Strategy frameworks – The death of creative thinking

What are strategy frameworks, and why are they so useful?

“Conformity is the jailer of freedom and the enemy of growth.” – John F. Kennedy

Strategy has ancient roots, with one of the earliest documented discussions in Sun Tzu's "The Art of War," written around 400 B.C. This seminal work on military strategy has influenced strategic thinking for centuries. In a business context, strategy as a formalized concept began to take shape in the mid-20th century. For example, the Boston Consulting Group played a significant role in developing strategic frameworks in the 1960s.

According to an article in the Harvard Business Review, strategy frameworks are structured approaches or lenses to conceptualize, develop, and implement strategic plans. These frameworks serve as guides to help organizations define and reach their vision, mission and goals. Furthermore, these frameworks help businesses understand their competitive environment, evaluate performance, and make informed decisions about where to play and how to win. They provide a systematic way to approach business challenges and opportunities, helping organizations to assess options, and align their strategies with their goals and the external environment.

Strategy frameworks bring many specific high-performance benefits, which include:

• Clarity and focus: They help businesses define their goals and the activities needed to achieve them. This ensures everyone in the company is aligned, working towards the same objectives or as I like to say singing to the same hymn sheet. As a Forbes article describes, an excellent strategic framework provides focus by limiting the number of directions the organization runs in.

  
  

• Informed decision-making: Strategy frameworks enable better decision-making by providing a structured and organized approach to assessing the business environment. They help uncover and identify opportunities and threats, evaluate strengths and weaknesses, and understand competitive threats and dynamics. Frameworks made the hidden more obvious.

  
  

• Consistency: Using a framework ensures that strategic planning is consistent and structured across the organization in terms of how information is gathered and evaluated. This consistency helps maintain a unified approach to achieving business goals.

  
  

• Efficiency: Frameworks streamline the strategic planning process, saving time and resources. They provide a clear roadmap, and approach and structure, which can reduce the complexity and uncertainty often associated with strategic planning.

• Communication: According to an article in MIT Sloan Review, executives are increasingly urgently needed to ensure that their communications practices contribute directly to corporate strategy implementation. Leveraging well-articulated frameworks facilitates better communication of the strategy within the organization. Using a common language and structure makes it easier to explain, remember and understand the strategic plan.

• Flexibility: Strategy frameworks can be adapted to different business contexts and challenges. This flexibility allows organizations to respond effectively to changes in the market or industry.

Typical frameworks that have stood the test of time.

When you think about typical frameworks that have stood the test of time, maintained usefulness, and been used extensively by management teams, a few come to mind. For example, Porter's Five Forces, SWOT, Balanced Scorecard and PESTEL analysis are a few, but many more are explained in my recent book, Outside In, Inside Out.

Porter's Five Forces is a framework is one I’ve used a lot, that helps analyze the competitive forces within an industry, including the threat of new entrants, the bargaining power of suppliers and buyers, the threat of substitute products, and competitive rivalry. Another classic is the SWOT analysis, which helps organizations identify their internal Strengths and Weaknesses and external Opportunities and Threats. It is useful for strategic planning, decision-making, and understanding the current state ahead of making strategic decisions.

As Peter Drucker once said, “what gets measured gets managed.” The Balanced Scorecard is a strategy framework that translates an organization's vision and strategy into performance measures across four perspectives: financial, customer, internal business processes, and learning and growth. A final classic is the PESTEL Analysis, developed by Harvard Professor Francis Aguilar, helps examine the Political, Economic, Social, Technological, Environmental and Legal factors that could impact an organization. It is often used to understand the broader environment in which a business operates, especially when undertaking scenario planning related exercises.

However, frameworks can be overdone and should not replace creative thinking.

In my book Outside In, Inside Out, I highlight the value of various frameworks and their essential role in strategy creation and execution, including the outside-in and inside-out approach that I have developed, but proceed with caution. As explained in an MIT Sloan Review research paper frameworks are everywhere in business. Some have had a lasting impact on strategy and have become game-changers in how we think about strategy development and execution. However, overusing strategic frameworks can be problematic for several reasons.

1. Context-specific - Many strategic frameworks have been developed based on specific contexts or industry sectors. They are intended to simplify complex issues and provide structured solutions. However, applying them indiscriminately in unrelated situations can lead to an exercise that lacks contextual relevance and may limit creative thinking. Classic business school-type frameworks, when overused, can lead to the adoption of cookie-cutter solutions. Organizations may simply follow the prescribed steps without fully understanding their underlying issues and tailoring the approach to their needs. This can result in generic and superficial strategies that do not address the organization's unique challenges.

2. Overlooking internal expertise - Another weakness when adopting generic strategic frameworks is that organizations often fail to rely on internal expertise and knowledge within the company. Trusted employees often deeply understand an organization's strengths and weaknesses and industry dynamics and have great ideas hidden in the bowls of the business. Ignoring their insights and relying solely on external frameworks can undervalue internal capabilities and important opportunities can be missed by leadership.

3. Lack of flexibility - Relying too heavily on predefined frameworks can make organizations less adaptable to changing market conditions. When blindly following a framework business might miss opportunities or fail to respond effectively to threats because they are too focused on following a rigid plan, which can suppress unique and unconventional ideas.

   
   

4. Oversimplification - Strategy frameworks often simplify complex business environments into neat categories. In world fraught with complexity this can lead to an incomplete understanding of the nuances and interdependencies within the business, resulting in poor decision-making.

5. Misalignment with unique needs - Every business is unique, and a one-size-fits-all approach may not address specific challenges or leverage unique strengths. Overusing generic frameworks can lead to strategies not well-aligned with the company's actual needs and particular circumstances.

6. Implementation challenges - Even the best strategies can fail if not implemented properly. Overreliance on frameworks can lead to a focus on planning and analyzing, at the expense of execution, resulting in strategies that look good on paper, with great slide presentations, but are challenging to implement effectively.

7. Stifling creativity - Overemphasis on structured frameworks can be the death of creative thinking and innovation. Employees might feel constrained by the need to fit their ideas into a specific model, which can limit out-of-the-box thinking.

Combing targeted strategy frameworks with creative thinking paves the way to success.

As described, be careful overusing strategy and business-related frameworks as they can lead to contextually irrelevant strategies, overlook internal expertise, reduce flexibility, oversimplify complex environments, kill innovation and creativity, and misalign with unique business needs. British author, speaker and international advisor on education Sir Ken Robinson put this all into perspective when he wrote, “too often our educational systems don’t enable students to develop their natural creative powers. Instead, they promote uniformity and standardization. The result is that we are draining people of their creative possibilities and producing a workforce that’s conditioned to prioritize conformity over creativity.”

To drive high performance each organization and its unique circumstances will require a more tailored and creative approach rather than a one-size-fits-all framework. And that is where the holistic outside-in, inside-out strategic planning process comes in. A well-integrated outside-in, inside-out strategy can help companies simplify and align their goals and objectives across all departments and stakeholders and create a creative and more original roadmap for growth and sustainability suited to their needs, capabilities, and priorities.

By Dr. Lance Mortlock – Author of Outside In, Inside Out – Unleashing the Power of Business Strategy in Times of Market Uncertainty, EY Canada Managing Partner Industrials & Energy, Strategist & Adjunct Associate Professor