Tension-1: Control v Adaptation

Power-Centred Problems

Company chiefs like control, and therein lies a big danger. Full control in markets is simply impossible except temporarily as an aberration or legalized by an authoritarian government.

Dominating in a fluid social situation, typical of markets, is generally unwise because the greater the force exerted, the greater the resistance and counter-pressure. Eventually the rest of the world wins. Classic modern example:Closed Microsoft.

Where power-centredness is at play in top management, strong companies are in particular danger because arrogance and complacency rapidly develop.

The oscillation can be plotted on the Spiral as shown. It is evident that the polarity forms two interlocking diamonds. Each diamond includes approaches from both diagonals. It is noticeable that the start at Stage-1 is controllable, but the end at Stage-1 (further down the ellipse) is a matter of adaptation.

Company Control or Adaptation

These have the potential to be under company control.

  • L1: Operations and finances require systems, procedures, controls and strict monitoring—but too often there is an absence of performance controls and loose monitoring.
  • L3: Promotion and advertising require effective targeting and measurement of effect—which is not always demanded.
  • L5:Customer attention and bonding based on providing «service that money cannot buy» requires determination and careful control—often this seems too difficult.
  • L7: Market awareness, a responsibility of HQ, permits a prediction of the future that suits the company—but an arrogant, complacent HQ will take its markets for granted.

These reveal that adaptation by the company is unavoidable.

  • L2: Competition in the market for customers depends on competitors, their products and the quality of their marketing.
  • L4: Customer views of desirable product features and an acceptable price to be paid—in the Internet era this often seems to be zero—can be inflexible.
  • L6: Market changes and evolution of technology are inexorable and demand new thinking—which often seems too hard.
  • This diamond is completed by the extreme version of L1-Market-centredness, which requires re-inventing the business i.e. being maximally adaptive to new market realities.

ClosedCompanies besotted with their own power …

may find adaptation intolerable and be tempted to:

  • attack competitors unfairly (L2) e.g. byClosed rumours, spoiling campaigns, extreme loss leaders, lobbying government to distort the market
  • exploit or neglect customers (L4)e.g. byClosed forming cartels or price-fixing,
  • suppress or malign investigations showing harm from products, or denigrate new technology surpassing their product (L6) e.g. byClosed paying (bribing) investigators to publish desired results; by purchasing technologies and then refusing to develop them.

ClosedTHEE Conjecture

  • See Tension-2: Should you focus more on the product, or on the market, or on both simultaneously?

Originally posted: July 2009