Terms
This section contains a list of terms referenced throughout the site.
📄️ Adaptability
An organization's capacity to adjust its strategy, structure, and operations in response to changes in the environment, market conditions, or competitive landscape, aligning with the idea of adaptability as a core capability. Key to overcoming inertia.
📄️ Agility
The ability of an organization to move quickly and easily, responding rapidly to opportunities or threats in line with the principles of business agility. Often contrasted with inertia; managing inertia aims to increase agility.
📄️ Anti-Fragile
Anti-fragile systems gain capability or insight from volatility and stress instead of merely resisting it. They use feedback from shocks to adapt and become stronger over time.
📄️ Barriers to Entry
Obstacles that make it difficult for new competitors to enter a market, such as high capital requirements, regulatory hurdles, established brand loyalty, proprietary technology, or network effects, reflecting classic barriers to entry. Defensive strategies often focus on raising these barriers.
📄️ Black Swan Event
A black swan event is a rare, high-impact occurrence that sits outside normal expectations and is usually rationalised only after it happens. It exposes blind spots in sensing, resilience planning, and variety management.
📄️ Change Management
The structured approach used to transition individuals, teams, and organizations from a current state to a desired future state, often involving processes to manage resistance and facilitate adoption, as formalized in change management practice. Crucial when managing inertia or implementing new strategies.
📄️ Chicken And Egg Problem
A situation where two interdependent groups are required for success, but neither will participate without the other—the classic chicken-and-egg problem. Common in marketplaces and platforms where you need both buyers and sellers, or producers and consumers, to see value. Solving it usually involves seeding one side through incentives, partnerships, or staged rollout to build initial momentum.
📄️ Chokepoint
A critical component or position others depend on, similar to a geographic or economic choke point. Controlling a chokepoint gives you leverage in supply chains or ecosystems.
📄️ Commoditisation
The process by which a component evolves from novel and uncertain to standardised, ubiquitous, and low-cost, mirroring the dynamics of commoditization. Typically involves a shift in user expectations, decreasing margins, and increasing competition.
📄️ Constraint
A limitation or bottleneck within a system, value chain, or market that restricts flow or performance, similar to the focus on constraints in the theory of constraints. Strategies can involve creating, exploiting, or removing constraints to gain advantage.
📄️ Consumption Data
Data gathered from how users interact with and consume a product, service, or platform, often analysed through customer analytics. Used in 'Sensing Engines' (ILC) to identify patterns, emerging needs, and successful innovations within an ecosystem.
📄️ Cost Of Transition
The difficulty or expense required to shift from one technology, provider, or model to another, effectively a form of switching barrier. Often used to create defensive moats.
📄️ Critical Mass
The minimum level of adoption or participation required for a network, platform, or standard to become self-sustaining and generate significant value, matching the sociological notion of critical mass). Reaching critical mass is often key to exploiting network effects.
📄️ Disruption (Disruptive Innovation)
An innovation that creates a new market and value network, eventually displacing established market-leading firms, products, and alliances, as described in the theory of disruptive innovation. Often starts by targeting overlooked segments or offering simpler, cheaper alternatives.
📄️ Double-Loop Learning
Double-loop learning is a discipline of reflecting on and changing the governing assumptions behind actions, not just adjusting the actions themselves. It helps teams question the frame they are using before they optimise within it.
📄️ Economies Of Scale
Cost advantages gained by increasing production volume, usually through fixed cost amortisation or process efficiencies, capturing the logic behind economies of scale.
📄️ Evolution
The process by which components change over time, moving from uncertain, rare, and custom-built (Genesis) towards stable, common, and industrialized (Commodity/Utility), similar to a technology life cycle. Wardley Mapping places components along an evolution axis (X-axis) representing this journey.
📄️ Fear, Uncertainty, and Doubt (FUD)
A marketing or communication tactic used to dissuade customers from choosing a competitor's product by spreading negative (often vague or unsubstantiated) information to create anxiety about the alternative, exemplified by fear, uncertainty, and doubt. A strategy aimed at reinforcing user inertia.
📄️ Feedback Loop
A cycle where the output of a system influences its subsequent input, leading to amplification (positive feedback) or stabilization (negative feedback), the core dynamic of feedback. Network effects create positive feedback loops where growth begets more growth.
📄️ Horizon Scanning
The practice of systematically searching for and analyzing weak signals and potential future developments across various domains (technology, social, economic, political) to anticipate future threats and opportunities, a foresight technique known as horizon scanning.
📄️ Incumbent
An established company or entity that holds a significant position or market share within an industry, similar to an incumbent officeholder. Incumbents often face challenges from new entrants and disruptive innovations due to inertia.
📄️ Terms
This section contains a list of terms referenced throughout the site.
📄️ Industrialisation
The transformation of a product or activity into a scalable, repeatable, and optimised form, akin to broader industrialisation trends. Emphasises efficiency, standardisation, and operational control.
📄️ Inertia
Resistance to change, akin to the behavioural status quo bias. Can stem from users, systems, internal politics, or existing investment. Critical to recognise and overcome or exploit.
📄️ Innovate-Leverage-Commoditize (ILC)
An ecosystem strategy cycle described by Simon Wardley in his explanation of the ILC model. An organization innovates (or allows others to innovate on its platform), leverages the ecosystem built around it, senses successful patterns, and then commoditizes those patterns into its core offering, repeating the cycle.
📄️ Innovator's Dilemma
The Innovator's Dilemma is a concept introduced by Clayton Christensen in his book of the same name, The Innovator's Dilemma. It describes the challenges that established companies face when they are confronted with disruptive innovations. These innovations often start at the lower end of the market, targeting niche segments or underserved customers, and gradually improve over time, eventually displacing established products and companies.
