Distributed decision making and mastering contested markets

An interesting coffee with Mark Earls

 

I extracted from him a really structured version of his “herd” thinking i.e. how people make decisions.  It goes like this...

 

 

Rational. Faulty. Distributed.

 

1. Rational. We used to think (but only the most classical of economist would still believe) that people make rational decisions that, however complex, are ultimately a mental calculation.

 

2. Faulty.  The rational model has been modified by the discovery that we use emotions, faulty logic (due to the way our brains work) and/or are influenced “irrationally” by others.  So we are still like computers but rather faulty ones.

 

 

So far so comfortable. 

 

 

The shocker is in the third one.

 

 

3. Distributed.  There is evidence that our decisions are made by other people (or groups) and we simply copy them, all be it still believing that we made the decision ourselves.

 

 

So just as we may believe that the PC on our desk is doing all the work, it is really all going on in the distributed “cloud” hence his choice of language.  

 

 

I will leave Mark to explain, prove and defend this line.  

 

 

But I rather like it.

 

 

In exchange I offered him my own little intellectual triptych (note to self - the power of triptych’s in structuring out thinking is worth a post in itself) namely that of positional, crisis and contested markets.

 

The notion is that we are all trained to communicate in “positional markets” : the task is to “position brand A relative to brand B” via techniques such as segmentation, messaging, channel planning etc.  Occasionally markets tip into “crisis” mode (Benzene in Perrier type stuff) where the task is to stop the crisis and get things back into positional mode as soon as possible.

 

 

But the third type of market is the “contested market” where other entities are trying to put you into a state of crisis, where your messages are rapidly rebutted, instantly re-butted or even pre-butted and all the channels keep spilling into each other.  This all started in politics in the 90's (I have the names of the guilty, if you want them) and has spread to other markets e.g. tobacco, alcohol, big retail, defence, energy.

 

 

The point is that these markets are no longer “positional” and are in such a permanent state of crisis that the word crisis isn’t helpful any longer. Hence “contested”.

 

 

How you deal with a contested market is another thing and, from a personal point of view is why it’s good fun to be at Bell Pottinger right now.  

 

 

Because although ad agencies have always understood that consumers are “faulty” and do get the increasingly social and distributed nature of decision taking, I am not sure if they have any track record of being that good in a crisis (unlike PR agencies).

 

 

And contested markets are even tougher to master than crisis markets.

 

So, as someone once put it, “we are the masters now!!!” (or, at least can be, in markets that have evolved out of their “positional/crisis” stage into a contested state).

 

 

A final thought, to connect up the two triptychs (a hexych? a diptriptych?), when you get all modern and groovy and dabble with social media in order to tap into the powerful distributed/social decision making force (aka the Herd Effect) you run the risk of tipping your previously positional market into a contested state.  Maybe for ever.  Nestle may have just found that out.  The Conservative are being forcibly reminded of it in case they have not been paying attention.

 

 

(Feel free to instantly re-but this; we be warned that we have our instant rebuttal rebuttal strategy ready to deploy…)

Comments

[new era españa]

Vielen Dank für den Austausch mit uns, ich glaube, das ist die Zeit zum Lesen ist sehr nett, mit Ihnen zu teilen, was gut werden meine Freunde article.i einzuführen.