How Frameworks and Models Simplify Complexity

A framework or model provides us with the confidence that we are developing concepts or ordering our ideas, in a way that is structured and logical.

They are descriptive tools that help place some order on how variables are potentially interrelated, which helps to formulate questions and answers that inform and enable you to reach a decision.

Like a good recipe, they’re a guideline for the order and type of input you need to achieve the desired result. They are not rigid, and there’s always room for a little flair and creativity along the way. The quality of information used to feed into these also matters, and if you’re working in a team, the calibre and diversity of that team will weigh heavily too.

In short, they help consolidate and simplify ideas.

What Are Frameworks or Models?

It’s hard to lock down one clear definition of these and how they intersect. There’s a lot of confusion as to what makes a framework, a model, a tool, a concept or a theory. In academia, it's a little clearer, though:

Frameworks are the specific lenses through which we look at a problem, the approach we take.

Models are used to explain theories. They are typically developed within a framework.

Outside of academia, we tend to use these terms interchangeably, but for the sake of simplicity perhaps borrowing from academia is the way to go.

If we think of business, specifically marketing strategy – let’s say you’re considering which markets to expand into – assume you’re a Christchurch based business and you’ve got an opportunity to move into Nelson and/or Wellington. The objective would then be to decide if you do move into this market, what success would look like, and what would be needed to achieve that.

Depending on the size and risk involved, you might consider the Three C’s framework, or if more complex, use a variety of frameworks and models to help make those decisions.

As you discuss and consider each of the opportunities and challenges, different frameworks or models can be used to shine the light on the areas for consideration, and help inform the decision needed for that step or element.

In a situation like the one above, you can use broader well-known business models to help get the insight needed, and apply it to the environments you’re evaluating. An example would be Porter's Five Forces, which is a simple framework for assessing and evaluating the competitive strength and position of a business organisation. Using this, as applied to the markets you’re moving into makes sense, as it’s easy to assume ‘there’ is the same as ‘here’ – and it may be, but worth testing those assumptions!

How Businesses Use Frameworks and Models

In almost all fields of knowledge, we have grasped onto models and frameworks to help us structure and manage information, to get clarity on a situation, and to help us reach decisions.

The benefits of these can be summed up well by Ruben Aarntzen, in his M.Sc. Thesis 2016 “a framework reduces complexity and improves communication”.

His research also shows that while some see frameworks as checklists, guidelines or helpful tools, others see completing a framework as a crucial step and describe it as “essential in the process of creating a business model”.

In teams or groups, frameworks help anchor the expectations of everyone in the room as to what you're trying to achieve and gives you a discrete lens to discuss things within. When using tried and tested models, these also give confidence that you're factoring in some of the key elements and areas that need to be focused on, to achieve what you need.

Either way, there’s value there and this research shows that during all phases of this process, frameworks reduce complexity, improve communication, foster knowledge, ensure good visualising and stimulate understanding of the business.

Side note: not to be confused with business models -

Rappa 2002 - Business models ‘spell out how the company makes money’
Magretta 2002 - sees the business model as a logical story; who are your customers, what is their value and how you will you make money in exchange for the given value
Don’t have one? Start here! Lean Canvas is a one page business plan template adapted from Alex Osterwalder's Business Model Canvas - it replaces elaborate business plans with a single page business model.

We’re All Human

Outside the business context, as humans, we enjoy working with models and frameworks too. We know that the brain is wired to think ahead and picture the future. It’s looking ahead and mapping out how things will be, not just for the next few moments, but usually for the longer term. It gets challenging and complex quickly if there are two or more possible outcomes.

Psychological research talks about the body’s response to uncertainty. Simply put, we’re not wired for it.

David Rock in his ‘Your Brain at Work' article, says that "A sense of uncertainty about the future generates a strong threat or 'alert' response in your limbic system. Your brain detects something is wrong, and your ability to focus on other issues diminishes. Your brain doesn't like uncertainty - it's like a type of pain, something to be avoided. Certainty, on the other hand, feels rewarding, and we tend to steer toward it, even when it might be better for us to remain uncertain".

Using a model to sort our ideas, help decide ‘what to do’, give understanding to the context, or see how elements or people are interrelated, is powerful. Sorting things into more ‘certain' piles or boxes allows our brains to relax and let go. The same way it helps to scribble down those 3 am musings so we can go back to sleep, capturing and sorting data and information helps our brains rewind that limbic system alert.

Limitations

Like the mechanical engineer uses a wide range of tools from milling machines to a MIG welder, a savvy business professional will draw on many tools to deal with complexity, evaluate options and move their venture forward. Frameworks or models provide an array of tools to chose from, but are only a piece of the puzzle, not the be-all and end-all.

There’s no ‘exactness’ with these either, and it's noteworthy that the old adage ‘garbage in, garbage out' applies here too. If you're rushing through, doing it as a ‘box-ticking exercise' because your Board asked for it, are using poor data, have a homogenous group working on it, or have pre-determined the decision you want and are engineering the models to suit, then your outcomes will likely be inadequate.

In saying that ...

These limitations can easily be managed, so do embrace using frameworks or models. They will help simplify things, order ideas, give confidence to the decisions being made, and give the wider audience clarity as to what’s been decided and why.

* Disclaimer: Anyone who's worked with me will know I'm a fan of frameworks and models. In fact, my ambition is to complete some solid research in the coming years and develop some models that support more people and business to achieve their potential. So there's definitely a pro-framework bias here!

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