We are moving along in our thread about strategic starting points. The overall question is how can we get better at finding them. Finding the answer, we discover, takes us on a path into our psychology.
At this stage, we are sorting out two different types of strategic commitments. Do we need to “break the mold” or “use the mold”. Both decisions will have a domino effect, so we want to get it right. in choosing how to add value over time.
Jeff Bezos offers some insight to help us out. Jeff notes that there are two type of strategic decisions. The first type is the “core” or “framework” decision. This is the belief that you are confident enough in that you feel compelled to act on it. In Jeff Bezos’ world, deciding that people will always want lower prices i creates a framework for how he will structure all sorts of future decisions.
The second type of decision is when we experiment to improve how we can achieve our framework goal. So, we might think that tougher negotiations with suppliers might give us lower base costs and allow us to sell at lower prices. We might then start experimenting with those negotiations.
We expect experiments to fail. That is ok. We can learn from it. it is a much bigger strategic problem if we start seeing evidence that our framework decision has no basis in reality. When going forward, we start getting surprised by data.
We can think of a framework decision as the choice that dictates what molds we will use. and what molds we might break. Again, using Jeff’s example, if people always want lower prices, Jeff saw an opportunity to deliver that using e commerce. He broke the mold of how retail traditionally operated in bricks and mortar stores. And he committed to using a new mold – the e commerce platform.
The key point here is that molds have no inherent value unless they fit into a usable framework that helps us predict what will happen over time. Not that it will be “correct”, but that it will be “predictive”. Committing to an e commerce platform just for the hell of it is not a great strategic starting point.
So we have reached the stage where we need to see more clearly what framework decisions look like. That is next.