Strategic Planning: Harness Chaos – Part 3

What You Should Do About Chaos

Number one: Recognize that it exists.

Every mom has said it: life isn’t fair, and it’s not controllable. Expecting the business environment to be anything but haphazard is foolhardy. But for all their randomness, state theorists, complex systems don’t spontaneously combust. This fact inspires our trust in gravity; it should also inspire a loosened grip on your company. A little chaos breeds creative results beyond the scope of any corporate control.

Number two: Become strategically adaptive. McKinsey’s Eric D. Beinhocker asserts that “to prosper in the long run, a company must adapt as readily as its market, or more so.”[i] As previously observed, a market is by nature highly adaptable. How to beat the market at its own game? Foster and Kaplan, critics of “cultural lock-in,” suggest supplementing convergent thought with divergent thought, which encourages a culture of inquisitiveness. Divergent and convergent thought work in synergy, turning basic business questions into opportunities for creativity. Chaos does not have to imply anarchy; the most useful chaos is planned.

Number three: Create a positive corporate culture. Intentionally focus on market-reflective flexibility. This strategy positions your company to innovate or jump onto the newest in-novation. During the 1988 wars among computer operating systems, Microsoft kept a finger in every OS pie—UNIX, DOS, OS/2—until a clear winner emerged. If Windows hadn’t become the new industry standard, Microsoft still wouldn’t have lost ground. “In the face of uncertain markets,” writes Beinhocker, “Microsoft followed the only robust strategy: betting on every horse.”[ii]

Number four: Pursue an internally chaotic culture. Eschew micromanagement in favor of self-organization, creativity, and innovation. Foster and Kaplan urge managers to “control what you must, not what you can; control when you must, not when you can. If a control procedure is not essential, eliminate it. Measure less; shorten the time, and the number of intermediaries, between measurement and action, and increase the speed with which you receive feedback.” The ultimate rationale behind this methodology? “The point is to let the market control wherever possible.”4

Number five: Be sincere. Too many employees drown in kitschy corporate slogans. The edict “Be creative!” is worthless if not backed by actual company policy. Prioritizing schedule and bottom line is any company’s default mode; continuing in that mindset while claiming innovation is not only deceitful but lethal to actual creativity. When a midlevel manager lamented that “‘Dilbert’ isn’t far off,” he spoke for all smart, stifled employees: prescribed processes and empty encouragement strangle any complex system. Genuine, chaotic creativity keeps it thriving.

Next Time we’ll wrap up chaos with “The Edge of Chaos.”

[i] Eric D. Beinhocker, “Strategy at the Edge of Chaos,” McKinsey Quarterly Online 3(2000).

[ii] Eric D. Beinhocker, “On the Origin of Strategies,” McKinsey Quarterly Online, 3 (2000).


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