Managing Chaos

A young company I worked with had massive growth over its short lifetime and, like any toddler company, it showed signs of wilfulness, petulance and dis-obeyance. The CEO was successful and had a clear outcome for the future in mind. Things had changed though, and he needed to refocus on growth and reclaiming market share. His innovative and tenacious nature had assured him of this sort of result in the past but, now it was time to fulfil the goal of becoming the stand out market leader.

Previously he led the pack but the pack was catching up. In the early days of his business they set the standard in the industry but, like anything that is exceptional, copycats arrive and begin to grab market share.

When competitors show up and start demanding attention, a business owner’s actions can become erratic, lose the responsiveness that is needed and can even become reactive in a strategic approach to managing the business.

Being reactive can confuse the purpose and the outcomes of a business and like any toddler ‘tantrums’ can begin to occur within its systems.

In business there is a reason for systems. Systems have a place in organising how things happen. Generally, the daily routines are set up to function efficiently, but when the business owner becomes reactive, the effect can wreak havoc on the foundational systems that gave rise to the business’s competitive advantage.

Reacting to circumstances can create the appearance that the business owner is working to control the shift in their market position. However, that shift may not be controllable. It can be more advantageous if owners view their slipping market position as feedback and respond proactively to that feedback and the message that is hidden in the obvious behaviour of the copying competition.

The CEO realised that he had become reactive to the actions of competitor’s in the market and this had changed the way he was working with his company

Back in the 1960’s, chaos theory was developed and suggests there is a randomness within systems that is not predictable, but there is however, a systematic beauty behind the chaotic behaviour of things that appears random but is actually governed by a hidden, ordered system.

In our case, the CEO reverted to observing what was going on around him. It may have appeared random, but really the market was telling him what he had to do differently. He started to see the copying by his competitors as feedback rather than as a threat and started responding directly to that feedback.

Business is complex, the evolution of behaviours and activities over time all present information that will steer the direction of your endeavours. Being reactive is one thing but it is better to use the feedback to direct your response strategically. As in chaos theory, the complex system may reveal underlying simplicity that can be used to direct the way you move your business forward.

When you’re a business owner, be ready for change. If it comes in the guise of chaos, allow it and observe the underlying causes and affects – it’s in the underlying causes and affects that valuable, lessons and insights are hidden. Decipher these and the path forward becomes crystal clear.