By Pat Alacqua, initially published by Dialogue Review, one of the world’s premier leadership and management journals (a Duke Corporate Education publication)

In an uncertain world, organizations can improve their preparedness by focusing on the future – and deciding how they will act under certain scenarios.

Even the most experienced executive teams are finding Q1’s plans outdated by Q2. Perhaps the market shifts, the budget gets cut, or a competitor launches faster. Suddenly executives are reacting, not leading.

That feeling of being blindsided is more common than most leaders care to admit. In today’s environment, even the best strategies can fall apart quickly. Uncertainty isn’t the exception; it’s the operating climate. So how do the best companies keep moving forward?

How they adapt starts with how they manage their assumptions. They plan differently. They build smarter systems that prepare them to pivot when the plan breaks.

The best-run companies follow a pattern. From startup to successful enterprise, they evolve in how they think about planning and how they prepare teams to respond to change. That evolution has four stages. 

Stage 1 Managing activities Startups live here. Plans are built on tasks, timelines and checklists. It works early on, but complexity eventually outgrows it.

Stage 2 Managing budgets Next comes financial control, forecasts, spending targets and cost discipline. It’s necessary, but often backward-looking.

Stage 3 Managing objectives Strategic focus improves. Leaders begin aiming for results, not just completion of tasks – but objectives still assume a level of stability that rarely exists.

Stage 4 Managing planning assumptions This is where elite companies operate. Instead of planning around what they want to happen, they build around what they believe to be true, and design a system to respond when assumptions break.

The mindset shift is critical – but mindset alone doesn’t get the job done. The best leaders operationalize this approach using a forward-focused system, which I call the Windshield Process. It keeps your eyes on what’s coming, not just what’s already happened. Traditional planning is rearview – it looks at last quarter’s results and builds a plan to fix or repeat them. Far better to flip that and look forward.

Yet while having a long-term vision is important, detailed 10-year or even five-year plans rarely hold up. I generally recommend focusing on a three-year horizon – but whatever your time frame, you need a planning approach that allows for adjustment without chaos. You can then pivot as needed before the business veers off track. There are four key steps to developing a flexible three-year plan.

Step 1: Identify trends that shape your assumptions

Start by defining the assumption categories that matter most in your business. These differ by industry. Some companies focus on demand, customer behavior, labor or economic trends. Others track things like vendor reliability, tech adoption, regulations or capital access. Within each category, scan for signals: favorable trends that present opportunity or acceleration, and unfavorable trends that point to risk or disruption.

Don’t settle for surface-level forecasting. Great companies pressure-test both sides. They recognize that upside momentum can be just as disruptive as downside risk.

Step 2: Assign a thermometer and a thermostat 

For each trend, define two components that bring your response system to life. Your thermometer is the measurable indicator that tracks the trend. It might be the pipeline conversion rate. But don’t stop there. You should also set a thermostat – your trigger for action. For example: “If pipeline conversion stays under 25% for five weeks, pause hiring and focus on retention.”

Most teams have thermometers. Fewer define thermostats. Without both you’re always behind, debating instead of deciding. Having a thermostat can help instill confidence, and get you out of a constant cycle of reacting to events. 

One service company I worked with was struggling to adjust its staffing amid unpredictable onboarding swings. When they reacted to market changes, it was already too late to scale up or pull back. So they implemented a simple thermostat: when their pipeline conversion dropped below 25% for two straight weeks, they paused hiring and shifted attention to client expansion.

That single trigger stabilized operations and changed how the company thought. People weren’t reacting to fires. They were working a system. And they put their trust in leadership that had already looked ahead.

Step 3: Determine what happens next 

Once you’ve set your thermostat, ask: If this continues, what happens to the plan? What’s the cost? The customer impact? The internal shift?

Think it through now because when the trend accelerates, you won’t have time to figure it out from scratch. Plans don’t fail on paper. They fail when no one knows what to do as conditions shift.

Step 4: Take corrective or opportunistic action

Define the move. If the trend plays out, what will you do? To pursue the upside, consider how to accelerate, invest and act with intent. To counter downside requires a different response: adjust, reroute and protect core priorities.

This is where the Windshield Process earns its value. It creates action-readiness, not just awareness – but it only works if it becomes part of your rhythm. It’s not an annual exercise or something reserved for quarterly reviews. Leadership teams should set aside an hour a month to revisit their assumptions. Each participant brings trend shifts or adjustments that are needed. The meeting doesn’t have to be long, but it does have to happen.

Prepared for all eventualities

Managing by planning assumptions doesn’t mean throwing out strategy. It means staying light on your feet while staying aligned at the top. The benefits are far-reaching. Teams know what to watch for and when to act. Leaders stop being surprised by change. Execution becomes faster, clearer and more confident. And plans evolve in motion, not just in review meetings.

The aim is building a culture of preparedness – because while most companies have a plan, fewer have a preparation system. In today’s world, strategy alone isn’t enough. The ability to anticipate, adjust and stay ready sets real leaders apart.