Description/Theoretical Framework of Markets and the Organization

The second part of the theoretical framework is fast making progress, here is the section on the Cluetrain Manifesto. I really would like to make it bigger but the page number is growing at a healthy clip so I need to stay focused ...

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4.3 Markets and the Organization

In this section, the second tier of the theoretical framework will be presented and developed. Unlike the previous section where the research field was naturally narrowed as a function of the topic (web 2.0) this section takes on the deep and dark void of management and organization theory/literature. The point is of course that the span of this science is vast in terms of written sources and theories which make the choice of research angle all the more important. In this paper, the focus revolves around the conceptualization of the market and how organizations should and can act in the marketplace. As a result, the relationship between an organization and its external environment will be examined both in a general sense and from the strict point of view of customer relationship.

4.3.1 The Cluetrain Manifesto – Shaking up the Market?

Of all the recent contributions to the general management literature you would be hard pressed to find one more programmatic than the Cluetrain Manifesto [1] . Written by online marketers and web practitioners far aloof from the pedigree of traditional marketing textbook authors it delivers a crushing blow to the traditional view of business communication, strategy and PR work. The manifesto has furthermore been acknowledged through the myriad of approving signatures by many a CEO, marketing manager, and PR practitioner [2] . On that background it is also wholly unfair not go into a much deeper discussion of the merits and legitimacy of the Cluetrain Manifesto’s arguments than will be the case here. What is the main thrust of the Cluetrain Manifesto then?

The Cluetrain Manifesto begins with the web and how it is changing and will change markets. The main point is that markets are becoming self organized and increasingly more dynamic which in turn demands that business adopts a new approach in serving and acting towards markets. The manifesto puts up 95 theses [3] which sum up the manifesto’s main message and the key concept is that markets are conversation and that markets are actually getting smarter than most companies.

A powerful global conversation has begun. Through the Internet, people are discovering and inventing new ways to share relevant knowledge with blinding speed. As a direct result, markets are getting smarter—and getting smarter faster than most companies.                                                                                               The Cluetrain Manifesto - introduction

Digging deeper into the concept noted above we need to take a look at chapter 4 [4] in the Manifesto written by Doc Searls and David Weinberger with the convenient title; Markets are Conversation. This chapter epitomizes what seems to be the main message of the Manifesto and juxtaposes the market before and after the industrial age or interruption as it is labeled. Before the industrial age and the birth of modern industrialization, management practices, and customer definitions markets were highly localized and essentially conversational and thus human in nature. [5] Then begins the industrial age which quite aptly is described as the long silence and in essence as the industrial interruption of human conversation. [6] This is characterized by a period where the rise of mass communication gave birth to mass marketing and thus the eradication of the conversation between customer/consumer and business. Communication and marketing became a one way street where business broadcasts messages to customers who really don’t want to hear it. The central idea of mass marketing was to silence customers (the axe in the head) and reduce marketing to the most efficient way to get customers to buy the product [7] .

Whether we buy this idea of the industrial and the rigid anatomy of mass marketing and communication is one thing. However, it is very difficult I think not to accept the second tier of Searl’s and Weinberger’s message. In short, markets are getting smarter and crucially that markets are evolving with such a pace and dynamism that companies are having problems following suit. For the authors of Cluetrain Manifesto this new dynamism springs from the web and what is coined as ‘networked markets.’ The web enables conversation between people which has not previously been possible. The main message to companies then becomes that if they do not change their code of conduct and submit to the new rules of the market they will perish. And what is it then that companies need to do?

According to Searl and [CV1] Weinberger companies need to radically re-invent the way they communicate in the market and thus with their (potential) customers. Traditional PR, advertising and company CSR declarations are frowned upon by the authors as being wholly out of tact with the workings of the modern day market place. This also crucially denotes a new way to regard value creation in the market as well as new way to look at customer relationships. Looking first at value creation for the company, it happens primarily as a result of the engagement in conversation with customers and then secondarily through the actual exchange situation where a customer buys a service or product. The crucial point here is that without the former you won’t get the latter. As such conversation in the market place becomes one of the most important prerequisites for value creation itself. If companies today do not acquire the means through which to engage in conversation with its customers they will not only be left out from the exchange with the customer but, according to the authors, the market itself! What underpins this belief is thus also the concrete point that companies today need to utilize tools which enable them to engage in conversation. More specifically this is also a thundering critique towards the naïve deployment of push communication tools and perhaps more importantly a call for business to learn to listen to the market. This brings us then to the idea of customer relationship where companies need to display more sensitivity towards the customer’s signals. It should be clear then that companies need to change the specific way in which they address the market place. Companies today must learn to speak with a human voice and it is not unreasonable to claim that the concrete ability of businesses to do this and thus to convey authenticity through communication will become a major parameter for success in the future, if it is not already. The customer relationship perspective is then also deliberately skewed towards the customer’s point of view epitomized in the need for business to actively engage in conversation which also implies to listen.

4.3.2 Summary – The Cluetrain Manifesto

The Cluetrain Manifesto and its crushing blow to traditional marketing appear to be something of a love or hate story. Either you have the title cover framed and put on your desk as an eternal source of inspiration or you engage in a scene remade from Fahrenheit 451 and burn your volume of the Cluetrain as the only sound way to put this nonsense to rest. I will adopt however, more of middle position.

The most important thing to take away from the Manifesto is the notion of markets as conversation. The Manifesto takes an adamant stance against mass marketing and traditional PR which essentially is something of an extreme position. However, the web has indeed changed the marketplace and business needs to follow suit. It does not then becomes a question of for and against but more so a question about adaptation to the web which is fast becoming the single most important communication channel for companies today. Without the ability and willingness to engage in conversation with potential and existing customer business risk being excluding from core dynamics and aspects of the market place and in reality whether your are for or against the Manifesto this is something which is hard to deny.

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[1] Christopher Locke et al. (2000) - The Cluetrain Manifesto - http://www.cluetrain.com/book/index.html

[2] See list of signatories … http://www.cluetrain.com/signers.html

[3] http://www.cluetrain.com/book/95-theses.html

[4] http://www.cluetrain.com/book/markets.html

[5] The Cluetrain Manifesto chapter 4 – pp. 1-3.

[6] The Cluetrain Manifesto chapter 4 – pp. 5.

[7] The Cluetrain Manifesto chapter 4 – pp. 3-4.

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[CV1] Kilder til dette afsnit?