making markets through disruptive management

Market MakersThe disruptive management

of making customers

by making markets

© 2014 Malcolm Ryder / archestra research

The Common Problem

What do customers, innovation, and competition have in common?

• They are all Solutions to the same problem: differentiation.

• Difference is, of course, the basis of distinction.

• The importance of a distinction is its value.

Value is what is offered in order to be preferred.

• Preference causes selection

• Selection predetermines acquisition

• Acquisition = buying

What is a Market?

A market is an environment for monetizing preferences.

In today’s world, in order to compete, management must not “go to market” and find customers.

Instead, management must make markets, because markets make customers.

Differentiation makes markets. Companies create differentiation.

What is Management?

Management is:

• the application of

• a method to cause

• an intentional progression of an operation

• consistent with required outcomes.

What is Management For?

Management is responsible for driving and constraining outcomes from operations.

Outcomes are the effects of the impacts of outputs.

In our case, management outcomes need to generate a market.

Operational progress is management’s own explicit productivity requirement.

The primary means of “production” by management is influence on operational outputs.

The Inside versus Outside of Management InfluenceManagement productivity is based on methodical influence. The model of the method is cyclical. (Cycle times may be fast or slow.)

INSIDE influences: Management likes to rely on foresight leading to objectives that are realized through planning and governed by guidance (allowing validation of foresight).

OUTSIDE influences: Meanwhile, in the world beyond “inside” management, what happens is that expectations are tested, leading to confidence that takes on a presence as empirical logic predisposing the visibility of future states (and thus, future expectations).

INSIDE OUTSIDE

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Management Disruption

The cycles of influence do not always have a successful result. This could be due to deficiencies in savvy, competency, or co-operation.

But the new problem of management is that the external influences are increasingly broader, stronger, and more ephemeral than the internal management influences.

The external aspects may originate externally and/or occur as the after-effects of internal management, but they exist concurrently with the internal ones.

The result of this concurrence is that, from the outside:

Expectations compete with foresight to influence Objectives

Confidence competes with objectives to influence Planning

Logic competes with planning to influence Guidance

Visibility competes with guidance to influence foresight

PLANNING vs. Logic

OBJECTIVEvs. Confidence

FORESIGHTvs. Expectation

GUIDANCE vs. Visibility

External forces of Expectation, Confidence, Logic, and Visibility, which develop and occur beyond management control, increasingly impinge on management decisions, potentially redirecting or disrupting the cycle of influence...

Naturally occurring external forces intervene and compete for influence with conventional internal drivers of management

INTERNAL INFLUENCEvs. External Influence

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Intermittent Outcomes of Management’s internal influenceAlong the cycle of influence, conventional management decides four operational dispositions of how to further proceed. These dispositions are management outcomes.

Timing, Communications, Sourcing and Intelligence link operational decisions made in the cycle of influence.

But each of those dispositions may be altered, proactively or reactively, by a competing external influence, making each highly variable. Varying separately creates uncertainty, and varying in combination creates complexity.

Conventional influence

Disposition generated

What the disposition typically affects further along the cycle

Foresight Timing Scheduling the activation of initiatives and production

Objective Communications Messaging the authorized purposes and views of objectives

Planning Sourcing Ordering the selection of supporting functions and supplies

Guidance Intelligence Evaluating the formulation and recognition of execution effects


Orthodoxy is subverted by external realities

In the environment of markets, current external influences increasingly make conventional interim dispositions in management unreliable and asynchronous. For example:

• Expectation – Prediction is burdened with not knowing what we don’t know, and then getting inconveniently surprised by it.

• Confidence – Committing to predictions is more debatable when authority does not flow strongly from them or when there is competing authority.

• Logic – Disparities between perceived needs invite competing ideas about why things should be done and how things work.

• Visibility – Data volumes increase far faster than mindsets evolve, but mindsets control data processing and ubiquitous data amplifies differences of mindsets.

Those effects make their combinations unpredictable and generate uncertain outcomes.

PLANNING vs. Logic




Scheduling

Messaging

Ordering

Evaluating

Competing external influences can alter what gets passed forward internally in the cycle of management influence…

INTERNAL INFLUENCESvs. External Inluences

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PLANNING vs. Logic




Widespread innovation means not being sure when a particular proposed offering

will have target worth or for how long

Workforce psychology must cover

dramatically diverse populations

Expertise is crowded by information

overload

TIMING

COMMUNICATIONS

SOURCING

INTELLIGENCE

Supply chains are altered by automation

Numerous other changes, diversity, and uncertainty in producing “for” value are now normal


Transformative Forces Remake Markets

Various recent developments are critical “disruptors” assuring that market management conventions will quickly morph into a different set of tactics. For example:

• Location-based services forego prediction in favor of detection. On detection, location-relevant capabilities and interests are promoted with offerings of enablement or support. The just-in-time offering requires highly dynamic delivery mechanisms.

