Eight Bits of Premortem in Business

Everyone knows what a postmortem is; it is usually associated with performing an autopsy to discover the cause of a patient’s death or the extent of disease (Oxford Dictionary definition). Postmortem certainly gives us the knowledge of what happened or might have happened and provides valuable information to save others. It benefits everyone except the dead. This may seem like a morbid start, but you'll soon understand the relevance. 

Have you heard about the term premortem? It is the hypothetical opposite of a postmortem. I read an old HBR article about Project Premortem. In that article, the author states: “Research conducted in 1989 found that Prospective Hindsight – imagining that an event already occurred – increases the ability to correctly identify reasons for future outcomes by 30%. A premortem in a business setting comes at the beginning of a project rather than the end, so that the project can be improved rather than autopsied.”

Premortem, in business, is a technique where we purposefully imagined a project plan has failed and find all possible reasons for the outcome. Once we have the list of reasons, we then go back and tweak our plan to address all the possible places where it could fail and mitigate/minimize the risks proactively. This is typically used in large projects or a product release or  when expanding into a new market/business.  However, I think we all can apply some parts of this technique to avoid challenges, rework, and improve accuracy in our Pay, Bill, Reporting, Forecasting etc. I know not every system/process/application we use today gives us the best experience all the time and has limitations. We are constantly looking for ways to innovate and improve with the best options available. But, let’s put that aside for now and focus on what we could do to reduce the need for postmortem in the things that are in our control, the process and the data.

We all enter/store several bits of data in many systems/tools/applications to perform business operations related to hire, manufacture, pay, bill and collect as part of our jobs. This information is then used by someone to perform their tasks or for auditing, reporting and analyzing business performance.  It is critical for all of us to understand the downstream impact of the data that is being entered. By doing this, we could avoid others having the need to perform postmortem in case of any issues. In other words, perform a quick premortem of the potential impact of the data being entered incorrectly or not entered at all, and we could reduce the discrepancies and rework.

Some of the data entered is critical to the accuracy of timely processing of payroll, supplier payments, billing and cash collection, which has a direct impact of our financial performance. For example, when we hire someone, the accuracy of personal data entered including pay rate, dependencies or benefit plans has a tremendous impact on how the pay is calculated or who is eligible for health benefits, etc.  Delayed time approvals result in expensive postmortem and delays in payroll. If there are errors in setup or charge codes, it has even bigger impacts due to inaccuracy of invoices resulting in unpleasant customer experience. While we have checks and balances in the systems for certain conditions, the system is only as good as the process and accuracy of the information entered.   

We are in the strategic planning season. Before you start executing the plan, make sure you perform premortem and tweak it to address any risks/challenges proactively for future success. For our daily success, let’s work together to improve data accuracy at the source and reduce the time spent on autopsies.  Remember, every byte counts!  :-)

Ref: HBR Article F0709A by Gary Klein