From market leader to market leadership
Innovative companies are opting for a proactive approach to tackling complex and dynamic markets. If markets change too rapidly to be predictable, they are managing this unpredictability by driving the change themselves.
By Suvi Nenonen and Kaj Storbacka.
“The markets are not what they used to be.” This statement by a CEO of a large New Zealand company illustrates the obvious fact: markets are less predictable, more complex, and increasingly dynamic. A market leader today may be gone tomorrow and a firm that did not exist seven years ago is now disrupting markets globally (think Uber).
So, how to cope with this relentless market change that only seems to be gaining speed? Interestingly, many companies – especially entrepreneur-driven ones – are turning to very unlikely source for managerial guidance: Mahatma Gandhi. “Be the change that you wish to see in the world” has been quoted to us too many times to be just a coincidence.
It seems that many innovative companies are opting for a proactive approach to tackling complex and dynamic markets. If markets change too rapidly to be predictable, let’s manage this unpredictability by driving the change ourselves.
The trick in being successful in driving a market change is a simple realisation: market-level change will never happen unless you can convince others to change their ways as well. What is needed is market leadership that invites others – customers, suppliers, other business partners, even regulators – to a common change journey.
Explore: Don’t look ahead but look around
First, your market change journey requires a destination that is acceptable for everyone involved. Unfortunately, if the reason why you are seeking to change your market is the fact that your market is too unpredictable, then it is very unlikely that you will find the future vision for your market from analysis. There is no point in looking ahead, as the future is too foggy.
However, you can always look around. Are any of your business partners doing something that could be tweaked into something really exciting? What is happening in other countries? Can you draw parallels or analogues from other industries? Seeking inspiration from seemingly unconnected contexts seems to be a winning formula when searching for a market-shaping vision.
Express: don’t read the map, but draw the map
The second leg of the market change journey relates to the fact that we humans don’t really cope that well with uncertainty. Change in itself is painful enough, but being told that change is needed – but not what kind of change or how it will be achieved – will turn even the most loyal allies into deserters.
Hence, you have to become a map-maker: charting the unfamiliar territory and supporting others to better understand how the market can develop, and how they can be part of this development. Just be careful so that you don’t turn into an insensitive preacher: market leadership is not a monologue but a dialogue, collectively making sense of what should be done next.
Engage: not take the lead, but share the lead
Finally, to successfully drive a market change you have to be able to share the lead. You need active participation of people and organisations over which you have no formal authority, and thus you will find better leadership guidance from social movements than from military generals.
In fact, it may be helpful to decouple leadership from the individual altogether; to distinguish between ‘leadership’ and ‘leaders’.
Successful market leadership can be seen as a distributed process of learning, involving a number of individuals from various organisations – sometimes ‘leading’ and sometimes ‘following’.
Yes, the original idea might be yours, but if some other individual or organisation is better equipped to promote the market change, in a particular instance, you should encourage them to do just that – even if they do it differently than you would.
Associate Professor Suvi Nenonen and Professor Kaj Storbacka work at the University of Auckland Business School’s Graduate School of Management. They teach in the MBA programmes and their research focuses on business model innovation and market innovation. They are passionate about building bridges over the academia-practice gap.
Column in New Zealand Management
Magazine Issue: April 2016
Page Number: 26