• Social Networks are a default medium and information channel that can create or modify audiences, attention, awareness, and preferences. Presence in the network is mandatory for being adequately influential.

• Cloud services make I.T. cheaper to use by disparate parties; the ease of replicating and diversifying supportive capability spreads dramatically, making scope and variety (and thus change) available on demand from wide-ranging sources.

• Big Data uncovers evidence of critical dependencies and other relationships that may previously have gone undetected or unconfirmed. Opportunities shaped around insightful common interests are compelling attractors.

In effect, businesses must continually re-engineer markets from the changes.

Market-making tactics

In effect, businesses must manage new tactics and continually re-engineer markets from the changes they create.

New capabilities (examples)

Management Disposition affected Tactical Requirement for management

Location Based services Timing Dynamic delivery mechanisms

Social Networks Communications Presence in the social networks

Cloud services Sourcing Diversified capabilities

Big Data Intelligence Insightful offers

Transformative Forces Remake Management

A continuous cycle of influence can, in effect, have a “gyroscopic” stability.

But new capabilities subvert older management tactics while creating different kinds of new opportunities.

These numerous critical “disruptors” assure that today’s steady state will quickly morph into a different one.

Aligning the opportunities into a new steady state is the key requirement of management’s response.

Conventional influence

Disposition generated

Example new capabilities = opportunities challenging convention

Difference from convention

Foresight Timing Location Based services – real-time monitoring not predictions

Objective Communications Social Networks – back channel publicity not the company line

Planning Sourcing Cloud services – the I.T. store for anyone not central administration

Guidance Intelligence Big Data – simultaneous alternative views not single fixed perspective

Profiling a “Customer”

The importance of such disruptors is that they reflect what market participants already have and use. Technologies have given participants their own cycle of influence, with a combination of self-service and managed services to procure what they want.

Potential customers embody the kinds of external influences that pressure internal management to transform and to solicit their attention.

Customer-held influencer

Management Issue affected

Market participant profiled as a Customer

Expectations Timing When they will buy is their most important issue

Confidence Communications How they know about things largely decides how they form preference

Logic Sourcing Convenience of availability and delivery decides who they will contract or pay

Visibility Intelligence Feedback is ubiquitously available, not perfect but not privileged despite discrete systems

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Markets make Customers, not vice-versaCustomer-centricity is a business idea that must mean aligning operations to the way that market participants use influence to decide to buy.

Participants do not necessarily know what they want – but they do necessarily discover what they want.

Markets essentially enable the participant to manage their own influences so that they can become a customer.

“Market operations” should be managed to create that enablement.

Predisposition of a market participant as a prospect

When they will buy is their most important issue

How they know about things largely decides how they form preference

Convenience of availability and delivery decides who they will contract or pay

Feedback is ubiquitously available, not perfect but not privileged despite discrete systems

Managing development of a market

Internal management Outcomes influencing market operations

Market-making attributes and tactical objectives


Scheduling the activation of initiatives and processes

Dynamic delivery mechanisms When they will buy is their most important issue

Messaging the authorized purposes and views of objectives

Presence in the social networks How they know about things largely decides how they form preference

Ordering the selection of supporting functions and supplies

Diversified fulfillment capabilities Convenience of availability and delivery decides who they will contract or pay

Evaluating the formulation and recognition of execution effects

Insightful offers Feedback is ubiquitous, not privileged despite discrete systems

GOAL External DRIVERInternal ACTION

A “customer” is an effect, not a cause. A “competitor” makes markets, not products.

• Different organizations achieve the currently necessary goals in different forms by different means.

• The provided forms together create the environment of influence for the market participant

• A market is an environment for monetizing preferences

• A managed market environment continually generates and re-generates customers

Market-making attributes and tactical objectives


Dynamic delivery mechanisms

When they will buy is their most important issue

Presence in the social networks

How they know about things largely decides how they form preference

Diversified fulfillment capabilities

Convenience of availability and delivery decides who they will contract or pay

Insightful offers Feedback is ubiquitous, not privileged despite discrete systems

GOAL External DRIVER



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making markets through disruptive management

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