Assumptions we need to question now

Rita McGrath
7 min readMar 18, 2022

My area isn’t geopolitics. I’ve been hesitating to opine about the horrible situation in Ukraine. It took a lot of people by surprise because Russia’s invasion flew in the face of so many assumptions we had been making. Now would be a good time to revisit some of them.

Like it or not, we’re in a space now where our ratio of assumptions to knowledge is terribly high. Human beings are terrible about handling assumptions — either we forget them altogether or we turn them into facts in our minds. Now might be a good idea re-assess the assumptions we’ve been making … and what we will do if they no longer hold.

Here are 10 to think about now:

1. BRICS would be exciting sources of global growth

Back in 2001, Goldman Sachs’ Chief Economist Jim O’Neil predicted that four countries — Brazil, Russia, India and China — would provide rich rewards for those adventurous enough to invest in them. And you know what? He was right — for a while at least. The assumption that these four countries would be increasingly wealthy and westernized seemed to be working really well for the following decade. In 2010, South Africa was added to their number to have its acronym go from BRIC to BRICS.

While the end of the BRICS dominance has been clear for a while (Goldman Sachs shut down its BRICS fund in 2015), any lingering faith in the idea is gone for good.

2. Energy costs would remain fairly stable

Back in 2020 (who would think we’d have a reason to look fondly at 2020???) pundits were predicting fairly stable, even somewhat lower, energy costs. Now, oil prices are predicted to rise and depending on who you ask, potentially sharply. So can we imagine price increases in the 25%, 35% or even higher region? Higher gas prices annoy consumers and often have political ramifications.

3. Inflation? That’s so 1970’s

Amazingly, two entire generations of managers have never known a high-inflation environment. My colleague and co-author Ram Charan points out that the executive agenda in an inflation beset economy changes dramatically. Under inflation, cash is king and every mistake gets magnified. Ram is going to be…

Rita McGrath

Columbia Business School Professor. Thinkers50 top 10 & #1 in strategy. Bestselling author of The End of Competitive Advantage & Seeing Around Corners.