Assumption-Based Planning by James A. Dewar A Tool for Reducing Avoidable Surprises

What's it about?

Assumption-Based Planning (2002) offers a different way to think about strategy. Instead of trying to predict what the future holds, it gives you a method for finding the weak points in any plan – the silent beliefs that, if they turn out to be wrong, bring everything down. You'll walk away with practical tools for stress-testing your goals and making them sturdy enough to survive surprise.

All of us want certainty. So, when we plan, we often draw a line from where we are now to where we want to be, and we fill that line with milestones that feel solid and real. There’s comfort in picturing the finished project after all – the thriving business, the goal achieved. But somewhere in the back of your mind, there’s usually a flicker of unease. A quiet awareness that spreadsheets don't account for chaos. The confidence we feel might just be a story we tell ourselves to avoid staring into the unknown.

This lesson will strip away that story. You’ll look beneath the surface of your goals and find the hidden load-bearing beliefs that actually determine whether your plans stand or crumble. Once you can see these invisible structures, you stop being someone who hopes things work out. You become someone who builds plans strong enough to absorb the shocks that reality inevitably delivers.
Think about the last time you made a detailed plan for something that mattered. Maybe it was a romantic dinner, a product launch, or a career move. You listed every step, checked your budget, mapped out the timing. It felt solid, like a roadmap to success. But here’s the thing: what you actually built was a structure held up by invisible beams. And when plans fall apart, it’s rarely because the vision was flawed or the execution was careless. It’s because one of those invisible beams snapped.

Those beams are called assumptions. An assumption is a judgment about some characteristic of the future that sits underneath your plans. It’s the gap between what you know for certain and what you need to be true for everything to work. When you look at your strategy, you see a list of actions. But if you could x-ray that plan, you'd find every action rests on a foundation of judgments like these. Some are rock-solid. Others are fragile. The trouble is, in the rush of planning, you often forget you’re making them at all.

So, how do you figure out which beams actually matter? Think like an architect examining a blueprint. You can knock down a partition wall and the roof stays up, but remove a main support column and part of the building comes crashing down. The same logic applies to strategy. You need to identify load-bearing assumptions: the ones whose failure would force you to completely rethink your plans.

Here’s a quick example. Say you have a project timeline that depends entirely on a key employee named Sylvia. You’ve planned for her tasks, her hours, her output. But underneath that schedule sits a silent beam: the assumption that Sylvia will actually be there. If she’s constantly being recruited by competitors, you might worry about this openly. But what if Sylvia is intensely loyal and has never missed a day? Her presence starts to feel like a fact rather than an assumption. You stop noticing that your entire operation rests on her showing up.

This brings us to the most dangerous category: the implicit assumption. These are judgments you’re not even consciously aware you’re making. They’ve slipped below the surface of your attention, often because familiarity has hardened them into something that feels like certainty. In Sylvia’s case, her loyalty makes her availability seem guaranteed. But if she’s suddenly unavailable – a family emergency, an unexpected illness – that implicit beam snaps. Because you didn’t know it was there, you have no backup. The plan collapses.

Traditional planning often encourages you to focus on the decoration – the goals, the marketing, the rollout – while ignoring the structural integrity underneath. To build a strategy that survives contact with reality, you have to stop looking at what you plan to do and start looking for what you’re expecting to happen. You have to find those invisible supports before they buckle. But how do you spot a risk you don’t even know you’re taking?
To spot these hidden dangers, treat your strategic documents less like sacred texts and more like crime scenes. You’re looking for fingerprints – traces of the beliefs that shaped the plan but were never spelled out. And the best detective tool here is surprisingly low-tech: grammar. The language you use to describe the future betrays how certain you feel about it. That certainty is exactly where assumptions hide.

Start by hunting for the word “will.” When planners write strategy, they reach for “will” constantly – “Competition will be brutal,” “Technology will reshape the sector.” These sentences look like facts, but they’re actually bets. By scanning your documents for every “will,” you can pinpoint the moments where you stopped treating the future as a range of possibilities and locked onto a single path. Each one is a load-bearing assumption waiting to be tested.

The next word to track is “must.” Planners use it to describe actions they see as non-negotiable – “We must cut headcount,” “The logistics system must handle increased volume.” These imperatives are the structural pillars of your response to the future. Where “will” shows what you believe about the world, “must” shows what you believe about your own capabilities and constraints. Strip a document down to its “wills” and “musts,” and you’re left with a skeleton map of your certainties.

