Critical assumption planning: A practical tool for managing business development risk

Although much has been written about the practice of new business development, the authors continue to find corporate managers and entrepreneurs repeating the same mistakes and often reaching the conclusion that venturing in the corporate environment won't work. The problem stems from a mental model about how business should be managed and managers' performance assessed. Corporate managers of existing businesses are judged against meeting plan. In growing new businesses, however, strict adherence to “the plan” can lead to business failure. To manage business development risk, venture managers must learn to deal with uncertainty. Whereas managers of mature businesses practice the ethic of predictability, venture managers must follow a learning ethic.Working with Fortune 100 corporations, the authors have evolved a practical, disciplined process for business development risk management that focuses on learning. Titled critical assumption planning (CAP), the process maximizes learning about new markets at lowest cost. Major uncertainties in the business proposition are isolated as critical planning assumptions. Critical assumptions in the plan are then tested. The test sequence is determined by the potential reduction of uncertainty per dollar of test cost. Assessment of the assumption test results marks a milestone. At each milestone the business plan is revised to reflect what has been learned, and the venture is redirected or terminated. This process avoids the wasted effort and expense of pursuing the original plan until commercial failure becomes obvious.The key steps in this learning process are identification of critical assumptions and cost-effective testing of assumptions. Because these steps are unfamiliar to most corporate managers, effective use requires a new perspective and new planning tools. The study explains this perspective and introduces new tools for employing the process. Following are some planning innovations that have been effective in changing perspective and that also are of practical use:

1. 1. Differentiation between primary and derivative assumptions with focus on extracting and understanding the primary assumptions.

2. 2. Early construction of a model of the business plan that allows calculation of the impact of primary assumptions such as price or sales productivity factors on derivative assumptions such as revenues and income.

3. 3. Assignment of uncertainty ranges to the primary assumption values, not just the most likely values.

4. 4. Identification of the critical planning assumptions by determining the impact of their uncertainty ranges on venture net present value.

5. 5. Selection of the next venture milestone based on the test program that results in maximum reduction of uncertainty at least cost in least time for the most critical assumption(s).

Using CAP, managers can control risk despite the many uncertainties surrounding a new business proposition. Above all, decisions to stop or redirect ventures can be taken earlier, saving the corporation money and venture managers their career credibility.     

Individual career planning: Managerial help for subordinates

Personal career expectations have risen, and more individuals are showing initiative and demanding career opportunities. Turnover is increasing, and white-collar unions have been suggested. The author suggests that managers provide adequate support and guidance for individual career planning through human resource planning and development. Career planning begins with choices concerning occupation and organization, the job assignment, performance and development, and, ultimately, retirement. Management supports these choices through the way it attracts, recruits, and orients new talent; matches individual interests and talents with opportunities; helps individuals perform effectively and develop their capabilities; and helps individuals prepare for a satisfying, secure retirement. The author offers several guidelines for influencing career behavior, the core of the human resource management process.     

New approach to development aid

The prevailing disenchantment concerning the less developed countries (LDCs) has multiple roots. Two, however, are of particular importance. The first, symbolised by the report of the Club of Rome, is connected with the implications of the world’s finite resources. The second, underlined by Mr McNamara, is in the obstinately and grossly unequal distribution of the benefits of whatever progress is being made.     

The crisis of development aid

Measured in per cent of their Gross National Product (GNP), western industrialised countries currently spend far less on development aid than they did ten years ago. This is partly due to the very limited usefulness of the prevailing concept of development aid.     

Talent management and career development: What it takes to get promoted

Based on the talent management literature, this paper investigates managerial skills that are essential for managers’ job promotion. Using arguments from the human and social capital literature and following tournament logic, we claim that a manager's own experience, expertise, and network size positively affect promotion odds, while strong colleagues decrease promotion odds. Studying 7003 promotions to middle management and 3147 promotions to senior management, we find broad support for our hypotheses, but find also that network size no longer predicts promotion to senior management. Our findings have implications for individual career development and talent management programs.     

