I can’t play chess.
But I’ve developed a plan which will enable me to win any chess game I play,
and it’s all down to this guy:
Garry Kasparov - arguably the greatest chess player of all time.
What I’ve done is analysed
every one of his moves from every one of his chess matches.
Think about it - if these moves came together to make him the world number one,
it stands to reason that they must be the best chess moves there are.
So by duplicating those moves in any game, I’ll also duplicate his success, right?
What could go wrong? Except, well...
Everything.
Every one of his moves was based
on his situational awareness of the game he was playing:
The location of the pieces on the board, his and his opponents strategies -
these informed the moves he made.
These moves were all context specific,
so blindly copying them and applying them
in an entirely different context is bound to fail.
So why then, do we do exactly that in the business world?
Just like Kasparov, these successful companies
made their decisions based on situational awareness:
a thorough understanding of their industry, and position within it.
So to emulate their success, we don’t need a list of the moves they made -
we need to develop our own capacity for situational awareness.
A top down view of our board.
To do that, we’re going to need a map.
Many strategic frameworks already exist to meet this need.
But while some of these make a good start, they can also be limited.
Enter business strategist Simon Wardley,
who developed “Wardley Mapping” while he was a CEO
allowing him to make
easy and insightful observations about his company
at both a high and low level.
To give you an example of how Wardley Mapping works,
let’s look at how a company is structured.
Take Uber; what does Uber need to operate?
Drivers, who need cars, which need roads and fuel.
It needs an app ,
the app’s going to run on a phone, so that’s important.
The phone needs power, a cell network, internet connectivity,
it needs GPS, which needs satellites -
satellites need rockets, rockets need fuel...
Now sure, talking about rocket fuel in relation to Uber
might seem a bit bizarre,
but this level of detail is the whole point.
Without rocket fuel, we’ve got no rocket, satellite or GPS,
and without those we’re going nowhere.
So rocket fuel goes on the map.
Next we rate all these elements by how visible their value is.
Take rocket fuel - obviously it’s valuable,
but it certainly doesn’t spring to mind when we think about Uber,
so clearly that value isn’t very visible.
The app, however, is the most visible part of the whole system,
so its value is obvious.
And we go on like this, until we’ve laid out
how every essential component of the business is interconnected.
This is definitely useful, but it’s not really giving us
the situational awareness we need to think four moves ahead.
And to gain that insight, we need to think about the evolution of technology,
which Simon Wardley says can be divided into four stages:
Genesis: The birth of the idea
Custom Built: Bespoke for your needs
Product: You can buy it off the shelf
Commodity: It’s now one of life’s essentials
So now we need to place each element of our business onto a timeline.
Let’s start at the bottom.
Electricity is easy - it’s everywhere, so clearly a commodity.
How about satellites?
Essential, but not exactly available on Amazon Prime.
Phones and GPS are both extremely common, so they’ll be in the same neighbourhood.
The Uber app however, is a great example
of something that’s still early in its evolution
so we’ll put that pretty far to the left, between Genesis and Custom built.
As we flesh this out you can see the structure of Uber’s business taking shape,
and very quickly it becomes easy to make some observations:
The items in the top left of your map are where you invest.
These are the most innovative elements of your business,
with the most value to your customer.
The Uber app binds all the components on the map
into a simple user friendly experience:
press a button and get where you need to go.
But take a look at the bottom right of our map -
here, exactly the opposite is true.
Electricity, while essential to running their business,
clearly doesn’t require any additional investment.
And while that might seem obvious in this example,
it’s a mistake that many companies do make
investing in areas which will bring no additional value to their customers,
without even realising it.
So as we populate the map with more components,
we can clearly see divisions between these extremes.
We don’t even need to know what these components represent -
we simply understand that those on the right are best to outsource,
those in the middle are best to buy, and those on the left are best to build.
We are also able to observe that over time
all of the elements on the map will naturally move to the right.
Their speeds will vary, but as each technology evolves,
it becomes more common, better understood, and more easily sourced.
As that happens there’s the potential for new elements
to appear on the left hand side.
Right now, the Uber app is
the most innovative and valuable component on the map,
but if we look at similar point to point transport companies
they’re doing the same thing.
As this capability becomes more common, new ideas will prosper.
Concepts like Uber Eats, Amazon Fresh and Quiqup,
which only a few years ago would have been inconceivable, become a reality.
Because this is how inno vation works - not by controlling the market,
but by building on the innovations that have come before.
The best way to predict the future is to build it.
Kasparov demonstrated that it’s possible
to consistently stay ahead in a complex environment,
and there’s no reason that you can’t do the same,
by knowing the components of your business
and using situational awareness to understand how they’ll evolve.