Thursday, March 28, 2013

Strategy - the Importance of the Hypothesis

By Pascal Dennis

I'm often asked, "In writing my strategy A3, why do we need to develop a hypothesis?"

Why indeed?

Hypotheses are difficult to formulate. They're time-consuming and risky in that they leave you open to question.

("Why did you think that?"). Hypotheses are humbling.

Why not just write down your understanding of the strategic problem, and what you intend to do about it?

Because you thereby hinder your learning.

The hypothesis is a binary test of your grasp of the situation.

Do I really understand what's going on?

With each spin of the PDCA cycle, you learn more about the black box called 'your business'.

You learn what works, what doesn't work - and why.

You learn to hedge your bets with quick, controlled experiments. You develop metrics that give you the early warning that a hypothesis is working, or not.

After several years you develop profound knowledge, and if your lucky, you learn how to learn.

And that, to paraphrase Hemingway, is a moveable feast.




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