Market Orientation

Successful businesses follow different management philosophies but share the same basic quest for market orientation

Market Orientation

Let's take a minute to talk about the Hero's Journey, a story structure where a new hero takes the call to adventure (typically after some wishy washing), faces setbacks, wins, and returns home.

Hero’s journey - Wikipedia

Popularized by late professor of mythology Joseph Campbell, this story structure forms the basis for blockbuster movie sagas from Black Panther to Captain Marvel to Star Wars. This is no coincidence - Campbell hung out with Star Wars creator George Lucas in California in the 1970's, and Star Wars went on to influence Hollywood profoundly.

But it goes deeper than that. The Hero's Journey forms the basis of independently developed myths across geographies and human civilizations dating back to antiquity. (See "Gilgamesh," "The Odyssey," etc.) This is a completely inductive result. We create stories like this instinctively no matter who we are or where in the world. Something about the Hero's Journey gives us hope and inspiration.

Just as human beings seek hope and inspiration, businesses seek to serve customers and profit. And just as human beings have the Hero's Journey, businesses have a recipe for sustainable business success that has resisted refutation attempts among business academics for 30 years: market orientation.

Here are the two definitions for market orientation based on arguably the two most important scholarly papers in the history of marketing:

  1. "the organization-wide generation of market intelligence, dissemination of the intelligence across departments and organization-wide responsiveness to it" (Kohli and Jaworski, 1990)
  2. "the organization culture that most effectively and efficiently creates the necessary behaviours for the creation of superior value for buyers and, thus, continuous superior performance for the business" (Narver and Slater, 1990)

Kohli and Jaworski's definition is especially useful because of how it breaks market orientation into three process-oriented pieces: understanding the market, disseminating that knowledge across departments, and responding to it effectively as an organization.

Market orientation - Wikipedia

Once you assume that market orientation is the goal, corollaries pop like tulips in springtime.

First, management (tactic) is how businesses get market oriented (goal). Market orientation has been the likely unspoken goal of any management movement, sub-discipline, or fad for the past 100 years whether the authors knew it or not. For example, customer insights, ethnography, and surveys are about understanding the market. Knowledge management is about disseminating knowledge across departments and time. Six Sigma, Lean, core competencies, and ITIL are all about responding to knowledge effectively as an organization. And a host of other disciplines including Project Management Professional (PMP) certification, management by objectives, matrix management, management by walking around, total quality management, business process re-engineering (BPR), delayering, teamwork, empowerment, etc., hit multiple buckets at once. All these management paths lead towards market orientation.

Second, beware popular business books because there is no silver bullet. Because people are imaginative, once we assume our goal is market orientation we can imagine thousands of creative tactics that may (or may not) get us there. This helps to explain the massive quantity of business books at Barnes and Noble and why you should avoid most of them. Just look around - Amazon's leadership principles are not used at Google, Google beanies do not exist at Microsoft, Microsoft employees probably have less fun at work than Zappos employees, etc. - there is no single, universal tactic to reach market orientation. Chances are that any book of post-hoc lessons like Ray Dalio's "Principles" is not the bible of tactics that will level up your business tomorrow because you are not Ray Dalio, and your firm is not Bridgewater.

Much more useful are narrative case study/biography books like "Only the Paranoid Survive" (Intel) and "Sam Walton: Made in America" (Walmart) that skip the platitudes but describe how past business leaders found their groove. This is what successful business leaders do and ultimately the only way forward. The best business leaders are executives and team players, not banal book advice takers. No one knows you or your business better than you, and as such beware of easy answers. Walk your own path because it is the only way.

Third, computers and the Internet raised the bar. Each step in Kohli and Jaworski's market orientation definition involves information, and computers and the Internet are the most powerful information tools in human history. Digital technologies have raised the market orientation bar to a level unattainable with analog technology alone. If this sounds obvious, remember that billions of us around the world lack access to computers, mobile phones, or both.

Smartphone Ownership Is Growing Rapidly Around the World, but Not Always Equally
Whether in advanced or emerging economies, younger people, those with higher levels of education and those with higher incomes are more likely to be digitally connected.

In the movies, T'Challa, Captain Marvel, and Luke Skywalker follow different paths but the same basic Hero's Journey. Each achieves victory within the constraints of their story's setting, characters, plot, conflicts, and themes. Luke discovers the rebels and the Force, Captain Marvel breaks her shackles, and T'Challa finds his inner strength.

In the real world, successful businesses follow different management philosophies but share the same basic quest for market orientation.

Header photo by Jametlene Reskp / Unsplash