Name the assumptions that must hold for the plan to work
Every plan rests on assumptions — list them and ask how likely each one is.
Why it works
Plans fail when hidden assumptions are violated. Making assumptions explicit converts them from invisible background beliefs into testable hypotheses with associated probabilities. This allows you to assess how sensitive the plan is to each assumption — whether failure of one assumption kills the plan or just reduces its upside.
How to do it
- Write down the plan, then ask: what would have to be true about the world for this to work?
- List every major assumption, including "no major unexpected disruptions."
- Estimate a probability for each — not precisely, but whether it is 90%+, 60–90%, or below 60%.
- For any assumption below 80%, ask what the plan looks like if that assumption fails.
Evidence
Assumption-surfacing is a core step in scenario planning, risk analysis, and prospective hindsight (premortem) techniques. Explicit articulation of plan dependencies improves risk awareness and plan quality in practitioner frameworks. (clinical)
Direct experimental evidence on assumption-listing as an isolated practice is limited; the benefit is principled from the broader evidence on planning under uncertainty.
Common mistake
Listing assumptions and then not checking whether any of them are already contraindicated by existing evidence.
Practice this with IX Coach
7 days free, then $40/month (~$1.30/day).
More practices for Margin of Safety
- Estimate conservatively and act on the conservative number
When uncertain, use a pessimistic estimate as your working assumption — not your best guess.
- Build in slack — time, money, and energy buffers
Never plan to use 100% of your resources; leave a buffer for what you did not anticipate.
- Design decisions so they work even if some things go wrong
Ask: does this plan require everything to go right? If so, redesign it.
- Discount your estimate to create a margin
If you think something is worth X, only commit at a meaningful discount to X.
- Protect the downside before chasing the upside
Ask what the worst realistic outcome is and ensure you can survive it before evaluating the upside.
Related concepts
- Thinking, Fast and Slow, Made Usable
Two systems, the biases they create, and when to slow down
- Circle of Competence
Know what you know, know what you do not know, and act accordingly
- Second-Order Thinking: And Then What?
Tracing consequences of consequences, the way Howard Marks does
- Inversion: Solve Problems Backward
Munger’s “avoid stupidity” discipline, applied to real decisions