumptions Copyright: www.stankirkwood.com 2008

Business leaders are doomed to run in circles because they are using invalid assumptions without knowing it. Assumptions Copyright: www.stankirkwood.com 2008

Here is a partial list of Invalid Business Assumptions that are having an adverse effect on the performance of every company. Read through them and see which ones apply to your business. Probably most of them. Assumptions Copyright: www.stankirkwood.com 2008

I would like to know who is reading through my materials therefore I am only putting out this partial list. People tend not to comment on slideshows. Your cost is the time to request the complete list by sending an email to [email_address] * You won’t find this list any where else – it is original. * My contact with you will be limited to sending the complete presentation unless you wish me to respond to a question or ask my opinion about a business-related topic. If you elect to use this presentation I ask that you leave the copyright banner on the bottom of each slide so those watching the slideshow become familiar with my name. Being Honest Copyright: www.stankirkwood.com 2008

This list of invalid assumptions hurting business performance falls into five categories. Goals Design Strategies Performance Alignment Assumptions Copyright: www.stankirkwood.com 2008

This list of invalid assumptions hurting business performance falls into five categories.

Goals

Design

Strategies

Performance

Alignment

Goals Assumptions Copyright: www.stankirkwood.com 2008

Thoughts around goals: Every management team sets goals Goals are used as a baseline to determine how well the business has performed Goals define and quantify the desired level of performance of a company Goals are used to motivate employees Goals Copyright: www.stankirkwood.com 2008

Thoughts around goals:

Every management team sets goals

Goals are used as a baseline to determine how

well the business has performed

Goals define and quantify the desired level of

performance of a company

Goals are used to motivate employees

1 st invalid assumption about Goals “ All goals are achievable” Because a goal is set does not mean it is attainable. Can your car go from 0 – 60 in 2 seconds just because you set the goal? Goals need to be SMART*. (Specific, Measurable, Attainable, Realistic, Time-based) Setting a goal that can not be attained is harmful. Wastes time, money and opportunity Assumptions around Goals Copyright: www.stankirkwood.com 2008

1 st invalid assumption about Goals

“ All goals are achievable”

Because a goal is set does not mean it is attainable.

Can your car go from 0 – 60 in 2 seconds just

because you set the goal?

Goals need to be SMART*.

(Specific, Measurable, Attainable, Realistic, Time-based)

Setting a goal that can not be attained is harmful.

Wastes time, money and opportunity

2 nd invalid assumption about Goals “ Goals are motivational to everyone” Goals can be motivational if you are in the position to influence the outcome. Unrealistic goals are de-motivating to employees. Goals are motivational when attainable and when the outcome has value. Assumptions around Goals Copyright: www.stankirkwood.com 2008

2 nd invalid assumption about Goals

“ Goals are motivational to everyone”

Goals can be motivational if you are in the

position to influence the outcome.

Unrealistic goals are de-motivating to

employees.

Goals are motivational when attainable and

when the outcome has value.

3 rd and 4th invalid assumptions about Goals are available in the complete presentation Assumptions around Goals Copyright: www.stankirkwood.com 2008

Design Assumptions Copyright: www.stankirkwood.com 2008

Thoughts around design: Business designs are invisible until they are documented Design dictates Performance Alignment can only be achieve by design Design has the greatest influence on the performance of a business, process or product Design Copyright: www.stankirkwood.com 2008

Thoughts around design:

Business designs are invisible until they are

documented

Design dictates Performance

Alignment can only be achieve by design

Design has the greatest influence on the

performance of a business, process or product

1 st invalid assumption about Design “ Improving information will improve the design of the business” Executives constantly fall into the trap of replacing IT systems and thinking it will result in better performance. Does changing your dashboard on your car change how fast it can go or how well it can maneuver? Better, faster information has value if you are designed to take advantage of the information. Assumptions around Design Copyright: www.stankirkwood.com 2008

1 st invalid assumption about Design

“ Improving information will improve the design of the business”

Executives constantly fall into the trap of replacing

IT systems and thinking it will result in better performance.

Does changing your dashboard on your car change how fast

it can go or how well it can maneuver?

Better, faster information has value if you are designed to

take advantage of the information.

2 nd invalid assumption about Design “ Optimizing pieces will optimize the whole” The aim of every business should be Total Business Performance Individually optimizing each piece/department leads to a dysfunctional organization Would you design anything by starting with separate parts and then try to force them fit together? Assumptions around Design Copyright: www.stankirkwood.com 2008

2 nd invalid assumption about Design

“ Optimizing pieces will optimize the whole”

The aim of every business should be Total Business

Performance

Individually optimizing each piece/department leads to a

dysfunctional organization

Would you design anything by starting with separate parts

and then try to force them fit together?

