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From the Publisher
CHOICE April 2010 Editors' Picks “…clearly written, interesting, and practical book.” — Choice magazine
Praise for Chaotics:
“It’s a simple and profoundly important fact that the practice of management needs retooling as much as our economy and financial system in general. Chaotics is a superb start on the retooling process—especially its emphasis on imbedding resilience in organizations. Leave it to Phil Kotler to give us lift-off power when we need it most.”
— Tom Peters, coauthor, In Search of Excellence
“An unprecedented book—for unprecedented times. Should be required reading for all managers in today’s chaotic world.” — Marshall Goldsmith author of What Got You Here Won’t Get You There and Succession: Are You Ready?
“Kotler’s and Caslione’s timing is simply perfect. Chaotics offers tremendous insight into our new normality of turbulence and uncertainty—which most businesses are ill-equipped to handle. Chaotics is an excellent strategy manual for business leaders and their organizations for handling and overcoming all crises, now and into ‘The Age of Turbulence.’” — Ferdinando “Nani” Falco Beccalli, President and CEO, GE International
“In times of unprecedented turbulence and volatility, new ways of thinking about and approaching the enormous issues facing business leaders are essential. Chaotics provides a compelling analysis of the issues and the roadmap needed to navigate through an increasingly risky and unpredictable business environment.”
— John Hahn, Managing Director, Providence Equity
“When skies are darkest, the brightest stars shine clearest. In the corporate world, they are the ones with strategic focus, not those who resort to knee-jerk, across-the-board cost cutting. In marketing’s gloomy sky, Philip Kotler is our brightest star. Together with strategist John Caslione, he has created this outstanding, timely, practical book to steer businesses through these turbulent times. Buy it. Read it. Do it.”
— Emeritus Professor Malcolm McDonald,
Cranfield University School of Management, United Kingdom a author of Creating a Company for Customers
“There will be winners and losers emerging from this Age of Turbulence. Chaotics provides a timely framework for dealing with turmoil and prevailing in the zero-sum contest for survival.” — George Day, Geoffrey T. Boisi Professor of Marketing,
Wharton School, University of Pennsylvania
CHOICE April 2010 Editors' Picks “…clearly written, interesting, and practical book.” — Choice magazine
Meeting the New Challenges
WHAT IS THIS book about? Those who manage businesses have a certain view of the world and a certain set of practices for dealing with expected changes in the marketplace. Their view, in the simplest terms, is that times are either normal as a precursor to runaway growth and sustained prosperity, or weak as a precursor to dwindling demand and possibly recession. Businesses use a different playbook for dealing with each of these market conditions.
In normal times, they compete with a mixture of offensive and defensive plays, but are not likely to win big. In runaway growth periods, they see new opportunities everywhere. They invest and spend freely to capture what they can. In recession times, businesses cut their costs and investment to ensure their survival.
This view of two underlying market conditions, and two playbooks to guide the firm, is, however, outmoded. There are market conditions beyond these two basic ones. And conditions can suddenly shift from one to another and yet another. One day there is a
9/11 terrorist attack; another day, a Katrina flood. One day there is a panic aboutmortgages and defections that lead to a collapse of the world’s financial system. Big shocks happen more frequently today as a result of an increasingly interconnected global economy supporting giant flows of trade and information.
The shocks come in all shapes and sizes. Inmany parts of theworld a acrossmany industries, important things are happening that are only dimly perceived if at all, and certainly their implications are notmeasured.
It could be two people in a garage building a new gadget called a personal computer. It could be a guy named Jeff Bezos starting an
Internet business called “Amazon.”Or another guy named Steve Jobs building an iPhone. It could be a guy who envisions high yield bonds or another who develops the idea of securitizing mortgages. Had the computer industry, the book industry, the music industry, or the financial industry noticed these visionaries, they would have acted earlier to protect their turf or grab new opportunities.
Business leaders need a new view of the world and a new framework for dealing with it. According to this new view, change is occurring all the time. It can come quickly from any corner of the world and affect any company with a major impact. This is the view to which Peter Drucker first called our attention in his book The Age of Discontinuity.1 This is the view that Andy Grove articulated in
Only the Paranoid Survive.2 This is the view that former U.S. Treasury head Alan Greenspan articulated in The Age of Turbulence.3 This is the view that Clayton Christensen wrote in his Business Innovation and Disruptive Technology.4
It is our view as well that there ismuchmore risk and uncertainty in business affairs today than ever before coming from disruptive innovations and big unexpected shocks. Business leaders have always lived with some risk and uncertainty, taking out insurance wherever possible to blunt the damage. But today, the speed of change and the magnitude of shocks are greater than ever. This is not what was normal in the past. This is the new normality. It goes beyond disruptive innovation to include major shocks.
And how are business leaders to deal with it? Because they must manage during times of greater turbulence, they need a system to make better decisions. They need amanagement framework and system to deal with chaos. They need a Chaotics Management System.
