By Laura Patterson and Anand Thaker
Companies who have experienced cyberattacks, data breaches, unplanned IT outages, interruption of utility supplies, adverse weather, or global economy shutdowns understand the importance of business continuity. Proactively planning to avoid and mitigate risks associated with a disruption of operations is the essence of business continuity.
People and what they know are essential to business continuity. It was Tom Stewart in his 1994 Fortune magazine article who warned companies to focus less on what they own and more on what they know: their intellectual capital.[1]
The trend in the loss of intellectual capital is disconcerting. According to research by Oxford Economics, an estimated two million workers have left the workforce to retire since the start of the pandemic. This number is more than double that of people who left the labor force to retire in 2019. While participation among workers aged 55 and over fell less during the initial stages of the pandemic, it continues on a downtrend since last summer, and it is currently lower than at the worst of the crisis. Drucker believed that knowledge is the basis of competition.[2]
Here is the critical question: if your business were to lose critical members of your team would it be able to continue to function with as little disruption as possible?
The loss of this intellectual capital certainly has implications for sustainable performance and your organization’s ability to maintain normal operations. It’s difficult to quickly replace this degree of organizational capital and the institutional knowledge and codified experiences it represents.
Experience gathered over a long career is far more valuable than intelligence.[3] Bringing on smart talent is smart business, but it’s the ability to learn that allows us to turn experience into an advantage. This learning takes place progressively over time. Skill in learning makes it possible to master discipline after discipline easier and faster. The more a person masters, the greater their ability to see the big picture, avoid pitfalls, and create successful plans and processes.
Frameworks Help Close the Experience Gap
With decades of experience working with young, smart, energetic people just entering the workforce, it is easy for us to see how the gap in experience impacts day-to-day work and the ripples it can have on customer experience.
Something as simple as implementing a QA step to test email formats or website changes illustrates this concept. What appears to be small and minor errors can leave a lasting impression on prospects and customers regarding your attention to detail. Once a person understands the merits of a QA step in terms of rework, recalls, and customer issues, they begin to implement the step naturally into all their work processes.
What can an organization do to offset the loss of experienced talent that represents critical intellectual capital? Leverage frameworks to support knowledge management. A business framework captures a process and provides the fundamental guide to operate that process.[4] You are probably familiar with business frameworks such as Michael Porter’s Five Forces and Igor Ansoff’s Opportunity Matrix. Good frameworks are enduring.
Here are three established frameworks to ensure business operations remain customer-centric.
Michael Porter’s Five Forces
Taking an older example, the forty-year-old Porter’s Five Forces has been a staple and, more recently, more of a foundational concept for competitive strategy. The dynamics of company growth have evolved into a customer and community focus. Porter’s framework has been more impactful for those directly involved in later-stage opportunities, retention, and product strategy. Also, the framework becomes more relevant the greater the size and complexity of the opportunity and more regulated the industry. Sometimes it is not about the age of a framework so much as its applied relevance.
VisionEdge Marketing’s Circle of Traction
Created in 1999 by Laura Patterson, the framework represented by a wheel and axle places the focus on successful growth on companies being customer-centric. It identifies the evolution and momentum for growing a business. The axle contains the core ingredients for the structure of the business. The wheel contains the revolving and interdependent elements of engagement and growth. A benefit of this framework is that executives have the opportunity to distribute and concurrently plan business strategies similar to the hemispheres of the brain. Once the initial framework has been planned out, there is a built-in structure to revisit priorities and adapt to changing circumstances.
Business Model Canvas
On the newer and more agile side, Alex Osterwalder’s framework proposed in 2005 has a more product/market fit focus that has been adopted readily by startups and high-growth teams. Key areas focus on early-stage development to validation. While other frameworks are necessary, sometimes the hardest thing to do is to start and do so with the right matters in mind.[5] The BMC framework has been used to teach emerging entrepreneurs and small business owners to ensure they focus on the things that matter most. As the business grows and expands, other frameworks tend to be better suited for the ever-evolving changes. Regardless, companies will return to this framework, especially those using agile,[6] for new lines of revenue and spin-off opportunities.
