Frameworks — Pragmatic tools for strategic applications
As product or business leaders we keep looking for answers to some key strategic problems every time. Frameworks are the tactical tools to organise strategic thoughts and ideas such that it becomes easier to comprehend, analyse and most importantly present.
As product or business leaders and managers we keep looking for answers to some key strategic problems every time. The problems could be as simple as ‘which feature to build’(oh! I know that ain’t simple), and could be as hard as where and how much to invest, which geography to enter, or could be fundamentally questioning the status-quo “who are we as a company?”.
Frameworks are nothing but simple (generally so) tactical tools to organise strategic thoughts and ideas such that it becomes easier to comprehend, analyse and most importantly present.
Knowingly, or unknowingly, we all use frameworks. And, most of us also may have a couple of favourites. Here, we will see a couple of simple, pretty straight forward, yet powerful frameworks that can come in very handy esp. if you are starting out on a Product or Business Management career.
1. The Two Ends Framework — Two Ends to Start of Everything Strategic
Fundamentally, there are just two ends. And every answer that we are looking for lies between them. You can these two ends, as the two ends of a spectrum. Or, you may also see this as the two ends of a balance like a see-saw. This is the basic premise of the Two-Ends Framework (as I prefer to call it).
Application Example: The Job Role and Expectations
The Product Management role, for example, in a technology company can span through Technology on one end of spectrum to Business on the other end. The PM’s role can involve slightly more interactions with the technology teams, or may be is more inclined to interactions at business level. It may also depend on the phase of company, or even phase of product as to which end of the spectrum you are playing or are expected to play.
As a second example, when the PM acts as a P&L leader as well, then the PMs job is expected to balance the two critical elements of the business, tactical and strategic. Tactical items are the items required to ensure the the Top Line and Bottom Line targets are met for the current financial year, while ensuring that the team is also working towards building products and strategy that shall help meet the numbers a couple of years down the line.
Application Example: Questioning the Status-Quo
Have you ever questioned who you are as a business? Are you a Service or a Product business? Are you a product business, but moving towards a service oriented execution. Or, are you a service company, desiring and moving towards being a product business? If you are a service business, who all will be your competition? And, what about the competition if you are a product business? What is typical valuation multiplier for these competitors? Now, where would you want to be in the spectrum? Why and how would you achieve that?
2. The Two-by-Two Framework — Classical Approach to Every Problem
The two-by-two is by far the most versatile frameworks of all to categorise one’s ideas. It helps compare thoughts by two independent attributes and categorise them into four distinct quadrants. It is applied extensively at so many applications:
- BCG matrix: Growth Rate & Market Share
- Kraljic matrix: Business Impact & Supply Risk
- The ANSOFF matrix: Product & Market
- Gartner’s Magic Quadrants: Execution & Vision
- SWOT: Origin and Effect analysis
Application Example: What kind of content platform would you want to be?
Regardless of the famous matrices, one may also use the two-by-two for analysis of many of the general thoughts. Let’s say if I want to build a content platform, then the two independent attributes could possibly be: quantity and quality, i.e., quantity of content, and quality of content. The four quadrants could then be a combination of Low-High of each of these two, giving a 2x2 matrix.
Since, high quality content platform, and high quantity content platform are both expected to attract specific segment of readers both that be equally sustainable business models. However, one wouldn’t want to be in the bottom left quadrant signifying low quality as well as quantity. We all know that platform wouldn’t go anywhere.
Top right quadrant would be high quality as well as quantity. That is a really hard place to be. If I see Harvard Business Review (HBR) as a content platform, then it could very well be there. But, we all know, it hasn’t reached there overnight. It takes years and sometimes decade to be able to build that moat. Once you put down the possible names in all four quadrants you can possibly think of where the starting point could be.
Natural Extension: Three-by-Three
Similar to above two-by-two where the two independent attributes are distributed into low and high to give a 2x2 matrix, in case of a three-by-three another dimension of “medium” is added to the mix giving a 3x3 matrix.
A classical application of the same is the GE-McKinsey 9-Box Matrix, a framework that offers a systematic approach for the multi-business corporation to prioritise its investments among its business units, which is similar to the BCG growth-share matrix.
“Placement of business units within the matrix provides an analytic map for managing them. With units above the diagonal, a company may pursue strategies of investment and growth; those along the diagonal may be candidates for selective investment; those below the diagonal might be best sold, liquidated, or run purely for cash.”
Multi-Attribute Extension — The Daisy Graph
When you go a level deeper in the problem, you see that though there are just two attributes, but may be Low, Medium and High just doesn’t cut it and there are many more levels which command attention.
For example, when running customer segmentation you have plethora of different dimensions on which you might be creating those segments. There could be cut at six industries let’s say, then it could be how deep is your understanding of each, or may be the size of the companies, or may be the complexity of the problem.
Or, when you are a General Manager or Product Leader and you want to dissect your R&R across different verticals that you might be stretched into.
If you google, you should be able to find JSFiddle templates to draw the graphs easily.
3. The AITB Framework — Carving out the path to where you want to be
The As-Is to To-Be Framework, or as I like to call it the AITB Framework, is essentially a dreamers tool and always pushes you to question the fundamental premise of building a strategy: ‘Where do you want to be?’
On the two axis you plot where you want to be in a certain time. Then, you take stock of where you are. And finally, you plot the roadmap from where you are to where you want to be, i.e., list down the path you will take, milestones you will achieve, themes you will work for and most important identify and plan for risk mitigation.
There are two ways to look at this. One way is “incremental step forward” where you start from As-Is and then define the To-Be keeping the constrains of present in mind.
The other way is to “dream forward” where you want To-Be first, without any limitations, and work backwards from there to the present and what you need to do. This helps with keeping any bias out and then plan for resources accordingly, rather than letting current resources decide where you could be.
Both the approaches are important as the context in which you may apply one or the other is important to understand. For a reason we are calling out the latter as “dream forward”. :-)
Application Example: Three Years from Now
In current business context, three years seems long-term. Often we build on business strategy or product strategy for three to five years out. When doing that, there are some inherent goals that must be achieved. It could be revenue numbers, margin numbers, market share numbers, geographic expansion etc.
When you plot these goals on vertical axis against time on horizontal, while clearly calling out the numbers you may see the trajectory required. Then you break down piece-by-piece what you may want to focus on annual or bi-annual basis. As an example above, clearly the goal for first year is aggressively focus on bottomline. Thereafter, the focus shifts towards aggressive topline numbers while only marginal growth is seen in bottomline.
We can then clearly call out the focus and themes on a YoY basis for different departments such that the goals are met. From here on, it would be detailing out each piece at the team level with clear target metrics that define success.
So, we saw three of the most fundamental and simple frameworks that we can use for organising any set of ideas and thoughts, and going deeper from here on. Of the two-ends framework, the two-by-two and the AITB framework, I must say, the two-by-two is incredibly powerful.
Using frameworks and thinking through them is definitely about analytical thinking, but I believe, its more about getting used to the concept as well. I would highly recommend to pick some generic problem and run that through all the frameworks discussed. You may discover something amazing.
One common problem to work through could be analysing your work, roles & responsibility, where you want to be in your career, what skills gaps you see and how to build those. Or, if you are unhappy at your current role, think about which role in past made you happy, and run that through some of the frameworks.