Why You Should Assess Before You Assume


In 1985, Coca-Cola debuted “New Coke” as a response to Pepsi’s ever-increasing sales. In taste tests, the sweeter taste of New Coke was preferred to the old Coke as well as over Pepsi, and so it seemed like a sure bet to regain their market share. However, Coca-Cola based this new release on a number of assumptions that they hadn’t confirmed – namely, that the sweeter taste was the only factor considered in their customers’ soda-purchasing behaviors. They assumed that if it tasted better, it should be out with the old (Coke) and in with the New. However, upon its release, they quickly discovered that customers’ ties to the old Coke were more important than taste, so Coca-Cola Classic was re-introduced while New Coke soon fizzled out of existence.


When making the move into Canada in 2013, Target assumed that its US business model would work just the same in this new locale. They failed to take into consideration the different shopping habits and expectations of Canadians, and so the promise that its Canadian customers could “expect more, pay less” ended up just the opposite – prices were high, stocks were low, and most Canadians didn’t want a “one-stop shop” like Americans did. Target also expanded into Canada at rapid pace – making the assumption that its opening would be smooth and successful – rather than slowly testing the waters. If Target had closely examined the market assumptions it was making about Canadian consumer behaviors and expectations before opening, it may not have had to close a mere two years later and would have avoided the associated massive losses.

Assumptions are a vital, and yet often-overlooked element of initiatives and strategies. If Coca-Cola and Target ­– and the countless other similar examples throughout history – had better assessed their assumptions before acting on them, they could have avoided huge strategic blunders and stayed on course, saving their time, money, and reputation.

How can you avoid making the same mistakes? Remember – any unchecked assumption is a potential risk for your organization. So before you assume, make sure you assess: Powernoodle’s Digital Decision Model for Assumptions Identification & Validation can help you ensure that your organization keeps its assumptions in check.