How To Make A Demand Management

FrameworkAn archestra notebook.

© 2013 Malcolm Ryder / archestra

The Who Cares Test

What looks like demand today is dizzying in its variety and impermanence. At the same time, it often seems that levels of demand rise and peak at extraordinary heights and velocity, with little solid predictability of where it comes from.

Those impressions may simply be the most dramatic occasions, with the majority of real demand being far less exciting for providers who intend to “meet demand”.

But if it is fair to assume that demand does continually change to a degree that is of significant concern to a provider, then we have the following: the provider wants a way to bring some consistency to the results of continually shooting at the moving targets.

This would require getting the targets to move in ways that the provider prefers and anticipates. That is, given types of targets would appear where and when the provider preferred.

Framing Demand

In this context, the default notion of management includes all of the functional basics including allocating, directing, tracking and evaluating.

Ordinarily, success in coordinating these efforts involves some process. The process makes it feasible that attention to demand will be continuous and thorough.

But if a process is in place, then what is the purpose of a framework?

A fairly prominent purpose of a framework intersects processes: a framework provides structure to a knowledge-based evaluation.

But the major intent of a demand management framework is to assure that demand itself, rather than the management process, is what will be evaluated.

The framework has most of the responsibility for determining what kind of demand becomes the input for the management process.

The management process then needs to be adaptable enough to deal with that demand that has already attained designated types or levels of importance as input.

Spotting the Target

“Demand” is the universe of requests.

• Requests are what occurs when a need has been articulated – by identifying its associations with instances of abilities, items, or states not yet obtained.

• The most overlooked aspect of a request is its defined focus on given instances. For example, a request exists because, for some reason, a future amount of something is requested, regardless of whether the requester already has any of it or not.

• Therefore, the nature of a request, by definition, is to address an occurrence in a future point in time.

The Importance of Good Aim

For a given organization, the importance of managed demand begins with relevance: the universe of requests that are relevant to the type of fulfillment the organization can provide.

However, the ability to fulfill is not necessarily a preference to fulfill.

Therefore, established preferences in fulfillment mean that a scope is part of the essential definition of "managed" demand.

At-large demand

Relevant demand

Preferred demand

Hunting in the Right Places

At any given time, the totality of at-large demand will exceed the portion of demand that is recognizable in requests.

Yet demand is constantly being converted into requests. The conversions mean that given types of demand may go through variations of volume and location.

Meanwhile, volume and location are, both individually and as a pair, subject to being sorted out into preferred and non-preferred occasions.

The generic tag for the volume and location pair is "source". Often the source is thought of synonymously as the "origin"; but this similarity should be avoided because the origin of demand is far more interesting and can be profiled separately.

The Origin of Demand

The origin of demand is need, but need also has multiple dimensions.

At its core, a need is a decision that some future state “should” materialize because otherwise there will be a loss of either an opportunity or a continuity.

We know this is a sufficient high-level specification of need, because if a party has no interest in either an opportunity or in further maintaining some current state, there is usually no expression of any need that presents a perceived risk if it ignored.

It can be the case that a party lacking a sense of need is actually at risk… but for this discussion the matter at hand is to distinguish the cases of expressed need that become significant demand for the provider.

Cultivating Demand

When there is a desired future state, the path to the future state depends on time allowing for additional opportunity or additional continuity; then inhibitors to what can happen in that allowance increase the party's being at risk, whereas drivers of what can happen in that allowance decrease being at risk.

The question here is whether the likelihood of inhibitors or drivers occurring can be seen. If the likelihood is apparent, then one of the key efforts to manage demand is to affect the risk that creates the demand.

At this point, the analogy of hunting demand still makes sense but it becomes inadequate to inform the success of management; instead, producing demand makes more sense.

Classifying Demand: Risks

Acknowledging risk as a factor that creates demand, an important consideration to include is the difference between negative risks and positive risks.

The term "Risk" most often connotes something negative, but what does it mean to say "positive risk"? In this current discussion, risk involves a trade-off for the party at risk.

• In positive risk, the probability is that the trade-off will put the party in a position to end up with more satisfaction eventually, but first the party has to give up something in order to be in a position to get something else. For example, making a loan that is likely to be repaid with interest is a positive risk.

• A negative risk comes without a probability that the trade-off has a positive eventual outcome. For example, making a loan that is unlikely to be paid back is a negative risk.

It is also true that risks come with varying strengths of positivity or negativity, and those relative strengths further differentiate types of demand.

Classifying Demand: Motivations

In the very beginning, however, what is it that makes people desire to have something other than they already have? Or said differently, what is the motivation of the requester?

• One example of how this question has been tackled is Maslow's Hierarchy. Maslow theorized generic types of human needs, arranged bottom-up by importance, including physiological, safety, social, esteem, and self-actualization needs. In his theory, people are motivated to satisfy their needs at their current level and also aspire to higher levels.

• Another example is based on the idea that people have an imagination about their identity and they intend to become what they imagine or, once having done that, to remain what they imagine.

The Seeds of Demand

Motivation will be the companion to Risk in causing need to be expressed as demand.

A big characteristic of demand is the needy party’s perception of whether the current risk involved is positive or negative.

Additionally, that party’s motivation may be evaluated for the feasibility of its ambition, and this can characterize what expectations are reasonable and important to address as demand.

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Compatible DemandThe combination of influences exerted by the provider is a way to direct demand shaped to the fulfiller's advantage.

But, to utilize the influence, the provider considers its own capabilities and assurances about where and how it can show up with fulfillments that will meet the expectations the provider has both gained and formed.

All requests are prioritized according to the fulfiller’s confidence and the provider’s plan for being the requester’s selected agent of fulfillment

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Management StrategyNeed originates Demand. Demand then is expressed as Requests. In effect, requests give actionable shape to need, and the provider wants to concentrate on addressing the requests that are most compatible with the fulfiller. The provider can strategically affect the demand.

For example: when requests are being addressed, providing information about possible fulfillments influences the requester’s perception of the risk, which influences the acceptance of the provider’s offering. In the same way, a provider also has an option to attempt to influence the motivation of the requester.

Extending that approach, providers can themselves propose requests as a way to exert influence in the fulfiller’s preferred direction.

In effect: the demand management effort being made here is to design the demand. Further, it is to influence the associations that can be made between the need and the given types of fulfillments that a provider can offer against requests. Ultimately, well-matched demand is forwarded with trust to appropriate fulfillers.

Operationally, a variety of defined roles can take on differing responsibilities and assignments for influencing, by preconditioning, the eventual response to designated kinds of things.

The Demand landscape from Origin to Request

NEEDORIGIN

RISK

MOTIVATION

DEMANDDEMANDREQUEST

SOURCE

Inhibitors Drivers

Position Identity

SCOPE

Location Volume

Relevance Preference

(future states) (response targets)

© 2013 Malcolm Ryder / archestra

Producing the Desired Demand

• Investigate

• Predict

• Expect

• Shape

• Classify

• Select

• Distribute

Management functions such as allocating, directing, tracking and evaluating are mainly about how managers influence operations. But that vocabulary helps to point out that often what passes for “demand management” is itself actually about Response-to-Demand operations.

In the current environment of continually morphing markets and competitive options, a more essential matter is to proactively tackle prospective demand by collaborating in its formation and circulation.

Managing demand is done to wind up with the demand that is most helpful to the provider and fulfiller.

DESIGN demand

DEVELOP demand

DELIVER demand

Intelligenceis a success factor

Agilityis a success factor

Speedis a success factor

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alcolm

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