Applying An Assumption Based Development Approach to Navigate Uncertainty & Reveal Opportunity

Learn about Assumption Based Development from Devin Baldridge, Director, Lean Growth, at The Garage Group.

Several years ago, I was introduced to an approach for driving innovation, commonly referred to as ABD or Assumption-Based-Development. Assumption-Based-Development is an approach that helps you deal with uncertainty. It is used to identify the most important assumptions in your plans, to test these assumptions, and to accommodate unexpected outcomes.

The concepts attributed to Assumption Based Development are simple, but in practice, the approach can be powerful. This approach to problem solving and decision making would forever impact how I made decisions personally and professionally moving forward. In fact, I recently used this approach, to build confidence around a significant career decision, and haven’t looked back!

ABD is in many ways the “engine” by which entrepreneurs move from identifying an opportunity to developing it into a marketable product or service. I once perceived entrepreneurs as gun-slinging, cowboys that made extremely risky decisions and occasionally reaped the benefits of those decisions. In reality, successful entrepreneurs are extremely calculated and become fluent in this approach. With minimal resources, they learn to operate with efficiency. They take radical ideas, riddled with risk, look for ways to reduce risk through iterative learning cycles, and use evidence to inform their next move.

The last few years have seen a steady trend in BigCo’s applying an ABD approach to its most disruptive innovation programs to reveal new sources of growth. A simple source of evidence can be found in the recent emergence of new brands available only through E-commerce and BigCo’s more public display of innovation efforts at trade shows. 

While The Garage Group has helped numerous clients use ABD to de-risk disruptive opportunities, we have found the approach equally effective at enabling change by de-risking other types of challenges too. We have seen the approach effectively help organizations de-risk transformations to their internal operational models as well as bring discipline and focus to current business needs.

For BigCo’s to fully adopt entrepreneurial approaches does require a shift in mindset, behavior, and processes. True adoption, is enabled through rewarding that change. We recently saw an HR organization at a BigCo use an ABD approach to methodically identify the needs and pain points of key stakeholders in the business. By working through a series of learning loops, the HR team was able to build a deep understanding of the concerns and insecurities associated with the change among key stakeholders, they were then able to use behavioral evidence to assess relevancy and traction for their developing solutions. What began as small experiments, grew into larger-scaled experiments. A series of solutions have emerged including a new career track, a new compensation model, and a revision to the scorecard that the business leaders are assessed against.

Similarly, we have found an ABD approach brings tremendous discipline and focus to teams responsible for delivering growth on current business. While the cycle time for capturing assumptions, designing a learning experiment, and identify critical metrics is generally much quicker, the approach is the same. Teams applying an ABD approach to their work tend to be far more intentional with marketing dollars, and able to pivot quickly to optimize their efforts to grow the business.

Whether your business challenges are market-facing or internal, the following is a list of tactics we have found effective, to apply an Assumption Based Approach to your work:

1. Get clear on who your stakeholders are. Depending on the work, there are likely multiple and may include a mix of internal (within your organization) and external customers.
2. Take the time to capture a list of assumptions you might have related to the challenge you are addressing.  Depending on the stage of learning you are in, your assumptions may be specific to customer pain pts or needs, or they may be about how your solution addresses that need.
3. Identify the most critical assumption from your list.  The most critical assumption can be identified as the one you have the least information to support and would have the greatest impact on the effort you are leading.
4. Design an experiment that will enable you to learn about your critical assumption. Note- the goal of the experiment is not to validate your assumption, but to learn.  Depending on the stage of learning you are in, this may look like a deliberate conversation with a stakeholder, internet searching, or could be more sophisticated. Determine what stimulus is required to aid in the learning.  Determine what metric, you need to build confidence for the stage you are in. Note behavioral metrics are more revealing than claimed.
5. Once you have run the experiment, assess the learning, and determine what action you will take next: Pass (evidence suggests there is no opportunity), Pivot (evidence suggests you need to make a change to your original thinking), or Persevere (evidence suggests you are on the right track).
6. Continue to build your body of evidence by repeat the first 5 steps. Revisit your critical assumptions and steadily increasing the fidelity of your metric, and scale of your experiment as you progress.

If this article was helpful, or if you found success in leveraging one of the tactics listed, we’d love to hear your story, and help you on your journey. One way we’ve historically done so is by developing custom training solutions. Click here to learn more about how that could come to life for you and your team.