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Chapter 2: Finding a Path
Core Problem
Businesses are living, constantly evolving systems. Strategy tools must capture both structure and change over time.
Four Stages of Evolution
Components move across four maturity stages (x-axis):
- Genesis - unique, rare, uncertain, constantly changing (exploration)
- Custom Built - uncommon, artisan, bespoke, frequently changing (learning)
- Product - increasingly common, repeatable, manufactured (refining)
- Commodity/Utility - standardized, high-volume, undifferentiated, invisible (efficiency)
Competition drives this evolution: desire for advantage creates novel solutions; desire to keep up spreads them until commonplace.
The Wardley Map Framework
Core elements:
- Visual representation
- Context-specific to your business at that moment
- Anchor: user and their needs (y-axis = visibility/value)
- Position: components arranged by dependency and visibility
- Movement: components evolving left-to-right toward commoditization
Additional elements: flow (communication/resources between components), types (activities, practices, data, knowledge), climatic patterns.
Three-Step Mapping Process
Step 1 - Define User Needs: Identify scope and genuine user requirements (not wants). Distinguish between user needs and business needs.
Step 2 - Create Value Chain: Use post-it notes with teams. Place visible user-facing items higher, supporting infrastructure lower. All maps are imperfect - don't aim for perfection.
Step 3 - Add Evolution: Position each component by ubiquity, competitor usage, product availability, novelty. This step generates healthy debate.
Key Insight: Standardization Enables Complexity
Once components commoditize, they become building blocks for more sophisticated systems. Maudslay's screw-cutting lathe (1800) enabled standardized, interchangeable parts, which enabled complex machinery and modern mass production.
Key Examples
- Thomas Thwaites' toaster: building from scratch costs £1,000+ for 5 seconds of function, showing how products depend on standardized components
- Nokia: paper mill (1865) -> rubber -> consumer electronics -> telecoms, showing "core" business transforms over time
Key Takeaways
- Maps must show both structure (value chain) and dynamics (evolution)
- Components naturally flow from novel to commonplace driven by competition
- Higher-positioned items have more user visibility; lower items are invisible infrastructure
- Common mistake: treating components by how you build them rather than actual market maturity
- Effective mapping requires cross-functional teams challenging assumptions
- A "good enough" map in 2-4 hours beats a perfect map that's never completed
- Mapping cannot be outsourced - strategic learning requires organizational practice