Actions and reactions: two very different drivers of market agility

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Actions and reactions are a strange two-speed dance in the context of market agility. By Mark Di Somma

Actions and reactions are a strange two-speed dance in the context of market agility.

Reactions are the responses that competing companies must actually make together and in a co-ordinated manner to shifts in market dynamics and/or customer expectations. Doing so sets a new norm over which the participants themselves can then compete.

The airline industry generally, with the exception of the upper-market carriers, has reacted to economic pressures by dropping ticket prices and introducing fees for services. Shifting the emphasis from prestige to transport, and charging people for everything and the seat has reaped them billions. They did that together.

As this article on the resurgence of Hollywood ticket sales shows, movie-makers have responded to the surge in available content and home entertainment gadgets by delivering experiences that still make it worth their while for people to go out and see a movie at the theatre – action-packed franchises, amazing sound, 3D; features that continue to make cinemas the biggest and best way to see a movie. Again, they did that together.

Both sectors have looked to change the overall rules, meaning there’s now a new collective sector playbook that in itself generates new standards, new expectations, new reactions and perhaps new competitors.

Contrast that need for largely consentual change by an industry with the dynamics required to then take competitive actions within the new rules. Here the emphasis in sectors ranging from FMCG to technology is increasingly on first-to-market speed, initiative and rapid product prototyping leading to validation. As Frank Days points out in this interview, there’s an increasing push towards agile approaches. In fact, Day went so far recently as to suggest that “the marketing plan is dead”, saying he preferred thoughtful reflection and prioritisation to a more documented approach. His advice? “Think like a scientist. Generate new hypotheses and find rapid, low cost ways to test new ideas. This is where the breakthroughs come from.”

I’m fascinated by how these apparently contradictory ideas need to work together.

Without constant vigiliance and reaction, sectors are in danger of being overtaken, converged or devolved. Camera manufacturers, for example, face ongoing pressure from phone makers. If the industry as a whole does not react to that threat, the whole industry is in danger. So there is a need for collective attention to relevance.

Yet, ironically, while the new playbook is a necessity, it is also a false god because simply staying and moving within an evolved sector pack is not innovation. It is catch-up. It is meeting the new market normal. Failing to add value on top of that new normal quickly renders a brand replaceable. A camera manufacturer, for example, must distinctualise its offerings and brands within the photography sector itself, or face losing market share to higher-profile players or to outsiders offering camera capabilities.

In markets full of change, all change is not equal. Some changes that may appear radical advance everyone in the sector but change nothing competitively because, relatively speaking, the advantages don’t shift. Instead, the industry itself moves forward. Other changes, not even large changes, can see brands make significant gains against their competitors.

Increasingly, I categorise the differences between actions and reactions this way. Reactions are what everyone must do technically to adjust. Actions are what each brand must do to prove its worth over others.

Actions may speak louder than words, but actions and reactions are also judged by words. If you are introducing a change for your brand that amounts to a reaction, the change itself is not the hero – but it may be an opportunity to present change in a way that is different from how others have introduced it. And if the change you are introducing is an action, the action itself is as important for what it says about you as it is as a shift in what people expect.

One thing reactions and actions have in common. They both serve to evolve the market dynamics in which you compete. They add to how you are perceived. They add to the story you must tell and the conversations you must have.

Powerful brands always look for the humanity rather than the technicality in every change they announce, regardless of whether it is an action or a reaction.

They ask these three great questions:
1. What does this [action or reaction] tell our customers that they have been longing to hear?
2. What does it say about us that our competitors can’t say?
3. What does it say about us that we haven’t said before?

More of my thinking on this here:

How to make sure your company’s next strategy succeeds

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Photo of couple tango-ing in the street by Ed Yourdon, sourced from Flickr

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