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The Interaction Age

March 3, 2011

There is something going on in the world, conventional buyer behavior is changing and conventional business models are being tested.

Andrew J Milne first coined the term “The Interaction Age” in a Jan 2007 paper published on the changing nature of university based education.  While I like the term, a number of other authors have used similar aptly descriptive terms for the same meaning:

–       The Relationship Age Steve Bosserman (see 2006 blog article here)

–       The Age of Customer Capitalism from Roger Martin in Feb 2010 (see HBR article here)

–       The age of Customer Delight (Steve Denning’s Blog here)

While I will stick with The Interaction Age, I firmly and passionately believe that relationships focused on the customer’s outcomes are the key priority and the driving force behind the massive shift in buyer behavior and in business models.

Why I like the term The Interaction Age is that if we think about what is happening and why it’s happening its interesting to note how we as a society have evolved (and the timespans in which we have evolved)

The Agricultural Age – For almost 1000 years our race existed on a “ground to mouth” basis.  We “grew stuff”

The Industrial Age – Innovation accelerated – we “made” stuff.  It was a “sellers” market.

The Information Age – In the early to mid 20th century (yes less than 100 years ago) the appetite for information grew exponentially.  As we learned more and more about our planet, the human body and the universe, knowledge became an ever important competitive differentiator. Customers had choice. A key evolution of the information age was the evolution of markets and management focus and business models.

  • Initially it was local production to local market
  • Then local production to regional market
  • Regional production to national markets
  • Regional production to international market etc etc
  • To currently a massively distributed invent, produce and supply model to global market

It became a “buyers” market.

What’s interesting is the value chain has changed.  Lots of outsourcing, lots of optimization, but in turn customers are no longer constrained by choice, they have more than they could ever want or need.  So how do companies stay relevant and desired by customers ?

So what’s different in The Interaction Age ?

Is this not just an extension of The Information Age ?

As mentioned companies (customers) are no longer constrained by technology (plenty to choose from), they are also not constrained by ideas (there are more ideas about ways in which they could invest, grow, diversify and innovate than they could ever execute).

  • So as companies compete globally against massive global companies to the minute local competitors
  • As they continue to use 20th Century transaction optimisation business models via various machinations of vertically integrated to horizontal focus and all the many and varied supplier relationships and partnerships that requires (across the globe)
  • As they fight to attract and retain the most talented people in their industry
  • One thing remains common…HOW do they remain relevant to and valued by their customers

Just like companies, customers now have the advantage of the information age.  They can buy from anyone, anywhere at prices never seen before.  Products commoditise quickly.  With this shift from sellers market (product led) to a buyers market (consumption led) we saw buyers leverage information on products, service and price to influence their buying decision.

But with so much to choose from, how to companies innovate and customers get value?

Through interaction, relationships and customer delight.

The traditional value chain is dead.

Companies complain about declining margins against ever increasing customer expectations

Customers complain about “value for money” (or perceived lack of) and “cheap and cheerful”

It seems that with all the optimisation, economies of scale and more products / services than we’ll ever use…both sides of the buy/sell relationship are not satisfied.

The fundamental buy/sell relationship is changing forever.

Customers want to be involved from concept to use.  Businesses realize that their products are services require the combination of many constituent partnerships from suppliers, partners and customers to be successful in the market.

Everyone has a ton of information now, but that information must be shared in meaningful ways, through discussions to be used effectively.

The information age was the realm of “explicit” data and information, facts and figures.

The Interaction age is about “tacit” knowledge the interpretation, cognitive and ultimate use of information that is fluid in nature.

To benefit from this organisations must have highly evolved empowering ways to interact and collaborate outside the boundaries of their own organization with a primary focus on delighting customers.

Welcome to The Interaction Age.  It’s not about more information (there is enough out there), it’s about the right information, in the right context from the right people/organisations “pulled” at the right time.

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  1. 21st Century Management « The ASPIRE! Group Blog reblogged this and added:

    […] last week’s blog I talked about The Interaction Age, an age where competitive advantage would come from tapping into people’s creativity and that […]

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