It comes down to asking the “Why, what, who, and how” of your business, arraying it across one page in a way that makes it extremely useful as an alignment tool amongst management or board members. This is hardly a novel concept, but it falls into that category of common sense that is not so commonly done.
Tjan goes on to outline 4 questions he thinks helps frame up the gestalt of a company. Those questions include:
- What’s the big idea? Why do you exist?
- What is your value proposition?
- Who are you trying to serve?
- How do you know you are winning?
Not sure I agree on the order of the questions, but the intent, I think, is sound: if you can’t clearly and succinctly describe your company to yourself, how will you ever be able to describe it to anyone else.
Put it another way: if you’re asked what you do at a family get-together, how are you going to explain yourself?
One potential pitfall of the above questions is the temptation to answer them too broadly. Often I have heard people say “Well, my product is really a global product, and my positioning is really global positioning, so I’m really serving everyone everywhere.”
It seems that the most successful companies are those that are able to answer the above questions as narrowly as possible. Take 37signals for example: they have a very narrowly defined user base that in turn informs a very narrowly defined product. If a customer asks for a product modification, more often than not their answer is “No, we’re not going to do that. We’d hate to lose you as a customer, but we understand if your needs have outgrown our product.”
Compare that to Microsoft and their almost pathological need to have “Windows Everywhere for Everyone.”
The most important of the four questions above, I think, is #4 … how do you know you are winning? It’s easy to focus on doing things, but as my friend John likes to say “Activity does not equal accomplishment” (not sure from where he borrowed that). You need to know what success looks like, you need to know what and how to change mid-stream, and you need to have enough data to make an informed decision.
How do you think through a business strategy?