These are three battle-tested frameworks. Others support knowledge management efforts. “Knowledge is the only unlimited resource, the one asset that grows with use.”[7] Frameworks are extremely valuable for bridging the knowledge gap between young, smart talent and lack of senior talent with deep experience. If you don’t have a library of frameworks, now is a good time to start developing one and putting frameworks into practice so they become a natural part of the way work gets done.
How to Select and Implement a Framework
Here are three key questions to consider when it comes to selecting business frameworks:
Q1. What makes a good framework?
Keep in mind that a business framework serves as a roadmap for operating your organization. Keep these six attributes in mind when evaluating a framework. A good framework:
- Provides structure and scope.
- Should be based on the value stream.
- Is adaptable to fit your organization’s culture and situation. Often the output from frameworks reflects the culture.
- Contains useful tools to support your processes.
- Includes predefined definitions and guidelines to create a common language even in the rapid pace of changes or business agility.
- Simplifies things for you and your teams.
Q2. How to select a framework for your business?
When selecting any framework for your organization, there are a few key considerations. Here are six to take into account:
- Will the framework have leadership support?
- How much time will it take for your team to learn the framework? Where does the framework fit into your organization’s maturity and priorities?
- Does the framework help your younger talent come up the learning curve? For example, are there worksheets and guides?
- As your people learn the fundamentals of the framework, will they be able to put it into practice?
- Is their documentation to support the framework?
- How will you know the framework is being adopted and whether it is serving its purpose?
Select a framework that is aligned with how your organization plans to grow and become more customer-centric.
Regardless of your experience with frameworks, leaders will want to bring in objective perspectives and support. For some that support can be with consultants, however, partners, key customers, rising talent, and other confidential relationships should be included.
Q3. How to implement a framework to support business continuity?
Selection is one thing, implementation is another. Frameworks are a strategic effort. As with a new process, once it is defined and selected, the focus needs to turn to implementation and adoption. Be sure to include these four steps.
- Deployment Plan and Documentation. Appoint the right people to identify, select, and, if necessary, create a framework. It may be necessary to leverage external experts during this stage. Document the purpose of the framework, how and when it will be used, and by whom. Create and document implementation, rollout, communication, training/onboarding, and change management into your plan from the onset.
- Vet Your Framework. Before rolling out your framework, consider employing an alpha, beta pilot approach. This allows you to vet your framework and make adjustments to ensure it works for your organization and will be adopted.
- Train Your Team. Everyone needs to know why the framework was chosen, its purpose, and be trained on how to use it. Make time to onboard employees to support adoption and leverage change management best practices.
- Adapt, Maintain, and Improve. Change is constant. Frameworks are not one and done. It may be necessary to adapt the framework over time. Put a process in place to regularly review your frameworks. Update when necessary and identify opportunities for improvement.
Each of us has shepherded and supported leadership teams in numerous companies through some of the recent challenges at an organizational level. It was interesting to witness the variety of attitudes and preparedness from these late-stage startups to public companies in the face of adverse climates. The lesson from this thread is that growth mode is the best time to ensure you have the frameworks in place to support business continuity.
When it Comes to Frameworks, Invest in Three Areas
In closing, as you entertain the idea of investing in frameworks, we recommend you consider three areas: Vision, Execution, Relationships. Each of these I consider from a leadership perspective.
- Vision: Most leaders focus on the north star of the company or the initiative in front of them. This can impact investment, hiring and promotions, and company acquisitions. In business continuity implementation, determine how much of the vision is immutable no matter the situation. For instance, if the purpose is a priority, you’ll ensure that every talent you hire, leader, or leadership decision will keep the integrity of the purpose intact at all costs.
