Todd Whittington: The strategic structure — Using a framework to manage business uncertainty can help you process it

The world of technology startups is dominated by one overriding characteristic: uncertainty. Uncertainty in marketing, feature sets, customer needs and even in revenue models nip at founders as they strike out and try to create something new.

Uncertainty is not exclusive to young companies, as executives from small businesses to multinational corporations confront the unknown daily. We can wade into the froth of data and events and hope not to be pulled under, or we can employ a technique that compiles the input and processes it in a manageable way — the strategic framework.

In startups, one framework gaining popularity is Lean Startup. For the more seasoned business, frameworks come in all shapes and sizes. Sales alone has hundreds of frameworks for acquiring customers. For strategy, most are born from management consulting, like Porter’s Five Forces or the GE-McKinsey Nine-Box Matrix.

Helping reduce cognitive load

The mind is a wonderful processor, but the amount of information needed to predict the future and make decisions is overwhelming for even the brightest, i.e., the failed Long-Term Capital Management hedge fund.

Frameworks provide the structure and methodology for systematically categorizing data and modeling it so that it makes sense. They work because they are essentially organizational heuristics — techniques for problem-solving that use mental shortcuts to reduce cognitive load.

Business frameworks tend to be fast and thrifty, leading to solutions that are effective but not necessarily optimized.

Choosing the best framework

Unfortunately, it’s difficult to attribute the effectiveness of a business solely to the application of a particular framework.

In psychotherapy, there is extensive research behind which of the myriad forms of therapy, from cognitive behavioral to narrative therapy, is the most effective. The results of meta-analyses of these frameworks yield a surprising result: Not one approach works consistently better than others.

While psychotherapy as a whole is unquestionably effective, the specifics of the schools of thought are not important. The takeaway is that using a framework is much better than not using one.

Some flexible considerations for frameworks:

  • Any framework approach is better than none. A framework should be consistent with your intuition and past experience.
  • Favor simplicity over complexity. The mind has a love affair with complicated ideas but complex does not equal better.
  • A framework requiring a process implementation that creates more overhead than any potential gain is doomed.
  • You don’t need to know why a framework is effective, but be aware of the basic underlying assumptions. If those basic assumptions are no longer valid due to market conditions or a changing environment, it’s time for a change.
  • Try to avoid jumping into the next cool framework, unless the bell of intuition rings. But conversely, don’t be a zealot for any particular approach.

Framework thinking is designed to allow strategic decisions to be made using a simplified model of the business’s ecosystem by avoiding two sins of the CEO — paralysis by analysis or jumping to conclusions with no supporting data.

Todd Whittington is the executive director of 10xelerator, a technology startup accelerator in Central Ohio. Todd has had a winding career path focusing around innovation processes, user acquisition marketing and operations improvement with a strong bent towards measurement and analytics.

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