2021 Castlin Manifesto: Strategy in Polemy
by JP Castlin
JP Castlin is a strategic thinker and consultant based in Sweden. Major themes in his Manifesto are complexity and emergent strategy. In the chapter on marketing, he is not shy about challenging prominent figures. The paper is 71 pages including an impressive 9-page bibliography with academic papers, articles, and books cited throughout the text.
“Emergent strategy is a bottom-top approach likely to be a novel concept for many. Unlike deliberate strategy, which plots a specific course, emergent strategy follows a direction but discovers the path along the way, arising in response to unexpected opportunities and challenges as the competitive reality in which the company acts changes over time.”
“The success of business functions, not least executive ones, undoubtedly depends on information being sent in both directions; management is partly management of people, but mainly management of connections between people. But a part of the hierarchy’s value nonetheless lies in creating mandate to enforce decisions and drive change informed by emergence.”
“In entrenched markets, barriers to entry are high and speed of change is low… Entrenched market players are thus more likely to upweight deliberate strategy.”
“In exposed markets, barriers to entry are low and speed of change is high… Exposed markets therefore see more changes that have never occurred before, so-called discontinuities, than entrenched markets do. As a result, exposed markets are significantly less predictable, have a high noise-to-signal ratio and are more difficult to forecast (often to the point of impossibility)… Firms in exposed markets must develop the capability to respond quickly. Consequently, they do well to upweight emergent strategy substantially.”
MARKETING IN PRAXIS
“Praxis is… seen as different from practice through its additional promotion of reflection… Yet praxis is nonetheless scarcely seen, as it were, in the wild.”
One thing Castlin has been reflecting on is differentiation, which he says “turns out to not quite live up to its billing… As Ehrenberg, Romaniuk and Sharp demonstrate in Evidence Concerning the Importance of Perceived Brand Differentiation, customers seldom consider brands to be different or unique, but more or less the same within their category; brand perception scores are exceedingly similar. One might therefore surmise that differentiation would not be the reason for purchase.”
“The evidence clearly indicates that differences that exist on a category level are not perceived to do so on a brand level. Brand preferences exist, but do so as a result of salience, habit or availability, not meaningful differentiation.” On the other hand, he writes, “Some brand differences do [exist]. If they did not, there would not be such a thing as brand salience, all goods would be commodities, price premiums would be unobtainable, and so forth.”
The 2019 Manifesto lamented short-termism and favorably cited the Binet and Field research on the optimal mix of brand building (long-term) and sales activation (short-term). In contrast, the 2021 Manifesto takes a harsh stance on Binet and Field’s work, saying it is “venturing dangerously close to pseudo-science.” One of the criticisms is the inherent selection bias of the IPA Databank.
Throughout the Manifesto there are numerous footnotes with additional commentary, such as: “The transformation from advertising effectiveness to marketing effectiveness is interesting to note… In the short vs long comparison, precious little work exists on what the net overall return might be if one reinvests gains from short-term activation campaigns into, say, product development. Given that advertising tends to be a weak force, it could very well prove more profitable in the long-term, but this is admittedly mere speculation and research would be almost impossible to set up.”
COMPLEX ADAPTIVE SYSTEMS
“A complex system cannot be reduced; causality is networked and non-linear, so there will be no clearly distinguishable cause-and-effect pathways. Consequently, when dealing with such, one is much better off trying to find a root plausible cause.”
Castlin introduces “abductive logic, occasionally called the science of hunches [which] does not require the same clarity of causality. Instead, it relies on relevant experience and what one somewhat loosely might call getting a feel for how the system is disposed to behave. It is therefore better suited [than deductive or inductive logic] to handle the complex.”
“Companies act in markets that are… complex adaptive systems. Marketplaces, in other words, are dispositional, not causal. This means that although they may be disposed to display a certain kind of behavior following probability distributions, no events will… unfold in the same way twice except by accident; everything is context-specific and context is ever-changing. Consequently, attempts to create context-free rules… are inherently doomed to failure.”
“Strategists who come to the conclusion that there are single causal explanations for performance are going to be objectively wrong, regardless of how they got there. Phil Rosenzweig has labelled this analytical faux pas the delusion of single explanations.”
“Those who know me well are… aware that I have long argued that the single most detrimental bias trap in corporate evaluation is the halo effect… If an observer finds a particular aspect of a subject attractive, they will generalize the attraction and become positively dispositioned towards the subject… Businesses that are doing well are therefore routinely believed to have outstanding strategies, astute management, brilliant marketing and so forth.”
“The significantly more plausible explanation is, to quote Duncan Watts, that the events that we label as outcomes are never really endpoints. Instead, they are artificially imposed milestones, and where we choose to impose an ‘end’ leads us to infer very different lessons indeed.”
Castlin also has a section on corporate values; he cites research ironically indicating the negative correlation between stated corporate values and corporate behavior. Another section discusses counter-intuitive research indicating that companies focusing on market share growth tend to be less profitable.
Castlin, JP. 2021 Castlin Manifesto: Strategy in Polemy. Lidingö, Sweden, 2021.
71-page PDF is available from the author.