It seems everywhere in the world where we encounter business and government leaders, virtually everyone senses that this time is different, even if they cannot articulate precisely what makes it different.
But as you’ll see in Chapter 1, we often find an immediate acknowledgment and agreement when we explain to these leaders that they’ve entered into a new normality, one in which the days of the two cycles—one up and one down—are over for the foreseeable future. These leaders sense that we’ve entered an era of ongoing a continuous turbulence and heightened chaos. This realization is often accompanied by a sense of relief that they can now articulate what they’ve been sensing, coupled with dread that the traditional up cycle may not kick in to let the good times roll again—at least not like it did in the past.
It is for this reason that we wrote Chaotics.
In Chapter 1 we will identify themany factors creating this heightened turbulence demanding that business leaders need to reinvent their thinking to adopt new strategic behaviors tominimize their vulnerabilities and exploit their opportunities in the new normality.
In Chapter 2 we will explain why mistakes made by business leaders in past down cycles that, while they were not necessarily helpful to their businesses, in this new era they will be not only harmful but fatal to a business if it fails to adjust.
In Chapter 3,we will introduce the ChaoticsManagement System a which provides a roadmap for business leaders to transition their organizations, including adding new critical internal processes, to function successfully and better understand and deal with the events unfolding around them. By providing guidance in the development of early warning systems to detect turbulence in the environment a and constructing yet-foreseen scenarios and strategies, Chaotics will offer new and robust organizational muscle to handle the heightened levels of turbulence and chaos with decisiveness and speed.
In Chapter 4, we will describe new strategic behaviors necessary for each key management function in the organization to improve its short-term performance without jeopardizing its medium- and long-term performance.
In Chapter 5 we will provide a comprehensive roadmap to show how companies can sharpen and strengthen their marketing and sales strategies in turbulent times even when there’s pressure to cut budgets in these areas, and to lay the groundwork for a stronger and longer future with a bigger and more loyal customer base.
And finally in Chapter 6, we will outline what business leaders can do to properly balance short-termwithmedium- and long-term demands of their businesses to preserve and build successful companies to live and thrive for many years into the future.
We are confident that Chaotics will provide business leaders the critical new insights, new perspectives, and a new system—including a set of new strategic behaviors and tools—to successfully navigate the unpredictable and uncertain waters in this new era, The
Age of Turbulence.
1 THE WORLD HAS ENTERED A NEW ECONOMIC STAGE:
FROM NORMALITY TO TURBULENCE 5
What Is Market Turbulence? 12
Factors that Can Cause Chaos 18
2 MANAGEMENT’S WRONG RESPONSES TO TURBULENCE
NOW BECOME DANGEROUS 45
Resource Allocation Decisions that
Undermine Core Strategy and Culture 51
Across-the-Board Spending Cuts versus
Focused and Measured Actions 53
Quick Fixes to Preserve Cash Flow,
Putting Key Stakeholders at Risk 56
Reducing Marketing, Brand, and
New Product Development Expenses 57
Declining Sales and Price Discounting 60
Decoupling from Customers by
Reducing Sales-Related Expenses 62
Cutting Back on Training and Development
Expenses in Economic Crises 63
Undervaluing Suppliers and Distributors 64
3 THE CHAOTICS MODEL: MANAGING VULNERABILITY AND OPPORTUNITY 71
Constructing an Early-Warning System (EWS) 81
Construction of Key Scenarios 89
Scenario and Strategy Selection 98
4 DESIGNING MANAGEMENT SYSTEMS FOR RESILIENCE 103
The Chaotics Management System108
Finance and Information Technology 112
Human Resources 134
5 DESIGNING MARKETING SYSTEMS FOR RESILIENCE 141
Common Marketing Reactions to Crises 145
Strategic Marketing Responses to Crises 150
Operational Issues Facing the Marketing Department 157
Operational Issues Facing the Sales Department 162
6 THRIVING IN THE AGE OF TURBULENCE:
ACHIEVING BUSINESS ENTERPRISE SUSTAINABILITY 169
Business Enterprise Sustainability 172
Posted July 29, 2011
The world is uncertain and growing more so. Businesses must react to new and constant fluidity. Remaining calm and clear-eyed in the face of chaos takes nerve and perception. Marketing guru Philip Kotler and business adviser John A. Caslione offer a rock of judgment to stand on amid these tossing seas. Their knowledgeable, organized approach proves scholarly enough to offer illuminating historical background and forward-looking enough to present a clear - if general - set of guidelines for managing, marketing and selling in a future where change is constant. They identify obstacles and offer strategies to help leaders cope with the unknown and stay flexible when the going is chaotic. getAbstract recommends this readable prescription for thriving in troubled times to anyone who intends to earn a living today, next week or 10 years hence.Was this review helpful? Yes NoThank you for your feedback. Report this reviewThank you, this review has been flagged.