May 2022     Edition 163
Five Critical Thinking Tools for Planning
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Planning is thinking about the future. 

You plan for your financial, medical, business, and personal future, even as simple as a grocery store visit with a list of items you need to buy.  You plan out projects at work and at home.   Sometimes the plan is created on the fly, sometimes it
s a process.  

 

Five useful critical thinking tools you can use for every type of plan is
Assumptions
,
Why
,
Anticipatory Thinking
,
What If
and
Preeminent Metrics
.

 

Here

s the Steps:

  • You make
    Assumptions
    about the future.   In finance, you might make assumptions about inflation and interest rates.   In Sales you make assumptions about what your customers might order.   In marketing you make assumptions about what might attract new customers.  We make assumptions about the restaurants we might go to, about the weather, about our job. 


  • Once you are clear on the assumptions you
    re making, ask
    Why
    you
    re making those assumptions.   For example, why would you assume interest rates will go up over the next 18 months?  Well, the federal reserve has pretty much announced that intention.  That doesn
    t mean it will happen, but given inflation, it probably will.   Why would you assume your customer will put in a big order?  Maybe because they haven
    t ordered in a while and their inventory is low, and you are the only solution for them.   The answers to why come in the form of what you have heard, read, experienced and known facts.   The more information you have that supports the assumptions you make, the higher your confidence will be in those assumptions.


  • With confident assumptions, you
    Anticipate
    the future state and can form an action plan.  For example: given the assumption that interest rates will go up, you can than anticipate that the cost of a loan is going up too and you may embark on a plan to raise cash so your loan is smaller.  Or given the assumption that your customer will put in a large order might lead you to anticipate the need to ramp up your manufacturing capacity so you can deliver on that order.   If your assumption is that it
    s probably going to rain on your picnic (why .. because of the weather report), you would anticipate the need to have a covered area.


  • You challenge your plan by asking
    What If
    ?   What if the assumptions you
    ve made about the future are off?   How does that change your plan?  This might generate a contingent plan (a.k.a. Plan B).  What if that big order from your customer doesn
    t come in might result in a factory slow down.   What if interest rates stay high for an extended period of time might change the plan to continue to rent vs buy a home.


  • Preeminent Metrics
    What can you measure, track, observe, or watch that will provide insight that the assumptions you
    ve made are, or are not, still good ones as you execute your plan.  This becomes an invaluable trigger if the assumptions that drive your plan change, then this is cause to review your plan to ensure that you
    re still executing towards a confident future.   For example, a preeminent metric that might allow you to understand if your customer is going to give you that big order might be to track their growth and hiring practice.  If they institute a hiring freeze, or their revenue drops, maybe that big order won
    t materialize.  What if interest rates drop, what if there
    s a recession, what if you lose your job, what if you get a big raise .. how will that affect your assumptions regarding the affordability of a home?

 

Of course, you can

t plan for every possible outcome

, so you have to look at some of the most probable outcomes based on the most confident assumptions.  With a set of Preeminent Metrics, you can track those assumptions and if they turn out to be different, you can make a change earlier enough to compensate.

 

The Takeaway:  
Planning is about making
Assumptions
about the future, understanding
Why
you
re making those assumptions, being confident in them, then using
Anticipatory Thinking
to create a set of action items based on those assumptions, and then use a set of
Preeminent Metrics
that lets you know if you
re on track or need to revise the plan with some of your
What If
scenarios.

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