Do You Really Need a Business Framework?

For just a minute, imagine that we are based in China and have developed a new electric vehicle that we want to sell in Europe.

Which business framework would we use?

Well, here’s the catch: I don’t think we would use one at all.

What we would need to do is make sure the vehicle performs exactly as it was designed to perform—and, ideally, that it has some significant advantages over the other electric vehicles already on the market.

We would establish a reliable supply route into Europe and build an appropriate dealer network in the countries we have decided to target. We would arrange reviews with well-known motoring journalists and influencers. And we would set a price that is competitive and attractive to potential buyers.

In other words, we would launch the car by making sure we have the right product, in the right place, at the right time and at the right price.

That sounds remarkably like the famous 4Ps of marketing: Product, Price, Place and Promotion. And yes, the 4Ps is a framework.

But, honestly, is it really a framework that we need to sit down and apply?

Or is it simply the natural way to launch a new product?

It is rather like a chef preparing a chicken. The chef prepares it, puts it in the oven for the appropriate length of time, takes it out and serves it.

You could call that a recipe. But if the recipe is obvious, do we really need to draw a diagram to remind ourselves what to do?

Frameworks are for problems

I make this point because, as a promoter of business frameworks, I sometimes worry that people might conclude that frameworks are required all the time.

They aren't.

In fact, I would argue that if there isn't a problem, you probably don't need a business framework.

Frameworks are useful because they help us tackle problems that are difficult, complicated, ambiguous or unfamiliar. They give us a way of breaking something down, looking at it from different perspectives and making sure we haven't overlooked something important.

But when the answer is obvious, don't turn it into a complicated exercise just because a framework happens to be available.

So when might we actually need one?

When should you use a business framework?

1. When the problem is broad or ambiguous

Sometimes we know something is wrong, but we don't know exactly what.

Perhaps a business has lost its direction. Perhaps its business model no longer seems to work. Perhaps management knows that change is needed but cannot agree on where to start.

This is where a framework can be extremely valuable.

A framework such as the Business Model Canvas, for example, can provide a 360-degree view of how the business creates, delivers and captures value. It gives us a structured starting point when the problem itself is still rather vague.

The important point is that the framework helps us find the problem. It isn't the answer in itself.

2. When you need to diagnose a complicated problem

Suppose profits have fallen dramatically.

"How do we increase profits?" is not a particularly useful question on its own.

We need to break the problem down.

Profit is revenue minus costs. So we might investigate whether sales volumes have fallen, whether prices are too low, whether the product mix has changed, whether competitors are taking customers, or whether costs have increased.

A framework can help us separate a large, intimidating problem into a series of smaller questions.

The same applies to poor customer satisfaction.

If customers are giving us low satisfaction scores, we need to know where in the customer experience the problem occurs. A customer-journey framework can help us examine the whole journey from initial awareness and purchase through to delivery, use, service and renewal. It helps us identify where attention is needed.

3. When you need to get a team aligned

A framework can also provide something that is often underestimated: a common language.

Imagine a management team discussing the future strategy of a business. One person is talking about customers, another about competitors, another about capabilities and another about financial returns.

Everyone may have a valid point, but they can easily end up talking past one another.

A framework provides a structure within which everyone can contribute. It gives people a shared vocabulary and helps them understand how their particular responsibility fits into the bigger picture.

This can be particularly useful when a strategy needs to be communicated and implemented throughout a large organisation.

4. When you are making an important long-term decision

Some decisions deserve more than a quick answer.

When the consequences are significant and difficult to reverse, it can be useful to deliberately slow down our thinking and examine the problem from several perspectives.

This is where frameworks based on System 2 thinking can be helpful. They encourage us to move beyond our immediate instincts and examine the evidence and alternatives more carefully.

The framework is, again, a means to an end: helping us make a better-informed decision.

When shouldn't you use a business framework?

There is another side to this argument.

Knowing when not to use a framework is just as important.

1. When the answer is already clear

If someone asks you for a single number, a simple calculation, one chart or a straightforward interpretation of data, you don't need to wheel out a framework.

If the evidence tells you what the problem is and what needs to be done, tell people.

Problem. Cause. Solution. Action.

Sometimes that's all that is required.

2. When the business is in crisis

There are times when you don't have days or weeks to analyse a problem.

If the boat is sinking, you don't want someone standing on deck explaining the theoretical framework for water displacement.

You want someone to find the hole and plug it.

In a crisis, instinct, experience and rapid System 1 thinking may be more valuable than exhaustive analysis. There will be time to conduct the post-mortem later.

3. When the framework becomes a box-ticking exercise

This is one of my biggest concerns.

A framework can make us feel that we are doing something useful when, in reality, we are simply filling in boxes.

There is a danger that frameworks become an administrative exercise: something to make a presentation look sophisticated, to demonstrate that we have followed a recognised methodology, or simply to make ourselves feel that we have made progress.

But business isn't an academic examination.

Sometimes the answer is obvious.

Just get on with it.

4. When you are forcing a square peg into a round hole

Perhaps the worst use of a framework is to start with the framework rather than the problem.

Someone who has recently left business school might be tempted to reach for SWOT, Porter's Five Forces, PESTLE or another famous model because that's what they have been taught.

But a famous framework isn't necessarily the right framework.

The question shouldn't be:

"Which framework can I use?"

It should be:

"What problem am I trying to solve?"

Only then should you consider whether a framework will help.

Three rules for using frameworks

After many years of working with business frameworks, I have come to three fairly simple conclusions.

Start with the objective

Be absolutely clear about what you are trying to achieve.

The business objective matters far more than the name of the framework.

A framework is simply a tool to help you achieve the objective.

Keep it simple

Don't make a problem more complicated than it needs to be.

Use a framework to structure your thinking, identify the important issues and reach a conclusion. And once you have done that, put the framework away.

What matters to the business is not the clever diagram you produced. It is the clarity of your thinking and what you do as a result.

Don't use a framework for the sake of using a framework

This, perhaps, is the most important rule of all.

A framework is not the destination. It is the vehicle.

If the road ahead is clear, you don't need a map.

If you are lost, however, a good map can be invaluable.

That is how I see business frameworks. They are not a requirement for doing business. They are tools for those occasions when the problem is sufficiently complicated, uncertain or important that some structure will help us find our way.

And sometimes the smartest thing you can do with a framework is to recognise that you don't need one.