Universal Market Models Can Lead to Massive Disruption
So why are we always building new models?
Over the years I’ve been introduced to numerous models that suggest that the world - or at least a specific domain - should be viewed the way the model demands. I have hundreds of capability models in my collection, many of which purport to be describing the same domain, but do so differently.
Very seldom do I see a framework for building the models, because something that is only used once doesn’t seem (to some) to be that valuable. What I mean by that is the model building is generally driven by the experience of the builder, or those driving the initiative. They have persuaded the immediate stakeholders that their experience is driving the process. So, why are they building it again, if this domain has been modeled before (by them)?
Cognitive Dissonance
The chances are great that the model builder has been given their first opportunity to build a model. We all live in our own delusional reality, and models are one way we articulate our delusions. There are many examples of complicated models that allow a lot of room for biases to masquerade as reason¹.
In a consulting situation, these models tend to get complicated because the more complicated the more valuable, right? In actuality, the bespoke nature of the model means there hasn’t been sufficient time to flush out the biases and assumptions. This is what the scientific process is designed to do.
Until that happens, however, anyone who disagrees with the model will experience significant financial and psychological pressure to agree with the consensus. In consulting projects, there is rarely time for this to take place, and many model builders do not treat projects as experiments to improve the model over time.
The end result is that a) no model building method, plus b) variable delusions of reality results in multiple models of the same thing. Same reality, different delusion.
¹ Adams, Scott. Win Bigly: Persuasion in a World Where Facts Don't Matter (p. 65). Penguin Publishing Group. Kindle Edition.
The Influence of the Customer
It isn’t fair to just poke fun at cognitive dissonance, because we all have it - and all to a large degree (we just don’t perceive it that way). Our customers also influence these models because our sponsors often have agendas (their own delusion). Sometimes they’re visible, and often not so visible. Even in situations where there is a rigorous model-building method, we will see a completely different model get constructed.
It doesn’t matter if it’s an Order-to-Cash Capability Maturity Model or a model of the market of Professional Painters Painting an Interior Room. There seems to be a perception, especially among model-builders, that you have to take a new look at the same problem.
This is often rationalized away with arguments such as “we are continually improving the method” or “this context is slightly different.” Either way, two separate initiatives, looking at the same problem, are going to result in completely different outcomes. Does that benefit customers? Maybe it benefits your sponsor, and your pocket book in the short term. But what about the long term?
It’s like the theater of marketing, the execution models are always changing, parts are discarded, other parts are added seemingly whenever it supports the delusion of the person that is developing it. They can also be influenced by new technologies created from reality as a particular vendor sees it. Past experience brings bias, and it’s extremely difficult to unlearn. It’s a delusion. We all have it, few of us will admit it.
Stable Concepts Should Have Universal Models
“But Mike, there is no money to be made unless you are different!” I agree, and there is a lot to be learned about innovations that have emerged in the past. And there are ways that ensure that we are not simply adding machinations into the mix to look clever/busy, but actually building higher order solutions using a stable foundation to build upon.
As an example, I’m building a set of universal models to explain how customers in the Martech space perceive value. I didn’t say pain. Pain is associated with a current solution, and there are typically many solutions doing similar things. I’m talking about a more comprehensive view of customer needs which can be used to scan the market and solutions over time.
In the world of innovation, we have Outcome-Driven Innovation which builds models that describe markets and performance metrics. Pain is in there, once the model is prioritized. Pain changes, but these models are supposed to be stable over time. Yet, you will see different models of identical markets get developed over time. Sometimes it’s customer influence, and other times it’s rationalized as methodology evolution.
It’s far worse in the larger world of management consulting. While there is a stated desire to create a set of benchmark capability models, they are rarely used. When used, they never survive any given project intact! So much for bench-marking!
Be Different by Being the Same
Not everyone can afford to hire consultants, and consulting projects look desirable because of the large margins. From the client perspective, while some companies have budgets for this type of work, the end result is almost always shelf-ware. Most consulting work never gets implemented. It’s often used to validate a sponsor’s stated position.
There are far less expensive ways to get validated. Many companies subscribe to analyst reports and/or data. It takes far less time, hits a different G/L account and is probably less expensive (assuming you are constantly hiring consultants). If you’re seeking answers, and don’t need molecular-level precision, this might be a good way to go.
For consultants, you should be aware of a concept called "lead users.” Quite often, this group is highly over-served. If there were a lower cost, less complicated way to get an answer to the problem they have, they would take it. And it would be a higher volume business.
For a case study on this, I recommend reading this short blog post Beware of Lead Users by Tony Ulwick
Is the consulting market declining? I don’t know. I’ve read that it is. I’ve seen the pressure to reduce rates regardless of the value being contributed. Even if it’s not, innovators that disrupt markets don’t wait for someone else to do it first.
I’m building stable market models for Martech not because they are absolutely perfect. No one is. I’m doing it so one of two things can happen (or both):
Vendors have a common understanding of the market and customer needs in a way that defines revenue/profit growth paths. That should lead to heavy consolidation and a move away from the exploding Martech Stack. Possibly even some new standards
Enterprise customers have a common understanding of themselves as a market and the way they measure success. This leads them to better technology choices, an ability to negotiate more appropriate pricing, and also helps to consolidate the exploding Martech Stack
If you represent a vendor, or an Enterprise making significant technology investments, I’d be happy to help you on this journey into the future of digital technology.