Use Key Assumptions to Focus and Frame Planning and Messaging
My favorite “go-to” tactic for working though complex planning challenges is to develop a short list of “key assumptions” that focuses on strategic objectives and desired results. This approach helps to simplify messaging and fast-track consensus and approval by diminishing feelings of negativity and confusion.
Building consensus and confidence is the main pathway to breaking down the negative barriers in any planning process. Using an approach that emphasizes a small number of key assumptions will bring clarity to planning while keeping the focus on the big picture and desired results.
It is best to view key assumptions as a short list of the most significant strategic objectives and desired outcomes for a planning effort (building next year’s budget), an unexpected challenge (reacting to non-renewal of a large grant), or a new project (acquiring a new program from another nonprofit).
For example, when developing a new budget, the short list of key assumptions could be:
Increasing annual meeting registration fees (last increase was 5 years ago);
Expand service hours at a medical clinic (due to increasing demand and new funding commitments);
No increase in sponsorship revenue (due to expected weak economic conditions); and
Adding one new fundraising event (as recommended by the development committee).
Strive to have at least three, but no more than five, key assumptions on the list. Less than three makes the list too narrow in scope, and more than five will cause the list to be too broad and hard to remember.
Focusing on a short list of key assumptions has numerous benefits.
First, this approach will help management and staff to frame and focus their internal planning. Management and staff must consider all elements of planning down to the smallest detail. However, a thoughtful list of key assumptions will help management and staff remember the big picture. When done well, key assumptions convey the urgency of the organization’s needs and the benefits of success. Minor details can be distracting and disheartening, causing momentum to be lost. Keeping the focus on key assumptions will remind staff of the essential goals and help them to find solutions to meet those goals.
Additionally, key assumptions will help with external messaging to Board members and others involved with the organization’s planning efforts. Board members can be easily distracted, feel uncertain or afraid of new efforts, and sometimes overwhelmed by the details of a project. Sticking to consistent messaging though the framework of key assumptions will enhance focus and understanding for Board members, allowing them to confidently monitor progress, make inquiries, and ultimately provide approval when necessary.
Using an annual budget building process as an example, key assumptions help management and staff to define significant strategic budget modifications and goals while giving Board members key insights to consider for approving the budget.
Planning Tip – Begin the next year’s budget building process with a short survey of questions related to current year budget performance and expectations for the next budget year. Design one short set of survey questions to be answered by Board members, management, and staff. Track the results anonymously for each group and designate an inclusive working group to compile and analyze the results. This process will yield important insights that will help set the key assumptions for next year’s budget.
The process of identifying key assumptions also provides a great opportunity to pencil out initial thoughts around a new project or challenge. Some of my best key assumption lists have come from sketching a few quick notes while waiting at an airport or in an Uber. It is very comforting and calming to sit back and focus on the big picture and temporarily forget the many small details.
You might also be interested in:
The Benefits of Multi-Year Budgets
Periodically Check Key Performance Indicators (KPIs) to Keep Them Relevant