- Execution: While agile has extended beyond the technical arenas into revenue and growth areas of the business, its application is still becoming more important in digital transformations which have accelerated in recent years. Agile is not a substitute for business continuity planning. Continuity planning at the strategic level upon execution boils down to smarter and faster decisions using more relevant insights. Decision support is a separate framework and implementation is rapidly returning as a critical differentiator between businesses.
- Relationships: Companies operate in ecosystems and communities. While customer experiences are a critical component in building a brand, ignoring the ecosystem of partners, community leaders, and internal talent creates a lopsided go-to-market growth strategy. Each of these relationship arenas contributes to a resilient organization.
Next Steps
As you consider whether learning and implementing existing frameworks to support knowledge management is worthy of investment, we can turn to the words of Tom Davenport and Laurence Prusak, in their 1998 HBR article:
“whenever possible, firms should try to use existing management approaches and tactics as levers to assist in getting going with knowledge management.”
They acknowledge that “knowledge management can be expensive and therefore must somehow be linked to economic benefit or industry success.” They were able to link knowledge management to economic value. For example, Ernst & Young calculates six percent of its revenues, and McKinsey & Company, 10 percent.”[8]
We’ve seen numerous incidents over the last few decades from supply and logistics, financial markets, geopolitical, trade, and pandemic disruptions. While most of the startup ecosystem has focused on growth, lasting organizations have begun to invest in continuity (or resiliency) planning.
One practiced implementation of continuity planning is scenario analysis and planning and playing out contingency plans, especially in regards to potential market shifts, changing customer requirements, and competitor moves.[9]
Good frameworks are enduring and help you offset the loss of intellectual capital and its impact on customer experience. Utilizing them correctly is fundamental to facilitating operational excellence and performance management.
About the Coauthor
Anand Thaker is a twenty-year veteran in marketing technology and growth strategy. As a builder, advisor and investor with cross-industry experience, he has navigated marketing operations, complex sales, customer data and engagement, analytics, AI, and decision intelligence. After his latest successful exit, Anand currently serves as a special advisor to select mid-to-late-stage startups, enterprise executives, and growth investors.
Notes
[1] Stewart, Thomas A.”Your Company’s Most Valuable Asset.”Fortune. 3 Oct. 1994, https://archive.fortune.com/magazines/fortune/fortune_archive/1994/10/03/79803/index.htm. Accessed 27 May 2021.
[2] Drucker, Peter F. “The Coming of the New Organization.” Harvard Business Review. Jan. 1988, https://hbr.org/1988/01/the-coming-of-the-new-organization. Accessed 27 May 2021.
[3] Bruijl, Gerard. “The Relevance of Porter’s Five Forces in Today’s Innovative and ….”SSRN. 21 Jun. 2018, https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3192207. Accessed 27 May 2021.
[4] Muehlhausen, Jim.”The difference between the business model .…” CustomerThink. 9 Oct. 2012. https://customerthink.com/the_difference_between_the_business_model_framework_and_architecture/. Accessed 27 May 2021.
[5] Grundy, Tony. “Rethinking and reinventing Michael Porter’s five forces model.” Strategic Change 15.5 (2006): 213-229.
[6] Blank, Steve. “Why the Lean Start-Up Changes Everything.” Harvard Business Review. May 2013. https://hbr.org/2013/05/why-the-lean-start-up-changes-everything. Accessed 27 May 2021.
[7] Romer, Paul, and Ronald J. Baker. The Firm of the Future: A Guide for Accountants, Lawyers, and Other Professional Services. John Wiley & Sons.
[8] Davenport, Thomas H., and Laurence Pruasak. Working Knowledge: How Organizations Manage What They Know. Harvard Business School Press, 1998.
[9] Allaoui, Sedki “Business transformation frameworks: Comparison and industrial ….” T and F Online. https://www.tandfonline.com/doi/full/10.1080/19488289.2019.1571538. Accessed 22 May 2021.
