Why systems thinking is key to marketing

The companies that shape our economic and cultural landscape in the present are entirely different animals to the lumbering behemoths of decades past.

The structures have changed because the markets have changed, and the only steady thing has been, as always, change. And when multiple interlocked markets change, there is always a corresponding growth in complexity.

Overwhelming complexity was the last nail in the coffin of the old school of managerial organisation. And, I argue, one of the major problems facing Marketing today.

When Peter Senge wrote The Fifth Discipline in 1990 he described a mode of thinking that was timeless, but most relevant for that hectic era: not anymore could companies afford to be the sum of single-minded but insular roles, they had to become a flexible and conscious super-organism to survive. Senge described self reinforcing cycles that could stealthily run a company, or even an entire sector, into the ground, and most of these cycles were constructed on the small time thinking of people that couldn’t see the bigger picture. These managers were applying local ointments to problems that required major surgery, being totally ineffective or making the problem even worse, like the bloodletting and leeches of well intentioned shamans in the past.

Managers lacked the panoramic view, and the system itself obstructed it, by giving everyone a tiny fiefdom they had to protect — their job, their department — rather than making them allies to the common goals of success. The revolution in systems thinking that Senge proposed would lead to many of the key innovations of 21st century Management: flatter hierarchies, the need for alignment, integrated supply-chains and of course the instruction of more and more people in systems thinking.

But what does systems thinking have to do with Marketing?

Everything. Marketing is the sum of all interactions a company has with its surroundings. And these interactions can reverberate for decades from the moment they are made, garnering good faith or solidifying failure.

That’s why PR is now an intrinsic part of marketing, and why company image capital has become almost as important as real, green, in the bank, actual capital. The fact that now companies can have a voice across a growing spectrum of social networks also accelerates the need for big vision orientation, and alignment. A clear understanding of what the company stands for, of what it represents in the context of the market and where it wants to go, have to be the first thing on everyone’s mind the moment they tailor any communication to represent the company outside, or even inside the organisation.

Nowadays Big Data is hailed as the next frontier in the fine tuning of the interaction between customer and company, but however big it may be: Big Data, in the words of Peter Thiel, is dumb data. Without a highly qualified analyst to interpret it, one seriously versed in systems thinking, the continuous stream of data can be misleading.

The fact that correlation does not imply causation, and the fact that other fallacies of interpretation are intuitive, can lead companies directly down the rabbit hole into a magical realm where data offers every answer, but every answer is still potentially wrong. In the end, data is only as good as your vision to encompass it, and its consequences.

Systems thinking always looks for leverage. The smallest actions can have the biggest impact, but also lead to the biggest failures if they come to form a negative reinforcing cycle. This applies perfectly to marketing: having an optimised presence in the relevant corners of the market beats being everywhere, but focusing nowhere. Data means you can know where your customers are, and using leverage to your advantage means having a total focus and commitment to those 20% of places and channels that give you and your customers 80% of the benefit.

The shift to a consumer dominated market has been going on for decades, and we have arrived in the brave new world where the idealistic concept of ‘perfect’ information that reminds me of the microeconomics textbooks are not that far from reality. The problem is, perfect information is necessarily also immense in its scope and complexity. The role of the marketer is therefore more challenging than ever. Because the only market actor that has to have even more information than the customer is the marketer. A deep understanding of the context in which the customer lives, breathes and acts is essential in an era where there is not much else left than ‘permission marketing’.

A bombardment with ever cleverer sales pitches will only further alienate the customer that has long stopped listening.

Understanding the system and being there with the perfect solution when, and only when, the customer is ready, is the future, and for the best marketers, the present.