We analyse for realism, not utopia.
Every organisation depends upon assumptions about the future. Strategies rely on forecasts, budgets depend on anticipated revenues and costs, and transformation programmes assume that people, markets and technology will behave in particular ways.
There is nothing inherently wrong with this. Organisations cannot plan without assumptions.
The problem arises when assumptions begin to masquerade as facts.
In Chapter 4 of Executive Decision Acceleration – Enhancing Judgement Under Pressure, I explore why realism is essential to effective executive decision-making, and why the pursuit of perfection can become a source of organisational risk.
Why does realism matter in executive decision-making?
Most people prefer certainty. It feels reassuring, responsible and safe.
Leaders naturally want reliable information before committing their organisations to consequential decisions. That is entirely reasonable.
However, there is an important distinction between seeking better information and seeking perfect information.
Perfect information rarely arrives.
Meanwhile, markets change, competitors respond, costs increase, customers make unexpected choices and opportunities disappear.
An organisation that waits for certainty may discover that the circumstances surrounding its decision have changed before it acts.
The pursuit of certainty can therefore become a source of risk rather than a means of reducing it.
When organisational assumptions become accepted as facts
Every strategy, budget and business plan contains assumptions.
A revenue forecast may assume that customer demand will remain stable. A transformation programme may assume that employees will adopt new ways of working. A technology investment may depend upon capabilities being delivered on time.
These assumptions may be reasonable. They are not necessarily facts.
The danger arises when forecasts become accepted as certainties, delivery dates become regarded as guarantees and plans are treated as accurate descriptions of the future.
Reality does not have to conform to an organisation’s expectations.
Effective leadership therefore requires more than identifying assumptions during planning. It requires continually testing, monitoring and challenging them.
It also requires contingency arrangements for circumstances in which important assumptions prove incorrect.
Can too much analysis damage decision quality?
Additional analysis can improve understanding, reduce uncertainty and support better decisions.
But there comes a point at which further analysis produces diminishing returns.
Another report may repeat what is already known. Another meeting may postpone a decision without changing the available options. Another review may create the appearance of progress while implementation remains stalled.
The distinction is between analysis that materially improves judgement and analysis that merely postpones engagement with reality.
The pursuit of perfection can become a substitute for action.
This is particularly consequential when the organisation’s environment is changing faster than its decision-making processes.
How can pilot programmes improve organisational learning?
Eric Ries popularised the concept of the Minimum Viable Product (MVP), an approach that offers an important lesson for executive decision-making.
An MVP does not mean accepting poor quality, abandoning professional standards or acting carelessly.
Its value lies in testing important assumptions against real-world evidence before committing substantial resources.
A product may appear commercially attractive during planning, but customers may respond differently. A proposed service may look effective on paper, yet practical delivery may expose weaknesses. A transformation strategy may be logically compelling, while implementation reveals unforeseen organisational resistance.
Pilots, experimentation, customer engagement and operational feedback allow organisations to discover these realities earlier.
Rather than waiting until uncertainty has supposedly been eliminated, leaders can learn through carefully controlled application.
Reality becomes the teacher.
The objective is to learn quickly, adapt intelligently and avoid committing disproportionate resources to assumptions that have not been adequately tested.
Realism is a leadership discipline
Realism is neither pessimism nor optimism.
It requires leaders to distinguish between what they hope will happen and what the evidence indicates is actually happening.
It also requires intellectual humility.
A strategy may have been developed carefully, supported by substantial analysis and approved by experienced executives. Nevertheless, its underlying assumptions can become invalid as circumstances change.
Effective leaders remain committed to organisational objectives without becoming emotionally attached to particular forecasts, plans or assumptions.
They recognise when reality diverges from expectation and respond accordingly.
This is central to Executive Decision Acceleration (EDA): strengthening the organisation’s ability to exercise sound judgement, make effective decisions, execute them and learn from the results.
Building organisational resilience rather than pursuing perfection
Commercial aviation offers a useful illustration.
Despite sophisticated technology, established procedures and extensive preparation, aviation operates in an environment of continuous uncertainty.
Weather changes, technical problems arise, operational circumstances evolve and human performance varies.
Safety does not depend upon eliminating every uncertainty. It depends upon understanding risk, preparing contingencies, monitoring changing circumstances and responding effectively.
The same principle applies to organisations in every sector.
Resilient organisations do not assume that every forecast will prove correct.
Instead, they develop the capability to recognise when important assumptions are failing and respond before the consequences become material or catastrophic.
Success does not always come from being right initially. Often, it comes from recognising quickly when reality has changed and adapting appropriately.
Four questions for your leadership team
Consider the following questions:
- Which assumptions within your organisation are currently being treated as facts?
- Are important decisions being delayed in pursuit of certainty that may never arrive?
- How effectively does your organisation test its assumptions against reality?
- If a key strategic assumption proved wrong tomorrow, how quickly would your organisation recognise it and adapt?
These questions are particularly relevant when reviewing strategies, investment decisions, transformation programmes and organisational performance.
Executive Decision Acceleration: Better Decisions, Better Execution
Executive Decision Acceleration brings together people, strategic thinking and structured decision-making to strengthen organisational judgement, execution and learning.
At The Sixsess Consultancy, our approach is to facilitate the development and installation of that capability within organisations, enabling their own people to apply it independently.
The objective is not perfect foresight. It is effective judgement in an imperfect world.
We analyse for realism, not utopia.
Chapter 4: “Why Realism Beats Perfection” From Executive Decision Acceleration – Enhancing Judgement Under Pressure – A Field Guide
Better Decisions Create Value. Consistently Better Decisions
Compound It.
Amazon paperback: https://www.amazon.co.uk/Executive-Decision-Acceleration-Enhancing-Judgement/dp/1066967601
The Sixsess Consultancy: https://sixsess.org/
Barry Eustance: https://www.linkedin.com/in/barry-eustance/
The Sixsess Consultancy on LinkedIn: https://www.linkedin.com/company/sixsess/
Barry Eustance
Principal Consultant, The Sixsess Consultancy
Author, Executive Decision Acceleration – Enhancing Judgement Under Pressure
