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Assumption-Based Planning: A Tool for Reducing Avoidable Surprises by James A. Dewar. Cambridge University Press. 2002. 216 pages. Paperback. Check price/buy book.
Improving Planning in the Real World
Reviewed by Kenneth Harris
Strategic planner James A. Dewar is director of RAND's Frederick S. Pardee Center for Longer Range Global Policy and the Future Human Condition. In recent years, he has led the development and application of the concept of assumption-based planning (ABP), and in his new book, Assumption-Based Planning, he provides a careful but engaging explanation of how this type of planning works.
Assumption-based planning has five basic steps:
- List all assumptions in the plan.
- Identify load-bearing vulnerable assumptions.
- Create signposts.
- Take shaping actions.
- Take hedging actions.
Dewar illustrates the five steps with flow diagrams throughout the book. The example of a little girl planning in January to open a lemonade stand one weekend in June effectively drives home how to do ABP and adds a light touch to the book.
Readers are likely to agree that the implicit assumptions in a plan--those so integral to the organization’s wisdom that nobody bothers to state them--can be the most critical. What they are likely to find startling is the exhaustive treatment of identifying and categorizing assumptions. They might very well on a good day do exactly what Dewar recommends without using ABP, but using ABP assures more good days.
A load-bearing assumption is one whose failure would require significant changes in an organization’s plan. Dewar emphasizes that failure of an assumption can be favorable, as well as adverse (e.g., a company achieves 50%, instead of a planned 20%, increase in market share in five years).
A vulnerable assumption is one that could be overturned by plausible future events within the expected lifetime of the plan. Dewar suggests several imaginative ways to identify these assumptions. For example, the Rip Van Winkle technique asks a client to imagine he or she has been asleep for 20 years and may ask only 10 yes-or-no questions about the organization’s current operations. Particularly if done by a group, this technique helps reveal the greatest uncertainties in a plan.
A signpost is an event or threshold that shows an important change in the validity or vulnerability of an assumption. To identify signposts, start with the vulnerability of an assumption, imagine a path along which the assumption could fail, and look for unique, unmistakable identifiers of that path. These identifiers are signposts. This approach is much like environmental scanning to see which one of various scenarios developed in scenario planning is actually evolving.
A shaping action is an organizational action in the current planning cycle to control the vulnerability of a load-bearing assumption. For example, a company could acquire a competitor to prevent it from taking market share.
A hedging action is an action in the current planning cycle to prepare an organization for the failure of one of its load-bearing assumptions. For example, a manufacturer could simultaneously develop two technologies to achieve the same goal to assure having one that will work. Once one is proven, development of the other can stop. Hedging actions may be difficult to market because they are costly and don’t contribute directly to the success of the plan, but they offer decision makers several advantages, including reduced anxiety and avoidance of later regret. Dewar contrasts the use of scenarios in designing hedging actions with the use of scenarios in scenario planning. In the former case, scenarios provide an overall context within which to construct a plan; in the latter, they highlight circumstances causing potential plan failures that necessitate hedging actions.
Planners who use ABP can take comfort in its realism. The author and his associates have battle tested it in real-life planning for the U.S. Army and private clients over many years. The final two chapters discuss the art of applying it effectively, as well as when and when not to apply it. Dewar doesn’t claim that ABP is superior to or should supplant previous planning methodologies.
After selling a client on an ABP exercise and carrying it out, the consultant should be in a superior position to assist the client in future planning cycles as well as making a vision of the future relevant for client action. The detailed knowledge gained in ABP should permit the development of ever more relevant scenarios for scenario planning and thus more robust plans.
Assumption-Based Planning is intended for practicing planners (and students of planning). As a tool for that specialized audience, the book largely succeeds, though it may have had more value if it used case studies to document how successfully various practitioners have been in using these methods.
About the Reviewer
Kenneth W. Harris is secretary-treasurer of the World Future Society.
[Reviewed in THE FUTURIST September-October 2003]
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