📄️ Jevons Paradox
When increasing efficiency leads to increased overall consumption, a phenomenon known as the Jevons paradox. Common in utilities, compute, and storage.
📄️ Law of Requisite Variety
The Law of Requisite Variety states that a regulator must possess at least as much variety as the system it seeks to control. In practice it means organisations need matching flexibility, sensing, and response options to manage complex environments.
📄️ Liquidity (Marketplace)
In the context of marketplaces (two-factor markets), liquidity refers to the ease and likelihood with which providers can find consumers and consumers can find providers, echoing the broader notion of market liquidity. High liquidity is crucial for marketplace success and network effects.
📄️ Lock-in
A strategic position where users or partners become dependent on your offering, making it costly or painful to leave, similar to vendor lock-in.
📄️ Market Dominance
A position where a company holds significant control over a market, often characterized by high market share, pricing power, and strong barriers to entry—hallmarks of market power. Strategies like 'Tower and Moat' aim to achieve this.
📄️ Metcalfe's Law
Metcalfe's Law proposes that network value scales proportionally to the square of users (N2), reflecting the increasing connections, as described by Metcalfe's law. This law highlights the growth of network value as more users join, emphasizing the importance of user base in determining a network's worth.
📄️ Moat (Strategic)
Defensive barriers built around a company's core business ("Tower") to protect it from competition, mirroring the idea of an economic moat. These can include network effects, high switching costs, economies of scale, brand loyalty, or intellectual property.
📄️ OODA Loop
The OODA loop is John Boyd’s iterative cycle of Observe, Orient, Decide, and Act for making decisions faster than competitors. It emphasises continually refreshing situational awareness and mental models so action stays ahead of change.
📄️ Panarchy
Panarchy describes the nested adaptive cycles—growth, conservation, release, and reorganisation—that operate across ecological and social systems. It explains how resilience, innovation, and collapse interplay across scales.
📄️ Positioning
Deliberately placing your organisation, product, or capability in a part of the market that offers future strategic advantage, echoing classic marketing positioning) practice.
📄️ Price Elasticity
A measure of how demand changes in response to price variation, captured by price elasticity of demand. High elasticity means demand is sensitive to price changes.
📄️ Probe (Strategic)
A small-scale, low-risk action or experiment designed to test competitor reactions, market reception, or potential opportunities without committing significant resources, similar to the "probe-sense-respond" moves in the Cynefin framework. Used in strategies like 'Circling and Probing'.
📄️ Reed's Law
Reed's Law is a principle in network theory that states that the utility of a network increases exponentially (2N) with the number of users, particularly when considering the formation of groups within the network, as proposed in Reed's law.
📄️ Sensing Engine
A mechanism (usually data-driven) used to detect patterns, user behaviour, or emerging trends to inform strategy, much like a business intelligence capability.
📄️ Situational Awareness
A deep understanding of the competitive landscape, including user needs, component dependencies, market evolution, and potential competitor moves, adapting the broader discipline of situation awareness. Wardley Maps are a tool designed to improve situational awareness for strategic decision-making.
📄️ Soft Systems Methodology
Soft Systems Methodology is Peter Checkland’s framework for exploring messy, ill-defined situations through multiple worldviews before designing purposeful change. It builds shared understanding with tools like rich pictures, CATWOE analysis, and conceptual activity models.
📄️ Sunk Cost Fallacy
The cognitive bias where individuals or organizations continue a behavior or endeavor as a result of previously invested resources (time, money, or effort), even when current evidence suggests it's no longer the best course of action—a classic sunk cost effect. A major source of inertia.
📄️ Switching Costs
The effort, expense, or friction users incur when moving from one solution to another, a form of switching barrier. Often exploited to increase lock-in.
📄️ Uncertainty
The lack of predictability about the future state of components, markets, or competitive actions, reflecting the strategic challenge of uncertainty. Strategies in early evolutionary stages often focus on reducing uncertainty through exploration and experimentation.
📄️ User Needs Mapping
User needs mapping is the practice of explicitly listing and layering user needs—expressed wants, expected hygiene requirements, and hypothesised future needs—before mapping the value chain. It keeps Wardley Maps anchored on real demand instead of internal assumptions.
📄️ Utility (Evolution Stage)
The final stage of evolution in Wardley Mapping, characterized by highly standardized, reliable, commodity-like services often provided on a pay-per-use basis (like electricity or basic cloud compute), similar to utility computing. Competition is based on operational efficiency and price.
📄️ Value Chain
A visual representation used in Wardley Mapping showing the components required to meet a user need, drawing on the management concept of the value chain. Components are arranged vertically based on dependency, with user-visible value at the top and foundational elements at the bottom.
📄️ Viable System Model
The Viable System Model is Stafford Beer’s cybernetic model that divides any viable organisation into five interacting systems responsible for operations, coordination, control, intelligence, and policy. It guides leaders in balancing autonomy with cohesion across recursive layers.
📄️ Weak Signal
Subtle, early indicators of potential future changes, trends, or disruptions in the market or technology landscape, similar to the foresight concept of weak signals. Identifying and interpreting weak signals is crucial for anticipatory positional plays.
📄️ Wedge (Strategic)
A tactic or offering used to split a competitor's market or customer base, often by exploiting a specific vulnerability like price sensitivity, unmet needs, or technological gaps—akin to launching with a focused niche market beachhead. Core to 'fragmentation strategies'.