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Why the Right Frameworks Can Be the Difference Between Business Success and Struggles

By: SmallBizClub

 

Elements of Business Planning Drive Future Success

Frameworks are the common denominator in successful businesses, no matter the industry. Put simply – well-defined frameworks are a requisite for business survival. These frameworks set the table for short-term efficiency and long-term operational plans, which address changing factors in the marketplace.

To grow and scale, a business needs to have frameworks for every operation (e.g., sales prospecting, product development, financial planning, etc.). Not having such frameworks in place can be detrimental at best and catastrophic at worst.

What Is a Business Framework? 

A business framework is a tool any business can (and should) use to organize different team members around a common vision. Frameworks help unify departments while motivating employees to achieve a predefined goal according to a specific timeline.

It’s not uncommon to confuse a framework with a business plan. Though related, the two concepts serve different purposes. While a business plan includes the goals of a business and the proposed methods for obtaining such goals within a certain period, frameworks go deeper.

Frameworks focus on the actionable strategies a business leader can use to execute their business plan. A business plan is a basic set of directions with a final destination in mind. For example, a framework defines who should be in the car, how fast they should be driving, and what they should do if they get a flat tire.

A successful business framework establishes an environment where every team member feels guided yet empowered to contribute their talents while working together to achieve a common goal.

Why Do Frameworks Matter? 

Are frameworks just busy work or micromanaging in written form? 

In the wrong hands, frameworks can be interpreted by employees as micromanaging. But the data shows businesses that use frameworks with a bigger goal can experience more success in less time than companies that do not.

According to CoSchedule’s 2022 Trend Report on Marketing Strategy, organized companies were 674% more likely to report success. Survey responses also showed companies were 414% more likely to report success when they documented their strategy. And finally, the study revealed businesses that proactively plan their marketing are 331% more likely to report success than their competitors. 

It is worth noting that when the wrong frameworks are used (or you use the right frameworks incorrectly), it can be equally detrimental to not using frameworks at all. But the right frameworks can help companies document, organize, and plan their way to success.

Business frameworks are useful tools that can help a business owner find a jumping-off point for a new project, campaign, or goal. Frameworks help develop competitive strategies, simplify complex business problems, and create structures built for growth.

Some frameworks work better for certain operations and goals than others. Some frameworks need to be expanded, while others need to be scaled down. Some frameworks can be used simultaneously with others for additional insight. Adaptability is one of the main benefits of business frameworks.

Four Business Frameworks to Start Implementing Today

Organizations of all sizes can benefit from frameworks no matter the industry or where they are in their business journey. 

Here are some of the most common frameworks used with success today:

  • The McKinsey 7-S Framework
  • The Zero-Based Budgeting Framework
  • The Nadler-Tushman Congruence Framework
  • The Understand, Design & Build Framework

McKinsey 7-S

The McKinsey 7-S is a framework ideal for finding and fixing internal organizational problems. For example, this could refer to overcoming inventory issues, resolving messy onboarding processes, or tackling overflowing email inboxes that result in poor communication throughout a company. 

Introduced in the 1970s, this framework has a proven track record of success. Business owners use the McKinsey 7-S to identify how various parts of a company work together and then determine how they can improve overall efficiency and performance. 

You explore the following 7s’ when using this framework to make sure your company is on track:

  • Strategy – A sound strategy is long-term and clearly articulated. However, it can be difficult to tell if a strategy is well-aligned with a company when examined alone. That’s why it’s considered a “hard” element of the McKinsey 7-S, as it can be influenceable by a company.
  • Structure – Another “hard” element, structure refers to how you organize a company. This structure includes how you regulate departments and move information from one employment level to the next.
  • Systems – The final “hard” element, systems are routine actions employees use to complete their work.
  • Skills – Company culture influences the first soft element: skills. Skills include what each employee brings to the collective table as an individual.
  • Shared Values – What are the core values of a company? These make up the “soft” element of shared values.
  • Style – Style refers to a leader’s chosen approach to navigating their team.
  • Staff – The final “soft” element refers to a company’s employees in any form.

Together, teams examine these 7s’ to determine how they influence each other and where friction presents itself in a process. Like a delicate recipe, altering the timing, condition, or amount of one impacts the final product.

Zero-Based Budgeting Framework 

Zero-Based Budgeting is a financial framework that involves developing a new budget from scratch every time a budget is required. As the name suggests, budget development “starts at zero” rather than adjusting a previous budget.

Traditional budgeting only accounts for new expenses. You can carry forward old costs for months, quarters, or even years at a time without being reconsidered. This carryover can lead to serious budget bloat within an organization.

When using this framework, organizations can easily cut unnecessary costs. When starting from zero, every potential expense is analyzed. Only justifiable expenses make the cut, so organizations avoid overspending without having to cut necessary spending.

Nadler-Tushman Congruence Framework 

The Nadler-Tushman Congruence framework puts a company’s proclaimed values against its day-to-day activities. It involves evaluating individual jobs, roles, and responsibilities within the organization, from temporary interns to the CEO. 

When using the Congruence framework, you should adjust tasks, positions, and operations to match the ideal company culture. Frameworks often work together or affect more than one internal avenue. When individuals within an organization feel that their role is fair in responsibilities and aligned with empowering company culture, they’re more likely to feel they’re part of a team. 

This emotion creates a cohesive environment that strengthens corporate strategy to a degree that would otherwise be impossible. As systems become more effective and success comes easier, morale can reach new heights. This improved morale can trigger a new framework cycle with even more enhanced results.

Understand, Design, Build Framework 

The Understand, Design, Build framework is a simple problem-solving tool. 

Here are the basic steps:

Step 1: Understand the problem

Knowing a problem and understanding it to its core are two different concepts. Taking the time to unpack a problem is the only way to begin preparing a solution. Not only does this save time in the end, but it opens doors to more creative and effective solutions.

Step 2: Design a solution

Coming up with possible solutions should involve multiple approaches. These could include a group brainstorming session, mind-mapping, or researching solutions to similar problems.  

The Understand, Build, Design framework suggests making a chart laying out the benefits and costs of each potential solution, along with a mitigations section to focus on improving the resolution even further.

Step 3: Build the best solution

Now a fully understood problem has multiple potential and fully vetted solutions, it’s time to choose and build the best option. And the best part about this framework is that with so much prep and thought going into the first two steps; implementation becomes the easiest part of the process.

3 Tips to Remember When Developing a Customized Framework

One of the best parts about business frameworks is customization or being designed from the ground up to fit a company’s unique needs.

Not sure how to design a framework? While a framework will likely go through a few stages before it’s structurally sound, there are three key attributes to consider:

  • Make it scalable. You can design frameworks to hold the weight of a large enterprise. If you’re not in that department, starting with a less involved framework may be all the support you need. Then, add to it as your business grows.
  • Don’t be afraid to personalize. When developing a customized framework, personalize everywhere possible. This personalization applies to size, industry, experience, products, services, location, target audience, and other factors.
  • Get creative without overthinking. One main benefit of customizing a framework is you can make it your own, no matter how unique that may look. But there’s also no need to reinvent the wheel. Instead, slightly adjusting an existing framework may be all you need to do.

Start Building Your Framework for Success 

Operating with the support of strong frameworks is a key component to business success. Whether you’re working on developing long-term business goals, improving your social media presence, or creating a work culture that thrives, frameworks can help you formulate a strategic approach and process. 

Published: February 17, 2023
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