Chaotics: A Book for Businesses in Turbulent Times

Customer Engagement
Customer Experience
Chaotics is the title of Philip Kotler's new book, co-authored with John Caslione. Fundamentally, it is a book of lists.

Chaotics is the title of Philip Kotler's new book, co-authored with John Caslione. Fundamentally, it is a book of lists - seven factors that can cause chaos in the business environment, 10 innovation mistakes to avoid, three behaviors to ensure a new mindset, eight questions to create an "early warning system," four escalating levels of complexity, eight steps to more effective scenario planning, ten practices to weather extended periods of turbulence, four key changes in the marketing landscape, five components of planning for today, five components of planning for tomorrow, seven elements of a company's reputation, five questions having to do with "business enterprise sustainability," eight components of a "firm of endearment," along with four traits and four practices of long-lived companies.Almost all of these lists are from other thinkers, or from journals like BusinessWeek, the Economist, or the McKinsey Quarterly. As useful as these lists and suggestions are (and they are very useful, well worth going through and thinking about), I still found myself disappointed not to find more original thinking in this book. My disappointment was compounded perhaps by the unrealistically high expectations I had for this book, based on its title. At least to my mind, this marvelous, newly minted word "Chaotics" hints at a system for better understanding the nature of the random and increasingly unpredictable events shaping our economic system, from path-dependent networks of interacting customers, to power-law distribution of outcomes for things such as Web hits, influence, and personal income, and the cascading effects of evolutionary change. Unfortunately, there is nothing in this book about these fascinating topics.

Even without the deeper thinking, however, Chaotics is still worth a read. If you are wrestling with how the increasing speed of change is affecting your business, and how to plan for what apparently is an ever more turbulent business world, then there is plenty of rock-solid, plain-vanilla, common-sense advice in the book, and it will be well worth your time.

One very good suggestion, for instance, is to think about these turbulent times not just as a source of vulnerability, but as a source of opportunity, as well. Part of the discipline required to survive and thrive in a turbulent economy is to plan for the worst, but be prepared for the best. I was immediately reminded of our own client, KBC Bank, in Belgium, which has used the economic crisis to steal customers from less stable competitors, and is now engaged in a very carefully orchestrated strategy to ensure that these newly won customers stay loyal for the long term, principally by seeking to broaden each new customer's portfolio of products and services provided by KBC.

One piece of advice in Kotler and Calione's book that resonates very well with our thinking has to do with balancing short-term and long-term considerations. In bad economies the temptation is always going to be to cut costs dramatically and across the board, in order to prop up immediate results - short-term results. You might think of this as simply stopping the bleeding, but prudent, balanced management is even more important in a down economy than in a booming one. So the authors recommend refraining from across-the-board cuts, because in most cases these will come back later to haunt you, but instead make your short-term cuts by eliminating the less profitable or more costly business activities altogether, while continuing to focus on your best businesses, and doing whatever you can to maintain access to the talent you will need when the economy recovers.