How FP&A Leaders use “premortems” to identify risks
Image by Drew Beamer via Unsplash
Many projects fail because people aren’t prepared for failures. Fortunately, there is something FP&A can do about that.
Imagine you are leading the financial modeling process for a big innovation. You ask your business partners: “Can you tell me more about the risks of the project?”
The response: Nothing.
No one raises their hand to list the things that could go wrong. Don’t worry. It’s not you - that’s normal.
Studies show that project leaders overwhelmingly tend to be overconfident. And even if asked, team members hold back with criticism to protect political, organizational, or personal interests.
Fortunately, there is a solution: It’s called Premortem.
Here is how it works:
Tell your team to imagine it’s 6 months in the future (or what time makes sense for your project). The project has failed spectacularly.
Then, ask each team member to share one reason why it has failed. Do this for three rounds and group the issues to find common themes.
Premortems work because they create a safe space to share concerns.
As a result, blind support for ideas gives way to creative problem-solving.
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