Creating Business Frameworks
Business frameworks can seem so very simple. Sometimes you wonder what all the fuss is about. “Why didn’t I think of that?”. That’s the thing about frameworks, the best ones are very straightforward. They are like putting on a pair of spectacles and everything snaps into perfect sight. In this article we introduce four framework styles that can readily be adapted to meet most business strategies.
Many of the business frameworks are based on an X and Y axis. The Ansoff framework has on the vertical axis existing markets and new markets and existing on the horizontal axis are products and new products. It so clearly positions every conceivable move for product expansion in four quadrants.
So, how could you develop your own framework? The starting point is to think about the situation you are analysing. Does it have two important dimensions? Is it price versus product quality; is it ease of doing business versus responsiveness; is it frequency of contact versus loyalty? Placing one dimensional on the x-axis and one on the y-axis can produce a very useful framework. An example is the Directional Policy Matrix which plots market attractiveness against competitive strength of the offering. The matrix provides a strategy for action. It points to segments that are closely aligned to a company’s strengths and the actions that can improve a company’s position within certain customer groups.
Other business frameworks are based on sequences of things happening. A major housebuilder commissioned a survey to understand how it could improve its sales process. Our colleague who carried out the survey positioned the key sequences in buying a house in the form of a snakes and ladders board. It showed how significant events such as obtaining finances, getting a special deal, the building phase and so on determined whether the customer felt like a winner or loser in this most important journey. It also raised the possibility that a couple buying a house may be driven by different motivations. One could prefer a new house and the other may want an old or more established house. In this expensive game of house buying, it was determined that a lot depended on the sales person. If someone is lucky enough to have a good salesperson it is like throwing a six on a dice. No model is perfect and indeed the snakes and ladders metaphor was fairly crude but it located key points in a very memorable way and opened a great debate. The framework will be remembered long after many of the facts and statistics of the survey are forgotten.
Customer journey on a snakes & ladders board
If the problem you are analysing has a number of sequences, it may require you to do no more than lay them out in order – step 1, step 2, step 3 etc. for example a simple model for new product development could be:
You can see how it would be possible to build on this framework by adding bullet points below each step to indicate what is required.
Sometimes business models have a number of things going on which connect and interact with each other. For example, someone developing a PR campaign for a company may want to consider the connections and interactions between employees and customers, employees and suppliers, suppliers and customers, employees and stakeholders etc. This could be shown in a framework which shows the interactions between the various parties with different sizes of arrows to indicate the importance of the communications campaign.
Frameworks are important and quite possibly there are well known ones you can find that will serve your purpose. However, our message is that useful as they are, business frameworks should not be regarded as the Holy Grail. Just as we can get tired of the use of Smart Art in PowerPoint, we should be careful not to use models as cookie cutters. Familiarise yourself with frameworks of all kinds and most importantly, experiment and design your own.