The market-driven organisation (Day)

George Day’s The Market Driven Organization: Understanding, Attracting, and Keeping Valuable Customers (2007) explains the capabilities, culture and configuration needed to turn customer and market understanding into coordinated action.

When to use it

Use the framework when the organisation needs to become more responsive to customers, competitors and market change.

Origins

Day developed the model through research on market orientation and organisational capabilities, bringing together the resource-based view of the firm and the outside-in logic of strategic positioning. The 2007 edition cited here presents a practical roadmap for building market-driven capabilities rather than treating marketing as the responsibility of one function.

What it is

A market-driven organisation chooses which competences to develop through a shared understanding of industry structure, target-customer needs, desired positional advantage and environmental change. Two capabilities are especially important:

• Market sensing: processes for detecting shifts in customer behaviour, technology, competitors and industry conditions, and for anticipating responses to product, place, price and promotion; see The 4Ps marketing mix (McCarthy) and the purple cow (Godin).
• Customer linking: skills and processes that create collaborative relationships, spread customer knowledge quickly across the organisation and make responsibility for response clear.

Day’s change process combines diagnosis of current capabilities, anticipation of future needs, bottom-up redesign of relevant processes, top-down direction around customer value, appropriate IT and CRM support, and monitoring against performance targets.

Capabilities of a market-driven organisation

Capabilities alone are insufficient. They need a market-driven culture whose values and behaviour support external orientation, and a market-driven configuration whose structure, controls, incentives and decisions reinforce it. Without those conditions, insight remains trapped in reports or one department.

Examples in Day’s 2007 discussion include Wal-Mart, Virgin Airlines, Disney and Gillette as organisations whose market knowledge supported advantage, and IBM or Motorola as warnings about failing to adjust to shifts in computing and mobile technology.