GUEST POST from Mike Shipulski
In business you’ve got to do two things: choose what to do and choose how to do it well. I’m not sure which is more important, but I am sure there’s far more written on how to do things well and far less clarity around how to choose what to do.
Choosing what to do starts with understanding what’s being done now. For technology, it’s defining the state-of-the-art. For the business model, it’s how the leading companies are interacting with customers and which functions they are outsourcing and which they are doing themselves. In neither case does what’s being done define your new recipe, but in both cases it’s the first step to figuring how you’ll differentiate over the competition.
Every observation of the state-of-the-art technologies and latest business models is a snapshot in time. You know what’s happening at this instant, but you don’t know what things will look like in two years when you launch. And that’s not good enough. You’ve got to know the improvement trajectories; you’ve got to know if those trajectories will still hold true when you’ll launch your offering; and, if they’re out of gas, you’ve got to figure out the new improvement areas and their trajectories.
You’ve got to differentiate over the in-the-future competition who will constantly improve over the next two years, not the in-the-moment competition you see today.
For technology, first look at the competitions’ websites. For their latest product or service, figure out what they’re proud of, what they brag about, what line of goodness it offers. For example, is it faster, smaller, lighter, more powerful or less expensive? Then, look at the product it replaced and what it offered. If the old was faster than the one it replaced and the newest one was faster still, their next one will try to be faster. But if the old one was faster than the one it replaced and the newest one is proud of something else, it’s likely they’ll try to give the next one more of that same something else.
And the rate of improvement gives another clue. If the improvement is decreasing over time (old product to new product), it’s likely the next one will improve on a new line of goodness. If it’s still accelerating, expect more of what they did last time. Use the slope to estimate the magnitude of improvement two years from now. That’s what you’ve got to be better than.
And with business models, make a Wardley Map. On the map, place the elements of the business ecosystem (I hate that word) and connect the elements that interact with each other. And now the tricky part. Move to the right the mature elements (e.g., electrical power grid), move to the middle the immature elements (things that are clunky and you have to make yourself) and move to the middle the parts you can buy from others (products). There’s a north-south element to the maps, but that’s for another time.
The business model is defined by which elements the company does itself, which it buys from others and which new ones they create in their labs. So, make a model for each competitor. You’ll be able to see their business model visually.
Now, which elements to work on? Buy the ones you can buy (middle), improve the immature ones on the far left so they move toward the central region (product) and disrupt the lazy utilities (on the right) with some crazy technology development and create something new on the far left (get something running in the lab).
Choosing what to work on starts with Observation of what’s going on now. Then, that information is Oriented with analysis, synthesis and diverse perspective. Then, using the best frameworks you know, a Decision is made. And then, and only then, can you Act.
And there you have it. The makings of an OODA loop-based methodology for choosing what to do.
For a great podcast on John Boyd, the father of the OODA loop, try this one.
And for the deepest dive on OODA (don’t start with this one) see Osinga – Science, Strategy and War.
Image credit: Google Gemini
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