Interview with Erich Joachimsthaler
I had the opportunity recently to interview fellow author Erich Joachimsthaler, the Founder and CEO of Vivaldi, one of the largest independent global strategy and business transformation firms, to talk with him about his new book The Interaction Field: The Revolutionary New Way to Create Shared Value for Businesses, Customers, and Society, to explore the important role that connections play in both business and innovation.
1. What are the key elements of an interaction field?
Interaction field companies or interaction field business models are highly open architectures that facilitate interactions among multiple participants, and distinguish from other digital business models like platforms (Uber, OpenTable, etc.) or digital ecosystem (Airbnb or Apple, etc.) in four ways:
- They solve new problems and intractable challenges (framing)
- They are interactional not transactional. They create collaboration, engagement, and participation across the entire interaction field including the nucleus, ecosystem and market makers (designing)
- They are open, inclusive and comprehensive and deeply integrate in the lives of participants (building)
- They enable sharing of value creation (sharing)
2. Why are interaction fields important?
They are important because they drive innovation in entirely new ways, create real new value for consumers and everyone else, and they can create exponential growth because they leverage the hyperconnectivity of everything today: where everything connects and is available anytime and anywhere.
3. What is broken in the current way of creating shared value for businesses, customers, and society?
What’s broken is that we all believe in it, but we don’t do it. Not because for wanting but because nobody has given us a business model or a framework and process to actually build a company that delivers on stakeholder capitalism. That business model is the interaction field model.
4. Has the importance of velocity of businesses changed? And if so, how?
We live in an age of accelerations. This isn’t a new thesis and wonderfully was explored by Thomas L. Friedman in his book: Thank You For Being Late. He believes that computing power has created the conditions for this change. How has the velocity changed? Three ways:
In the 1990s, when information connected to information over a website, called the internet. Two technologies emerged, ecommerce and search which created two of the most valuable companies today, namely Amazon and Google.
The next phase happened around 2007 and 2009 when people connected to people. Social media or networks became the technology and the smartphone enabled explosive connectivity. This created Facebook and Apple and a host of other companies.
We are now on the verge of the third phase where everything connects, people, information, companies, things, machines, devices and other things, anything, anywhere and anytime. Like in the previous phases, a new set of technologies from AI to quantum computing, converge and mature at the same time which will enable untold and unimaginable value creation, innovation and growth.
This changes everything. Traditional boundaries between industries and markets vanish, or at least blur. The notion of geography in terms of distance is changing, we truly live in a borderless world. Traditional value creation of companies through innovation will change.
5. What is the difference between a platform-driven business model and an interaction field-driven business model?
Platform business models are transitional. They solve simple problems. Uber is an example that matches riders with drivers, OpenTable that matches empty restaurant seats with guests. They focus primarily on transactions, and scale based on the frequency of interaction, often a simple core interaction between two or more participants. OpenTable allows restaurants to list open tables, and guests provide feedback in the form of votes, ratings. Platforms are a good business model if you want to build OpenTable for X, the Airbnb for Y or the Uber or Lyft for Z. Go and organize a design thinking workshop and you pretty much can write a draft business model.
Platforms also often are merely self-serving. They create wealth for the orchestrator or shareholders. Look at Uber, are drivers really better off driving for Uber? Are gig economy workers really better off? Look at Amazon, who really benefits, anyone knows who is the richest man in the world? Who made in the pandemic $13.5 billion in one day? Look at Apple, who faces massive lawsuits from developers.