Discovery-Driven Planning

For a project or an endeavor, when the outcome is highly uncertain, the Discovery-Driven Planning may be used to mitigate risks due to unknowns.

“In Discovery-Driven Planning, success means generating the maximum amount of useful learning for the minimum expenditure.” For me, this was very stimulating concept. For a venture, seldom is the future predictable. Most of the time, the assumption-to-knowledge ration is high. In those situations, it is frequent to think that planning is unfeasible, or even impossible. The article addresses planning in this kind of situations.

There are six disciplines for the Discovery-Driven Planning

• Framing: Define the meaning of success. Identify quantifiable impact on the firm.

• Competitive market reality specification: Understand the reality of competition: the advantages and disadvantages compared to other companies in the market.

• Specification of deliverables: Define the operational requirements. Translate strategic objectives into common understanding. Focus on competence. Discover dangerous assumptions.

• Assumption testing: Document and test the assumptions. This discipline is what mainly differentiates from traditional planning.

• Managing to milestones: Key points in time which the assumptions are tested. After each milestone, the plan contains further detail. All assumptions are mapped to milestones.

• Parsimony: Find ways of avoiding investment in assets and fixed costs until there are enough justification.

Before the article, my financial projection was top-down. From 20 million senior citizens, 10% are searching for job. From the resulting 2 million, my venture will aim for 50%, and so forth. Now it changed my though. Exercising the reading on my venture,

Framing

Formulating the finance using bottom-up, calculating the required profits, required return on asset and required unit volume changed the perspective. At this point of time, the required profit would be related to the comparable income I could get otherwise. In this case the target for required profit is $300,000/year. Given the membership price of $10/person, the venture should maintain annual members of 300K.

Checking market reality

The market has already competitors. The advantage that I should exploit it the usability and social networking features not explored by existing competitor.

Specifying deliverable

The business will be worthwhile if we achieve the following

- If 1.5% of the job-looking senior population is made member of the site.

- Maintain a constant growth of member at a rate of 10% per year.

Documenting assumptions

There are two key assumptions in the venture:

- The senior citizen indeed are looking for jobs (either full-time, partial time or contract based)

- The senior citizen uses internet and probably other communication technology such as smartphones.

The next activity will be planning to learn at key milestones. At this point I will require further advice on how to conduct the milestone planning.

The article provided me with novel concept in planning. Nevertheless, having an engineering background, I still find it abstract. I will require further research in the topic to make proper use of this tool.

Young Suk