3 rd and 4th invalid assumptions about Design are available in the complete presentation Assumptions around Design Copyright: www.stankirkwood.com 2008

Strategy Assumptions Copyright: www.stankirkwood.com 2008

Thoughts around strategy: Strategies are how a company will achieve its goals Relationship between strategy and design Strategies influence design long term Design influences strategies short term Designs are implemented, strategies are executed Strategy Copyright: www.stankirkwood.com 2008

Thoughts around strategy:

Strategies are how a company will achieve its

goals

Relationship between strategy and design

Strategies influence design long term

Design influences strategies short term

Designs are implemented, strategies are executed

1 st invalid assumption about Strategy “ Strategies are strategies” Not all strategies are the same There are four different types of strategies Design Implementation Execution Management Each business, department and market needs its own strategic plan Assumptions around Strategy Copyright: www.stankirkwood.com 2008

1 st invalid assumption about Strategy

“ Strategies are strategies”

Not all strategies are the same

There are four different types of strategies

Design

Implementation

Execution

Management

Each business, department and market needs its

own strategic plan

2 nd invalid assumption about Strategy “ S trategies can be implemented” “ Strategic planning is easy, it is when it comes to implementation where it all falls apart.” CEO of consumer goods company Strategies are executed, designs are implemented Assumptions around Strategy Copyright: www.stankirkwood.com 2008

2 nd invalid assumption about Strategy

“ S trategies can be implemented”

“ Strategic planning is easy, it is when it

comes to implementation where it all falls

apart.”

CEO of consumer goods company

Strategies are executed, designs are implemented

3 rd and 4th invalid assumptions about Strategy are available in the complete presentation Assumptions around Strategy Copyright: www.stankirkwood.com 2008

Performance Assumptions Copyright: www.stankirkwood.com 2008

Thoughts around performance: Performance = Design x Execution A poor design can never result in good performance “ Performance by Design” www.businessdesignconcepts.com Design dictates Performance Performance issues can be traced back to one of three issues: Poor design Poor implementation of design Poor execution of design Performance Copyright: www.stankirkwood.com 2008

Thoughts around performance:

Performance = Design x Execution

A poor design can never result in good performance

“ Performance by Design”

www.businessdesignconcepts.com

Design dictates Performance

Performance issues can be traced back to one

of three issues:

Poor design

Poor implementation of design

Poor execution of design

1 st invalid assumption about Performance “ Performance problems are always execution problems” Executives can see execution problems and therefore invest most of their money in execution- related activities. First update your business design and then invest in execution-related activities Assumptions around Performance Copyright: www.stankirkwood.com 2008

1 st invalid assumption about Performance

“ Performance problems are always execution problems”

Executives can see execution problems and

therefore invest most of their money in execution-

related activities.

First update your business design and then

invest in execution-related activities

2 nd invalid assumption about Performance “ Activity = Accomplishment” Department of Defense: “ Don’t mistake activity for accomplishment” Executives hate to see people standing around. They would prefer to have them busy making parts they don’t need than to have them idle. Being busy does not mean much. You can be quickly going in the wrong direction. Copyright: www.stankirkwood.com 2008 Assumptions around Performance

2 nd invalid assumption about Performance

“ Activity = Accomplishment”

Department of Defense:

“ Don’t mistake activity for accomplishment”

Executives hate to see people standing around. They would

prefer to have them busy making parts they don’t need than

to have them idle.

Being busy does not mean much. You can be quickly going

in the wrong direction.

3 rd and 4th invalid assumptions about Performance are available in the complete presentation Assumptions around Performance Copyright: www.stankirkwood.com 2008

Alignment Assumptions Copyright: www.stankirkwood.com 2008

Thoughts around alignment: An aligned organization will outperform the competition Eliminates drag Reduces waste Clear roles and responsibilities Maximizes Performance Management efforts Alignment is the “Holy Grail” of business People talk about, refer to it but do not know how to do it Alignment is achievable and not that difficult when you know how to do it Alignment Copyright: www.stankirkwood.com 2008

Thoughts around alignment:

An aligned organization will outperform the

competition

Eliminates drag

Reduces waste

Clear roles and responsibilities

Maximizes Performance Management efforts

Alignment is the “Holy Grail” of business

People talk about, refer to it but do not know how to do it

Alignment is achievable and not that difficult when you know

how to do it

“ IT must be aligned with the business” This assumes there is one entity for IT to be aligned to “The business” is actually many small functions carrying on independently Alignment is something that needs to be designed into a business Copyright: www.stankirkwood.com 2008 Assumptions around Alignment

“ IT must be aligned with the business”

This assumes there is one entity for IT to

be aligned to

“The business” is actually many small

functions carrying on independently

Alignment is something that needs to be

designed into a business

2nd invalid assumption about Alignment is available in the complete presentation Copyright: www.stankirkwood.com 2008 Assumptions around Performance

For more information on Invalid Business Assumptions contact me by sending an email to skirkwood@gmail.com. I am available for presentations on various ideas surrounding business design Components of any business model Importance of process design How to design alignment into your organization Difference between strategy and design Invalid Business Assumptions Common Business Fundamentals Any sized organization in any industry Includes agencies and non-profit organizations Contact Me Copyright: www.stankirkwood.com 2008

For more information on Invalid Business Assumptions contact me by sending an email to skirkwood@gmail.com.

I am available for presentations on various ideas surrounding business design

Components of any business model

Importance of process design

How to design alignment into your organization

Difference between strategy and design

Invalid Business Assumptions

Common Business Fundamentals

Any sized organization in any industry

Includes agencies and non-profit organizations