Erich Joachimsthaler tells the story in his new book, The Interaction Field, about transforming brands and businesses. He describes an interaction field that goes beyond selling products or creating a community. In his framework, the best companies are nurturing all stakeholders’ health and well-being – not just shareholders.
No longer will a company like John Deere sell a $600K tractor to a farmer be a sustainable model. Instead of mere transactions, brands like Deere will need to build what he calls an interaction field – which goes beyond a community. It is an eco-system where everyone benefits.
In the example from his book, Erich speaks about how John Deere must reimagine their business by placing sensors in every field where a Deere tractor works. The objective is to create a shared data ecosystem that helps farmers become profitable. They can share the collected data with the community of stakeholders – fertilizer companies, farmers, coops, financial organizations, agriculture professors, investors, and beyond.
The Interaction Field goes beyond the idea of solely building stakeholder value – to creating enduring value based on data to all who share in the success of a market.
A $30B company like Deere needs a profitable farmer who can afford their equipment. But Deere wants to solve problems for both farmers and agriculture, and society at large. They need to do this by going beyond the transaction.
How do they capture more value- how can you help make more farms more profitable? It can’t be subsidy by the government. But if a company like Deere can build on top of their existing legacy business – use the tractors to put sensors in the field measuring irrigation, soil condition, moisture levels, and aggregate data across farms and share the knowledge. They will continue to endure through sharing value with all who will benefit from healthy farms. If you can build an interaction field of shared data connection and shared learning – everyone benefits.
Through this interaction field model, farmers can find ways through the shared data to be more productive. It benefits everyone because when the farmers are more productive, their business is more sustainable – both environmentally and financially.
What Is Happening Today?
Joachimstnhaler believes that the actual value of any company is its intangible assets. Intangible assets are a critical means of capturing value – via the brand and through their eco-system.
Within S&P 500 companies, 85% of the value is intangible – not tangible assets.
We are at a point where traditional ways of building a brand are less effective. You can no longer create a product, service, or experience and communicate and position that brand. Today consumers and businesses have so many choices.
Value is changing. It used to be supplying product was enough. Now a new business model involves value getting captured on the demand side. It is in the interactions fields where value gets created.
Think of Airbnb. A marketplace where AirBnB creates value for alternative accommodations. It is a platform business.
It is creating more value for everyone. The best companies make AND share the value created. In the books, Erich shares some great examples from companies like Lego too.
Fields of Dreams
Most businesses today focus on competition and disruption instead of collaboration, participation, and engagement. They focus on transactions instead of interactions. They seek to optimize or extract value rather than share it. They build assets and thrive on an enormous scale, substantial distribution networks, and brand recognition. But then along comes a rival that doesn’t care much about your brand and your other assets, and it either rushes past you or mows you down.
The Interaction Field, management expert, and professor Erich Joachimsthaler explain that this new model is the only way to thrive in this environment.
Companies who embrace this model generate, facilitate, and benefit from data exchanges among multiple people and groups — from customers and stakeholders–and those you wouldn’t expect to be in the mix, like suppliers, software developers, and regulators even competitors. And everyone in the field works together to solve big, industry-wide, or complex and unpredictable societal problems.
The future is going to be about creating value for everyone. Businesses that solve the immediate challenges of people today and the significant social and economic challenges of the future are the ones that will survive and grow.
I love books on strategy – and this one has sewn a few seeds.
You can set up a time to chat with me about your marketing challenges using my calendar. Email me jeffslater@themarketingsage.com Call me. 919 720 0995. The conversation is free, and we can explore if working together makes sense.
Photo by Taylor Siebert on Unsplash
