D3.2: Counterfactuals

What is Task D3.2?

Task D3.2 is part of the "Act" phase in the Viability Canvas methodology, specifically within the "Limit Attention" step (Step D3). This task instructs you to "Avoid impractical interventions. Identify interventions that are currently impossible due to excessive time and energy requirements. These actions are deemed impractical and not feasible under current circumstances. By recognizing these counterfactual actions, the organization can avoid investing resources in activities with no realistic chance of success and focus on more attainable goals."

Purpose of Identifying Counterfactuals

The purpose of this task is to bring realism to your change strategy by explicitly identifying and setting aside interventions that, while potentially beneficial, are simply not feasible given your current constraints. This serves several important functions:

1. Focusing on the possible: Directing organizational energy toward changes that have a realistic chance of implementation
2. Managing expectations: Acknowledging practical limitations rather than creating unrealistic hopes
3. Preventing resource drain: Avoiding situations where significant resources are invested in initiatives that cannot succeed
4. Enhancing credibility: Building trust by recognizing organizational constraints rather than ignoring them
5. Creating clarity: Establishing clear boundaries between what is currently possible and what is not

By identifying counterfactuals, you create a more realistic and achievable change agenda.

Understanding Counterfactuals

In the context of the Viability Canvas, "counterfactuals" are interventions that:

• Would require resources far beyond what is currently available
• Would take so long to implement that conditions would change before completion
• Would demand capabilities the organization does not possess and cannot readily acquire
• Face insurmountable structural, cultural, or political barriers
• Depend on external conditions or decisions beyond the organization's control or influence

These are initiatives that might appear theoretically valuable but are practically impossible in the current circumstances. Unlike volatiles (which could be implemented but wouldn't last), counterfactuals cannot be realistically implemented at all.

How to Complete Task D3.2

To identify counterfactuals in your change strategy:

1. Review your Energy Map for initiatives that might be counterfactual:
   • Look for initiatives in the upper-right corner (high energy, long time)
   • Identify changes that depend on resources you don't control
   • Note initiatives that require fundamental shifts in organizational identity
   • Spot changes that face powerful external constraints
2. Assess each initiative against feasibility criteria:
   • Resource requirements: Does the organization have or can it acquire the necessary resources?
   • Timeline: Is the time required compatible with external pressures and stakeholder expectations?
   • Authority: Does the organization have the decision rights and autonomy to implement this change?
   • Capabilities: Does the organization have or can it develop the required skills and knowledge?
   • External constraints: Are there insurmountable regulatory, market, or other external barriers?
3. Draw a boundary line on your Energy Map to separate feasible initiatives from counterfactuals:
   • This is typically drawn as a curve in the upper-right portion of the map
   • Initiatives beyond this line are considered counterfactual in current circumstances
4. Make deliberate decisions about each counterfactual:
   • Remove it completely from your implementation plan
   • Document it as a potential long-term aspiration (if conditions change)
   • Break it down to see if components might be feasible
   • Transform it into a more modest but achievable alternative
5. Document your reasoning for identifying certain initiatives as counterfactual.

Example from Canned Tornado

In the Canned Tornado case study, they identified as counterfactuals:

• Complete ERP redevelopment:
  • Counterfactual nature: Too costly and time-consuming given current financial constraints and urgent operational issues
  • Resource gap: Would require specialized IT resources not currently available and significant financial investment
  • Timeline issue: Full implementation would take 18-24 months, during which operational problems would persist
  • Decision: Removed from immediate implementation plan; replaced with targeted ERP customizations for critical areas
• Complete reorganization of the corporate structure:
  • Counterfactual nature: Too disruptive to implement while maintaining operations
  • Authority issue: Would require board-level approval not likely to be granted during a period of operational challenges
  • Cultural resistance: Would face massive resistance across multiple levels
  • Decision: Removed from implementation plan; replaced with focused restructuring of production department only

By identifying these counterfactuals, Canned Tornado avoided investing valuable resources in initiatives that had no realistic chance of success given their current circumstances.

Strategic Use of Counterfactual Boundaries

The counterfactual boundary on your Energy Map serves as a strategic tool in several ways:

1. Creates healthy tension: Acknowledges aspirations while respecting constraints
2. Provides clarity: Establishes what's in-scope vs. out-of-scope for current planning
3. Invites creativity: Encourages finding alternative ways to achieve similar outcomes
4. Prompts strategic discussions: Raises important questions about how to change the conditions that make certain initiatives counterfactual
5. Evolves over time: As the organization strengthens, the boundary may shift to include previously counterfactual initiatives

By establishing this boundary, you create a change agenda that is ambitious but realistic—pushing the organization to its current limits without setting it up for failure by attempting the truly impossible.