Is the Underlying Logic of Your Business Still Valid?

If your business were to close its doors, who will miss it, what will they miss, under what conditions and is there any firm or brand that can readily replace you? This is the question that Cynthia A. Montgomery asks in her book titled, The Strategist: Be the Leader Your Business Needs. Apparently, this is one of the fundamental questions that get asked to participants in the Harvard EOP Program.

This is the same question that management and business experts have asked countless times in the past and continue to devote considerable amount of space to, in their publications, presentations and speeches. Examples include Joan Magretta: “What Management Is;” Brandenburger & Nalebauf: Co-opetition; Ritchie-Dunham & Rabbino: Managing from Clarity; Peter Drucker: On the Profession of Management etc.,

It is also the same topic that gets considerable attention in MBA programs and advanced executive education.The underlying logic comes in many forms. Regardless however, the essence is the same. It is the idea that underlie and drive your business, your venture or brand that finds its expression through the products and services you make, the promises, the activities you undertake, where you undertake them, how you undertake them as well as the asset base you invest in.

It is a simple idea that answers a set of questions such as; “what do we exist for, what difference do we exist to make and to whom and what does success look like?” Embedded in this concept as Peter Drucker points out, is a set of assumptions about what society values, what your company/brand or venture gets paid for and the resources and capabilities that should underlie your central idea.

As things change – technological changes that enable or disable certain things and regulatory environments, demographic structures, tastes, preferences and priorities – it is vital to test the relevance of your central idea. The central idea should always be tested for its ability to inspire and motivate staff, build supplier and channel partners commitment and support, channel partners, equity providers confidence and customers’ interest and satisfaction. More importantly, the central idea should always be tested for its generative capacity – ability to generate free cash-flows for the firm and stockholders.

Whilst there are many things to look at, both in the short, medium and long term that may give signs of health of the central idea, I would suggest a multi-disciplinary approach including the following building blocks:-

  • Philosophy and logic – Test the assumptions behind the idea. Are they still valid? Does the underlying idea still make sense given the changes in the current reality or assumptions of the current reality?
  • Anthropology and Meaning – What meaning, images and associations does the central idea evoke amongst different market and non-market actors.
  • Energy and emotions both positive and negative.
  • Actions and behaviors that the meaning, energy and emotions generate.
  • The economics and duration of the central idea.

In addition to the above, it is always advisable to map the key driving forces that impact on the underlying idea the most or those with the biggest potential to move the central idea, the behavior patterns of the driving forces, the direction they may take and how the different driving forces may interact, collide or combine.

Notes About the Author: Kheepe Moremi

Seasoned strategy & market facing professional with strong business acumen, operating experience and entrepreneurial flair. Former founder board member of the Marketing Association of South Africa, former founder marketing director of Brand South Africa, executive lead of customer strategy at Deloitte Digital, Advisor to the Board Chair of Eskom, head of strategy, innovation and marketing at FNB (a division of First Rand Bank), marketing manager at Nedbank, brand manager at African Bank and Procter & Gamble.

  • https://www.linkedin.com/in/kheepe-moremi-337a03/
  • http://whoswho.co.za/kheepe-moremi-829354
  • https://www.marketingawards.co.za/council/
  • https://www.youtube.com/watch?v=kGd3ZdgA1yY
  • https://www.fin24.com/Finweek/Advertising-and-marketing/Brand-SA-focus-shifts-20050920
  • https://www.iol.co.za/business-report/economy/brand-sa-worth-r380bn-says-marketing-council-754643
  • https://mybroadband.co.za/news/cellular/4092-fnb-launches-cellphone-business-banking.html
  • http://allafrica.com/stories/201308270985.html
  • http://www.the-esa.org/news/articles/-/south-africa-saves-energy-with-49m-campaign
  • https://www.mediaupdate.co.za/marketing/6807/masa-announces-new-board-of-directors

Academic Profile

  • Beta Gamma Sigma Lifetime member,
  • Executive MBA From Brown & IE Business School
  • Strategy & Innovation from Oxford

 

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2 thoughts on “Is the Underlying Logic of Your Business Still Valid?

  1. What a scary question this is for founders like myself? It’s been 9 years since I brought my digital communications business idea to life, and a lot has changed since then; including changes in digital communication platforms we use such as Facebook, savvy by netizens, enhanced understanding of new media by marketers and the market at large, increasing importance of social media influencers who now charge for publishing content with brand mentions, and the upsurge of fake news publishers that effectively influence public sentiment.

    Thanks for the post. Finding an answer to this question is now in my list of new year resolutions.

    1. Bra Willy,

      We appreciate the time and effort you took to engage with out stimulus material. The material is not meant to scare, but provoke some thinking process.