Reining in the Biz Ops brain: take control of your Assumptions
Reining in the Biz Ops brain: take control of your Assumptions
How to identify and test the Assumptions that might flip your (business) cart
The Strategy and Biz Ops Hub uncovers the the way to, and the way not to, build your Biz Ops function. This week I focus on how to be effective in launching Biz Ops projects, by focusing your time on evaluating the right pieces of information.
You have probably heard of Daniel Kahneman's "Thinking, Fast and Slow", but chances are you may not have heard of Marvin Minsky. He was a pioneer in the field of Artificial Intelligence and a co-founder of the Massachusetts Institute of Technology's Media Lab. He has done more for Behavioural Economics he gets credit for. In his 2006 book “The Emotion Machine”, Minsky presents the idea that emotions are not separate from rational thought, but are deeply integrated into our cognitive processes. Emotions serve purposes, like focusing attention, setting priorities, and aiding decision-making. They can be seen as high-level summaries of cognitive appraisals and evaluations. He shows a positive side of our “biases.” Biases are simply cognitive shortcuts.
In Business, we exhibit some cognitive shortcuts on a daily basis: like confirmation bias and the escalation of commitment. The former involves prioritizing confirming evidence over disconfirming evidence, often leading to skewed perspectives. The latter means that the more we invest in an idea, the more committed we become to it, sometimes regardless of its flaws. Companies are vulnerable to these biases, excuse me, “cognitive shortcuts,” due to people’s emotional underpinning of their initiatives. Like it or not we are Emotion Machines.
But wait, life is not so pre-deterministic.
Chip and Dan Heath, in "Decisive", suggest that being open to the possibility of being wrong can counteract “cognitive shortcuts.” Biz Ops exists to stop the opinions flying around, and bring analytical strength to any decision significant enough to hit our desk. But we need to reign in our own mental shortcuts.
The Hunt for the 1) Assumptions
Let’s start with what assumptions are important to Biz Ops. If we are considering entering a new market for example:
Viability Assumptions:
If the initiative benefits the business (be that revenue, saving, brand image or something else that we can measure).
If it creates a sufficient return on investment, over the course of buying, (and/or) building, servicing, and maintaining over a specific time frame.
Desirability Assumptions:
Whether customers will want our product & solution in its current form. Or would we have to amend in some way?
If customers see value in it and are willing to pay.
If they are capable and willing to pay at the level we need.
If they trust us to provide the solution.
Feasibility Assumptions:
Gauge technical possibility: "Can it be done?" Does the tech we need exist?
Does this initiative clear legal and/or regulatory requirements?
Will our culture embrace this change?
Are there any security constraints?
Are there data collection, storage, and usage practices we need to consider?
Adoptability Assumptions:
User-friendliness to our teams: how much training would we need to do? how intuitive would it be to work with the solution?
Comms: Whether we have the internal channels to use to give it the right level of spotlight.
Momentum: if employees can readily understand the why, what and how of the initiative.
2) Journey Mapping - your Initiatives
You should journey map both the external customers’ experience with your company, and the internal employees’ experience pushing through the full completion of the initiative. For example, if you are launching this new Partner motion, you should do two maps: 1) of the Partner approaching you, signing with you, and maintaining the relationship with your company; and 2) the internal teams’ flow of work to complete work on a Partner relationship through their full life cycle - from Marketing’s PMM partner work, to Channel Sales signing them, to Product updating them on what’s new on the product.
Start: Assume the solution already exists.
Identify Key Actors: Understand who interacts with whom. Don’t forget all parties a part of interactions and any tools.
Map Steps: Document every action each actor takes to derive value from the solution.
Sequence: Arrange steps in chronological order, including any optional steps.
You could end up with something like this for the detailed look of the Quote-to-cash process for serving a Partner.
Putting 1 & 2 together
Gather your extended team around a (virtual) whiteboard, and a matcha, and interrogate that map. You should probably have people from engineering, product, sales, marketing, legal. Onto these strategic Journey Maps create a roll for each type of Assumption, and start brainstorming. You will identify Desirability (user wants), Feasibility (technical capability), and Adoptability (user capability) assumptions. By dissecting each step, you can uncover multiple assumptions. Going back to the example of the QtC process, here is an excerpt:
For the Viability assumptions, you should go back to some good old excel modelling, and market research. You should also ask yourself, why you believe the Initiative ties to the desired company outcome. How does it address a particular business need?
Let’s pause.
I am sure you’ve been reading this and thinking, yeah ok great little technique. But so what?
If you are like me, leading a small but mighty Biz Ops department, you have no time to develop massive strategy docs based on extensively researched evidence about TAM, Competition, Market Trends, Market Benchmarks and so forth. This is why the big companies get the McKinseys of the world - to go and quantify just that. It is for companies for which 3% growth YoY moves share prices. If you are in a growing start up, you need many multiples of 3% YoY growth to just ensure you survive. Focusing on the big opportunities for growth, vs comparing medium 1 to medium 2, is what moves the needle. Here is how to get to the big stuff fast.
What we do then is…. 🥁🥁🥁🥁🥁🥁
Evaluate the Assumptions
Why: it's essential to determine which assumptions need testing the most: You need to identify which boulder would flip the cart, not which pebble will get stuck in the wheels.
What: the 2x2 Assumptions grid: Created by David J. Bland, the technique helps to identify "leap of faith" assumptions, which carry the most risk. Assumptions are evaluated on two dimensions:
Evidence Level: Asses how much you know about the Assumption. If there's plenty of evidence supporting it, place it on the left of the X-axis; with little evidence, on the right.
Importance to the Initiative: While all assumptions matter, some are more crucial than others. Assumptions harder to work around are considered more vital and are placed higher on the Y-axis, while less critical ones are placed lower.
How: we evaluate their Relative Positioning on the grid:
Assumptions are placed on the two-dimensional grid based on evidence and importance.
The placement doesn't need to be precise; the goal is to map assumptions relative to each other. If you have enough many smart and experienced people in the room, chances are you are 80% there. It’s a simple process: compare the evidence and importance of the one assumption to another and place it on the grid accordingly.
What matters is speed over precision. Teams often achieve similar outcomes whether they speed through the exercise or take their time deliberating every placement. So, it's advised to save time and move quickly. Don’t overthink. The thing to watch for is to not clump all assumptions all as “highly important.” This is counterproductive. Some teams might perceive all assumptions as highly important with weak evidence. This is alright as a first step, but force a relative positioning to one another to prioritise.
We then test the “leap of faith” assumptions.
After mapping, focus on testing assumptions in the upper-right corner. These represent high-importance assumptions with little evidence. Those carry the biggest risk. Choose 2-3 and do more homework on those.
This grid is something I can’t show you because, well, secret. But what happens from here is you can test the assumptions that would otherwise flip your cart. Once tested and either confirmed or discarded as threats or opportunities, you get a full picture of what you should do. And launch your project with the confidence that it will work!
To continue the conversation, connect with me here: https://www.linkedin.com/in/vessclewley/