When in Doubt, Apply a Framework (but be sure to keep them fresh!)
I’ve always been a big believer in the consistent application frameworks for business thinking and decision-making. Frameworks are just a great starting point to spark conversation and organize thinking, especially when you’re faced with a new situation. Last year, I read Tom Friedman’s new book, Thank You for Being Late: An Optimist’s Guide to Thriving in the Age of Accelerations, and he had this great line that reminded me of the power of frameworks and that it extends far beyond business decision-making:
When you put your value set together with your analysis of how the Machine works and your understanding of how it is affecting people and culture in different contexts, you have a worldview that you can then apply to all kinds of situations to produce your opinions. Just as a data scientist needs an algorithm to cut through all the unstructured data and all the noise to see the relevant patterns, an opinion writer needs a worldview to create heat and light.
In Startup CEO, I wrote about a bunch of different frameworks we have used over the years at Return Path, from vetting new business ideas to selecting a type of capital and investor for a capital raise. I blogged about a new one that I learned from my dad a few months ago on delegation. One of my favorite business authors, Geoffrey Moore, has developed more frameworks than I can count and remember about product and product-market fit.
But all frameworks can go stale over time, and they can also get bogged down and confused with pattern recognition, which has limitations. To that end, Friedman also addressed this point:
But to keep that worldview fresh and relevant…you have to be constantly reporting and learning—more so today than ever. Anyone who falls back on tried-and-true formulae or dogmatisms in a world changing this fast is asking for trouble. Indeed, as the world becomes more interdependent and complex, it becomes more vital than ever to widen your aperture and to synthesize more perspectives.
Again, although Friedman talks about this in relation to journalism, the same can be applied to business. Take even the most basic framework, the infamous BCG “Growth/Share Matrix” that compares Market Growth and Market Share and divides your businesses into Dogs, Cash Cows, Question Marks, and Stars. Digital Marketing has disrupted some of the core economics of firms, so there are a number of businesses that you might previously have said were in the Dog quadrant but due to improved economics of customer acquisition can either be moved into Cash Cow or at least Question Mark. Or maybe the 2×2 isn’t absolute any more, and it now needs to be a 2×3.
The business world is dynamic, and frameworks, ever important, need to keep pace as well.