A critique of the socio-cultural approach to development planning

Recent reflections on development policy have tried to eliminate the weak points in the economically oriented development theories which have dominated development planning up to now, and the traditional modernisation theories complementary to them. The propagation of strategies geared towards overcoming technological and cultural dependence is one result of such rethinking. The following article takes Black Africa as its case example for a critical appraisal of this “socio-cultural” approach.     

促进我国健康事业发展的思考

回顾历史,无数的事实充分说明和证明:某种思想和口号,越是与民众的切身利益相关、相关的程度越大、越直接,对民众的号召、鼓动作用越大、越有效。因此,在我们制定未来的国家战略时,有必要考虑如何以一种更加清晰、更加务实、更加容易被理解和接受的方式,来表达和描述我们的诉求和目标。     

The effects of development aid on exports

Of what benefit cooperation with developing countries is in actual fact to the industrialized countries is a question which is receiving increasing attention in the discussions on development policy. In the present economic situation special interest attaches in this context of course to the repercussions of public development aid services on the export activities of enterprises in the donor countries. The following article is based on the findings of a study into “Job procurement through development aid credits and exports to developing countries“ (Arbeitsplatzsicherung durch Entwicklungshilfekredite und Exporte in Entwicklungsländer, Basle 1978) which was undertaken by the author together with Christel Bergmann on behalf of the Federal Ministry for Economic Cooperation.     

The development of international food aid policy

The European Community is to spend ECU 680 million on food aid in 1982—an increase of 13.3% over 1981. Is this a sign of growing humanitarianism on the part of the EC or merely the side-product of a policy of agricultural protectionism which in the long run is harmful to the economies of both the donors and recipients of food aid? A look at the historical development of international food ald may help to provide an answer to this question.     

Economic stagnation and development aid

The main objectors to a link being established between special drawing rights (SDRs) and the financing of development have in the past been the industrial countries. They have been pointing out that SDRs were created for other purposes — more effective control over international liquidity — and that a link with development finance would have an inflationary effect. If however the present unemployment situation in the industrial countries should become at least partly a permanent feature the idea of such a link would become more attractive than hitherto — to the industrial countries.     

Possible selves and identity in relation to career development: evidence from Chilean male middle‐aged managers' career narratives

Social and economic conditions, as well as the dynamism of the Chilean labour market, place new demands on middle‐aged workers who have to explore both internal and external opportunities to develop successful careers. We assumed that possible self and identity in future states are core organizing aspects in this process. Identities, being core components of the self‐concept, comprise self‐representations that are contextually based and rooted in a social structure. Given the fact that there is a serious lack of empirical research in this domain, this study was aimed to help close an important gap in the literature. More specifically, it was intended to better understand the role played by possible selves and identity – that is, knowledge about what the self might eventually achieve or become – in career development. Based on an in‐depth qualitative study among 25 male middle‐aged Chilean managers, we found that the possible selves reported: (1) are evolving processes that vary in terms of content, stability and elaboration; (2) are related to career variety; (3) help in both career transitions and the adjustment process in novel situations; and (4) act as an incentive in career development. It is important to stress that in cases of challenging work contexts, employees are urged to create and recreate new selves and identities at work in order to increase their adaptability to ever‐increasing working life demands and enhance their employability.     

Public development aid: Below the target

At the beginning of the Second Development Decade (1970–1980) the Industrial countries set themselves the target of stepping up their public development aid to 0.7 p.c. of their GNP by 1975. The validity of this aim is still emphasised by representatives of international organisations as well as spokesmen of individual industrial countries, such as the Federal Republic of Germany.     

城市规划对城市发展的主导作用分析

在城市发展的过程中,城市规划和房地产开发商两者都具有举足轻重的地位.城市规划定位城市的性质,决定城市发展的方向,既在宏观层面又在微观层面指导城市的发展.开发商则决定了城市的细胞--建筑或社区的风格和形体.城市规划主导了城市的改变,而开发商的作用也不容忽视.