Grammar can only take you so far, though. To find the assumptions buried even deeper – the ones that never made it into sentences at all – you need to examine the logic of the plan itself. Think of this as reverse-engineering the “therefore” in your strategy. Every action exists to solve a problem or seize an opportunity. You should be able to draw a line from each specific action to a specific belief about the future. If your plan includes a massive budget for a new factory, there’s an implicit “therefore” linking it to a belief that demand is going to rise.

The red flags appear when you find actions that seem unconnected – expensive initiatives that don’t link back to any stated belief. Planners rarely do pointless things, so an unconnected action usually signals a powerful unstated assumption. Maybe you’re building that factory because you assume excess capacity will scare off competitors, even though no one ever wrote that down. By forcing yourself to connect every “what we’re doing” to a “why we’re doing it,” you drag these silent justifications into the open.

After running these forensic sweeps – tracking down the “wills,” the “musts,” and the missing “therefores” – your perspective shifts. What looked like a clean path forward now resembles a minefield. You started with a handful of explicit risks – now you might be staring at dozens, even hundreds, of assumptions. This creates a new problem: paralysis. You can’t monitor or hedge against hundreds of variables. So, the next challenge becomes figuring out which of these assumptions are actually capable of destroying you – and which ones you can safely set aside.
Facing a sprawling list of hundreds of assumptions is paralyzing. It feels less like a strategic asset and more like an indictment of your entire project. If you try to build a defense against every single potential crack in the foundation, you will run out of time and money long before you launch. You have to triage. You need a ruthless filter to separate trivial concerns from structural killers. The goal now is to identify which of these many assumptions are both indispensable to your success and genuinely capable of breaking.

The first instinct most planners have is to ask, “What are the odds?” They look at a risk – like a competitor slashing prices – and try to assign a percentage probability to it. This is a trap. Calculating the precise likelihood of a unique future event is often just guessing with better math.

A more useful question: Is this plausible? Could it happen within the lifetime of your plan? If yes, treat it as a vulnerability. At this stage, pessimism serves you better than optimism. You want to identify every beam that could snap. By shifting your standard from “likely” to “plausible,” you stop arguing about percentages and start focusing on mechanics.

So how do you find the truly critical vulnerabilities among all that noise? There’s a powerful thought experiment called the Rip Van Winkle technique. It goes like this: you fall into a deep sleep today and wake up twenty years from now. You have no idea what has happened to your industry, your market, or your company. You’re allowed exactly ten yes-or-no questions to figure out if your organization survived and thrived. You can’t ask, “How is the economy?” You have to ask something like, “Did interest rates stay below five percent?”

This exercise cuts through the clutter fast. When you only have ten questions to determine your fate, you stop caring about minor details. You don’t ask about office supply costs or software updates. You ask about the fundamental drivers of your business. The specific regulations that could have outlawed your product. The specific competitor who could have made you obsolete. The specific customer behavior you were banking on.

The questions you choose point directly to the load-bearing, vulnerable assumptions you’re making today. These are the risks that matter. These are the few critical beams that, if broken, bring the whole structure down.

By applying this filter, your unmanageable list of hundreds shrinks to a focused handful of critical threats. You’ve stripped away noise and are left with signals. You know exactly which assumptions are holding up the roof, and you know it’s plausible for them to fail.

But identifying danger is only half the equation. Knowing a beam might crack is useful. Knowing when it’s starting to crack – that’s what lets you act in time.
Building a radar system for your strategy starts with a simple realization: by the time a disaster actually hits, it’s too late to plan. You can’t buy fire insurance when the kitchen is already ablaze.

To survive, you need to identify specific, observable events that act as early warnings – indicators that a load-bearing beam is beginning to buckle before the roof comes down. In Assumption-Based Planning, these indicators are called signposts. A signpost is an unambiguous event or threshold that signals a change in how valid an assumption really is. It’s the difference between a vague worry that “the market might turn” and a concrete alert that “sales have dropped for three consecutive weeks.”

Now, it’s easy to confuse these warning signs with your goals, but they serve completely different purposes. In planning, you usually focus on aimpoints – targets you want to hit, like reaching $50 million in revenue or launching by Christmas. Aimpoints measure success. Signposts detect failure.

If your plan assumes you’ll hit that $50 million target, a signpost isn’t the failure to reach it in December – that’s just an autopsy. A true signpost would be missing a leading indicator in April – perhaps raising only $30 million when the model demanded $40 million. Detecting that gap early gives you months to adjust. Waiting for the final deadline gives you nothing but regret.

