Why on earth should marketers embrace systems thinking? Isn’t marketing about simplifying and clarifying customers and product messages, so the two connect beautifully? Perhaps — but only in an age when you can reasonably expect customer demand and product utility to remain consistent. That age is over.

The past two years have shifted where and how people live and work. That’s shifted demand in odd and uncertain ways. Some products have boomed in demand, others have cratered. Where and when people want products and services have also become much more open questions. 

Here’s your choice: Are you going to wait for them to figure it out? Then you’re just reacting to demand. 

Alternatively, are you going to seek to understand the dynamics leading to the change in demand, so your products can help lead it? Then you’re stimulating demand. If you’re the sort of marketer who’s reading our Insights, we know you want the latter.

And that means embracing systems thinking.

Complexity is the new normal

On one of my weekend podcasts I was listening to recently, an “Extreme Rock” mountaineer was asked what attributes people need for her sport. 

She paused for a moment. “Well, you have to be comfortable with complexity,” she said, finally. 

If there’s one message for today’s CMO, it’s that: get conformable with complexity. And that means embracing systems thinking. There’s a marketing mountain to climb, and you need to understand all the tools you need to summit it. 

To prove the point, let’s look at that most dull of subject which has taken on a dramatic new importance: supply chains. (Yes, again.)

Supply chain problems are your problems

Here’s a simple thought experiment: think of your favourite treat. Maybe it’s an expensive small-batch coffee, or an exclusive single malt whisky, or a charming hardback book. Perhaps it’s up-market fashion. You have a little spare money in your pocket, and you’re keen to treat yourself. And you can’t get what you want from your favourite brand for neither love nor money.

Who do you blame?

Do you blame the shipping operators? Or the raw material suppliers? The infrastructure officials in one of the originating nations?

Or do you blame the brand that’s unable to satisfy your demand?

It’s going to be the last one, isn’t it? We’ve had decades of abundance, and goods on demand. That period may well be over, but our brains take a while to adjust, and we’ll be blaming the simple — the brand — over the complex — the supply chain — for the time being.

And that’s why the new supply chain complexity is your problem. 

There are no easy fixes for systemic problems

You could try to ignore the systemic issues, and apply quick fixes. In fact, that’s precisely what most businesses are already doing. 

In 2020, as supply chains collapsed, a McKinsey survey found the majority of businesses preparing to change their supply chains to increase resilience. By 2021, they’d claimed they’d done so. But if you look at the detail, a more complex scenario and less impressive emerges:

Last year, most companies planned to pull multiple levers in their efforts to improve supply chain resilience, combining increases in the inventory of critical products, components, and materials with efforts to diversify supply bases while localizing or regionalizing supply and production networks. In practice, companies were much more likely than expected to increase inventories, and much less likely either to diversify supply bases (with raw-material supply being a notable exception) or to implement nearshoring or regionalization strategies

In other words, they embraced complex solutions in a crisis, and then retreated to simple ones the very second that the immediate threat had passed. 

Systemic change requires systems thinking

This is a classic retreat to the norm — and a missed opportunity. Rather than embracing complexity, re-engineering supply chains and building long-term sustainability into their business, they just reiterated a little from just-in-time supply chains. 

They built a buffer.

This is a simple solution to a complex problem, that allows you to weather a short-term crisis, but not a long-term structural shift. But long-term changes are undoubtedly what we’re seeing. You’re just booting the difficulty down the road, to deal with later. 

Smarter businesses — led by smarter CMOs — will be starting both to rethink their supply chains for sustainability, but also to start a conversation with their customers about it. And this is where a deep systemic understanding of supply and demand can come into play. I’ll feel much better about a delayed luxury treat if, for example, I feel I’ve preordered something from a limited supply, guaranteeing that I will get what I want eventually — and building anticipation. 

This turns frustrated desire into delayed gratification. And is a much better customer experience, even if the net effect of a delayed reward is the same. To do this effectively, we need to understand the systems that underlie our products — and turn that into a customer-friendly narrative. 

As the most recent Fjord Trends report put it:

We expect an urgent need for the coming together of marketing, customer service and supply chain to protect and support brand reputation.

And perhaps even enhance it. 

The good news in systems thinking

So, get your metaphorical crampons out, and prepare for the climb. There’s lots to look forward to:

1. As we noted above, most companies are dodging this challenge. There’s a huge competitive advantage baked in for companies willing to make the changes required for long term business sustainability.
2. Treating the process as part of your brand narrative around sustainability is a clear customer relationship win — as well as helping manage expectation when supply chains break and goods slow to arrive. 
3. Your job just got a lot more interesting, if you can rise to the complexity challenge… 

The systems that underly demand and supply have just shot through an accelerated change, thanks to the pandemic. The climate crisis will act as a further accelerator. You don’t need to just pay attention to systems thinking — you need to embrace it.

It’s the only tool that allows you to understand and react to the changes coming to your – and every — business in the coming months and years.