Sound decisions require an accurate and up-to-date understanding of the environment in which those decisions are being made. In the business world we give this the fancy name of “a situation assessment”.
In the Bible Jesus used a couple of analogies to teach the importance of “counting the cost” of your decisions, saying “For which of you, intending to build a tower, does not sit down first and count the cost, whether he has enough to finish it — lest, after he has laid the foundation, and is not able to finish, all who see it begin to mock him, saying, ‘This man began to build and was not able to finish’? Or what king, going to make war against another king, does not sit down first and consider whether he is able with ten thousand to meet him who comes against him with twenty thousand? Or else, while the other is still a great way off, he sends a delegation and asks conditions of peace.”
An honest situation assessment similarly considers the internal (in Jesus’ example — the status of your resources) and the external (e.g. the relative strength of your competitors) to avoid making a foolish decision.
Developing a comprehensive situation assessment can be a lot of work. Big companies often have teams of people with situation assessment in their job description and these teams produce formalized situation assessment documents that are referenced across the organization. Small companies often don’t have the resources to formally assess the situation and produce a comprehensive document, but it’s still really important to at least informally think through all of the same factors before making important decisions.
The product of your assessment can take one of many different forms. The simplest and probably most popular is the SWOT (Strengths, Weaknesses, Opportunities, and Threats) framework which can summarize the situation on a single page. In contrast, when serving as a strategy executive for large corporations, my teams would often take the first 3 months of the annual planning cycle to assess various dimensions of the external and internal environment resulting in a 100+ page PowerPoint deck informing the leadership team of key topics and trends that would shape our planning for the year.
In the article linked below I walk through:
– What is a Situation Assessment?
– When do you use it?
– How do you use it?
I also provide links to other relevant resources.
Hopefully this is helpful to you as you lead your teams and make wise decisions. Let me know if you ever need a hand.