Here’s the thing though: a signpost is only valuable if it buys you time. Take a moment to picture yourself driving down an unfamiliar road at night, relying on street signs to tell you when to turn. If a sign is obscured by overhanging foliage and you only see it as you’re speeding through the intersection, it hasn’t helped you – it’s just documented your error.

This concept of warning time is the single most critical factor in setting up your defensive radar. Does this signal give you enough time to swerve? If the warning comes simultaneously with the crash, it’s not a signpost – it’s just the sound of impact.

Think about a child’s lemonade stand. The young entrepreneur assumes the weather will be sunny on Saturday. If it rains, the business fails. Looking out the window Saturday morning to see rain? Useless. The lemons and cups have already been bought; the capital is lost. The actual signpost here is the weather forecast on Friday. That forecast is a distinct event that happens before the point of no return. If Friday’s forecast predicts storms, the entrepreneur can skip buying the sugar and save their capital for a better weekend.

So, what do you do when you look at a vulnerable assumption and realize there are no early warnings – that the foliage is too thick and the disaster will strike instantly? Then monitoring isn’t enough. You can’t just watch the radar – you have to fortify the ship. When warning time is zero, you must stop scanning for trouble and start building defenses that are permanent, active, and ready for anything.
Once you accept that some storms arrive without warning – that the foliage is too thick or the event too sudden for your radar to save you – the nature of your responsibility shifts. You can no longer be satisfied with watching the horizon. You must move from passive observer to active architect. You’ve identified the invisible beams holding up your strategy, stress-tested their vulnerability, and set up your early warning systems. Now comes the final phase: fortification.

There are two ways to fortify a plan. They represent opposite philosophical approaches to the future.

The first is shaping – the strategy of control. When you identify a vulnerable assumption, say, that customers will embrace your new technology, a shaping action is an offensive move designed to make that assumption come true. You don’t hope for demand – you launch an aggressive education campaign to create it. You’re acting now to shore up the beam and remove the risk entirely. Shaping feels like leadership. It assumes that with enough effort, you can bend the world to fit your plan.

But you cannot conquer every variable. The weather, the economy, the actions of competitors – these are often beyond your reach. Which brings us to the second strategy: hedging.

If shaping is about control, hedging is about insurance. It requires the humility to admit that a load-bearing beam might still snap despite your best efforts. If your plan assumes your car will get you to a meeting, a shaping action is getting a tune-up. A hedging action is putting a spare tire in the trunk. You don’t buy that spare because you want a flat, but because you respect the plausibility that one could occur.

The challenge with hedging is rarely intellectual – it’s usually cultural and financial. In the boardroom, shaping actions are an easy sell. Spending money to dominate the market sounds like progress. Hedging looks like waste. Why build a second supply chain if the first one works? Why keep cash reserves when you could invest in growth? To an efficiency-minded manager, a hedge looks like dead weight.

To overcome this resistance, reframe the conversation. A plan stripped of its hedges isn’t efficient – it’s fragile. It’s a gamble that pays off only if the world behaves perfectly. By refusing to hedge, you’re selling your safety, not making money. Present hedging as the purchase of options – the price you pay so a single broken assumption doesn’t become a terminal event.

This whole process moves you from blind optimism to eyes-wide-open resilience. By excavating your implicit beliefs, triaging their vulnerability, establishing signposts, and then shaping or hedging against the risks, your strategy changes. It stops being a rigid script that shatters at the first sign of trouble. It becomes a rugged, adaptable system – one built to weather the future that actually arrives.
In this lesson to Assumption-Based Planning by James A. Dewar, you’ve learned that the real danger to any strategy isn’t bad execution, but the invisible assumptions quietly holding the whole thing up.

Instead of playing fortune teller, your job is to act like a structural engineer. Find the beliefs your plan depends on, and figure out which ones could buckle under pressure.. You learned that words like “will” and “must” are red flags pointing to hidden risks, and that imagining yourself in the future helps you sort the fragile assumptions from the sturdy ones.

Signposts give you an early warning system – a way to notice cracks forming before the whole structure gives way. And when it comes to protection, you have two options: shaping actions that push the world toward your plan, and hedging actions that prepare you for when it pushes back. This is the shift from wishful thinking to clear-eyed readiness. You stop planning for the world you want and start building for the world that shows up.

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