Strategic plans are built on assumptions about markets, stakeholders, organisational capabilities and future conditions. Making these assumptions explicit and testing them against relevant evidence strengthens strategic choices and reduces the risk of building strategy on unchecked beliefs. Because conditions continue to change, critical assumptions must also be monitored and revisited during implementation, combining research and evidence with leadership judgement to support informed and adaptive strategic decision-making.
Written: 30 April 2025
Strategic planning requires organisations and enterprises to make assumptions about future conditions, markets, competitors, stakeholders, internal capabilities and the environment in which they operate. These assumptions influence strategic choices, resource allocation and implementation priorities. When they remain implicit or untested, however, they can introduce significant weaknesses into strategic planning and execution.
Hollingworth (2008) emphasises that strategic assumptions underpin strategic plans, influencing an organisation's vision, performance measures and portfolio of strategic initiatives. Yet assumptions are not always explicitly documented or sufficiently interrogated before strategic decisions are made. This creates the risk that strategies may be built on beliefs about the organisation or its environment that do not adequately reflect reality.
Githens (2012) similarly describes assumptions as factors accepted as true or certain for planning purposes and highlights their role in creating a shared understanding of the strategy being pursued. Making assumptions explicit therefore enables leaders and stakeholders to examine the reasoning underlying strategic choices instead of treating those assumptions as established facts.
Identifying Strategic Assumptions
Strategic assumptions can arise from both the external environment and conditions within the organisation or enterprise.
Popp (2022) identifies considerations such as the political, economic, social, technological, environmental and legal environment (PESTEL), internal capabilities, competitors, organisational objectives and stakeholder expectations. Together, these factors influence what leaders believe about the conditions within which a strategy will be implemented.
The purpose of identifying assumptions is not to eliminate uncertainty. Strategy inherently involves making choices about a future that cannot be known with certainty. The objective is to make the assumptions underlying those choices visible and open to critical examination.
Testing and Challenging Strategic Assumptions
Once strategic assumptions have been identified, they should be examined against relevant evidence. Depending on the nature of the assumption, evidence may include quantitative information such as financial data, market trends, industry information and benchmarks; qualitative evidence from customers and stakeholders; expert and practitioner knowledge; historical evidence; and internal organisational information relating to capabilities, resources, systems and performance.
Using multiple sources can strengthen analysis by allowing assumptions to be examined from different perspectives. Leaders should also remain alert to confirmation bias and other forms of bias that may lead them to favour information that supports what they already believe. Evidence should inform strategic judgement, not simply be used to justify a predetermined strategic position.
Testing assumptions also requires constructive challenge. Engagement with colleagues, customers, stakeholders, mentors, specialists and other relevant actors can reveal information or perspectives that may not have been considered during initial planning. The purpose is not to create consensus around every assumption, but to ensure that consequential assumptions have been sufficiently interrogated before they become embedded in strategic decisions.
Scenario analysis can deepen this process further. Leaders can consider what would happen if a critical assumption proved incorrect, which changes in the operating environment could materially affect the strategy, and what alternative responses might be required if market, regulatory, technological or organisational conditions shifted.
This helps identify where the strategy may be vulnerable and where adaptability or contingency planning may be required.
Assumption Validation Is an Ongoing Process
Strategic assumptions should not be examined only when a strategic plan is developed.
Conditions change. New evidence emerges. Markets evolve, technologies develop, institutional priorities shift and organisational capabilities change. An assumption that was reasonable when a strategy was formulated may therefore become less reliable during implementation.
Robust strategic management requires leaders to monitor critical assumptions and revisit them as conditions change. Strategy consequently becomes a continuing process of evidence, judgement, execution, learning and adaptation rather than a static planning exercise.
Goshen's Approach
At Goshen Business and Career Advisory Services, we support enterprises to clarify strategic intent, positioning and priorities and to examine the assumptions informing important strategic choices.
Our approach combines research, evidence, contextual understanding and leadership judgement to support better-informed decision-making. The purpose is not to remove uncertainty, but to strengthen strategic choices and align enterprise capabilities, operating requirements and systems with the strategy being pursued.
Strong strategies are strengthened when their underlying assumptions are made explicit, critically examined against relevant evidence and monitored as circumstances evolve.