Make Better Business Decisions with a Pre-Mortem

Perhaps not a term in common terminology, a pre-mortem – otherwise known as prospective hindsight – is a strategic method for making better business decisions and eliminating risk.

The pre-mortem method of risk assessment was invented by the psychologist Gary Klein in 2007 to increase plan and project success rates. 

Team members are asked to brainstorm potential threats and weaknesses working on the basis that the project has already failed. As Klein writes, “Unlike a typical critiquing session, in which project team members are asked what might go wrong, the pre-mortem operates on the assumption that the 'patient' has died".

A pre-mortem works on the same principles of employing an ethical hacker – breaking things on purpose and imagining all that could go wrong in order to build a project or system that can weather potential storms. 

Pre-mortems and the power of negative thinking

Many projects fail, despite planning, research and prep. It is thought that many of these failures are down to a reluctance to speak up during planning. No-one wants to be the negative naysayer that calls time on a project so a pre-mortem creates a safe space for team members to share concerns and knowledge in their field which would otherwise go unsaid. 

A pre-mortem cuts down risk of the psychological phenomenon known as ‘groupthink’. 

Groupthink is the innate desire for harmony and cohesiveness which causes team members to forego critical thinking and agree at all costs. 

A pre-mortem also helps team members feel valued for their knowledge and experience, and facilitates shared learning. 

Research conducted in 1989 by Deborah J. Mitchell, of the Wharton School; Jay Russo, of Cornell; and Nancy Pennington, of the University of Colorado, found that pre-mortems increased the ability to identify future outcomes with more concrete and precise reasons by thirty percent.

Essentially, it’s a belt and braces approach, so why not?

How to adopt prospective hindsight

Team members gather and write down every reason they can think of for the failure - especially the kinds of things they ordinarily wouldn’t mention for fear of being controversial. 

Everyone must be encouraged to think negatively without fear of reprisal. Imagine the worst case scenario. What can get you there? Once everyone has their answers, they are read out by everyone in turn. And don’t just assess the pros and cons of the new plan. Also consider the consequences of not going ahead. What are the potential costs and consequences of doing nothing? 

At the end of the brainstorming sessions, team members review the results and develop solutions to strengthen the plan and mitigate risk.

As entrepreneurs, we’re often guilty of looking on the bright side, probably to protect us from the reality of years of hardship before (hopefully) seeing success. 

By being well prepared and brutally honest we can reduce nasty surprises and disappointment - and in the event of a pre-mortem evidencing that the plan isn’t worth progressing, you’ve saved yourself a lot of wasted time, energy and resources.

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