Book Review of Chaotics: The Business of Managing and Marketing in the Age of Turbulence


I recommend!

The New Normality: 2009 delivered a sobering reminder that we now live in the Age of Turbulence, defined by unpredictable and rapid changes that can severely impact a company’s performance. Globalization and technology—creating unprecedented speed and magnitudeare two primary forces that established this new level of interlocking fragility. To manage through this new normality, authors Kotler and Caslione propose a systematic process and organizational behaviors to ensure that businesses succeed and thrive in this new age.

Strategic Framework and Behaviors

Chaotics management provides a framework to detect early signals of turbulence, construct key scenarios, and develop critical strategic responses to mitigate vulnerabilities and capitalize on opportunities, even in today’s highly turbulent times. This novel framework has a foundation in strategic scenario planning, commonly know as war games or game theory. Adding to those strategic planning tools, Chaotics management seeks to elevate organizational readiness in radically uncertain contexts where the relationship between cause and effect are impossible to determine or no manageable patterns exist.

To apply this framework, companies must grow into living, responsive, robust, and resilient organizations. Leaders must nurture new behaviors to address unpredicted chaos on an ongoing basis. Kotler and Caslione offer a five-step process to execute strategic behaviors that should be applied throughout the organization:

1. Reconfirm the current business model and strategy.

2. Assess the organization’s ability to execute strategy under chaos.

3. Define the strategic behaviors execution processes.

4. Execute the new strategic behaviors.

5. Reassess and revise.

In addition, the authors offer practical and behavioral considerations for Finance, IT, Operations, Purchasing, HR, and Sales and Marketing departments in response to turbulent outbreaks.

Marketing Considerations

Kotler and Caslione warn about the three biggest marketing mistakes companies make during turbulent times.

• Stretching to attract new customers before securing the core.

• Cutting marketing budgets in a competitive landscape.

• Neglecting the transparency of today’s environment.

Beyond these warnings, marketers must seek to understand the major changes that have taken place in the marketplace (for example, with clients, competitors, suppliers, and media) as a result of the chaos.

ChaoticsThe unpredictability of today’s environment challenges marketers to nourish a new mindset of always being ready to activate formulated strategies based on the Chaotics Management System. To facilitate organizational readiness, marketers are urged to make strategic planning more dynamic, interactive, and frequent, to drive cross-functional decision making, and to break into smaller and flatter groups to achieve faster reaction time. In creating Chaotics marketing strategies, marketers should consider eight factors:

1. Secure your market share from your core customer segments.

2. Push aggressively for greater market share from competitors matching up to your core customer segments.

3. Research customers more now because their needs and wants are in flux.

4. Seek to increase—or at least maintain—your marketing budget.

5. Focus on all that is safe about your product or service.

6. Quickly drop marketing programs that are not working for you.

7. Do not discount your best brands or offerings.

8. Save your strongest brandsor offerings, and shed the weak.

In the Age of Turbulence, marketers must remain focused on satisfying their target customers and paying disproportionate attention to their most profitable segments. Each marketer must act in a way that best promises to preserve customer base, brand strength, and long-term goals. Chaotics offers both a strong model and a practical set of strategic behaviors to manage through the turbulent environment for the foreseeable future.

This article was published in PM360.

February 2010

Good marketing!

@RamiroRoman

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6 thoughts on “Book Review of Chaotics: The Business of Managing and Marketing in the Age of Turbulence”

  1. Ramiro

    Would love to get your take on the recall situation with Toyota. There are SOOO many business examples to learn from the past, recent past and currently about how to and how not to handle a crisis.

    1. Frank,

      The text book classic is the Tylenol recall.

      From what I can see, Toyota is handling right – although I have to admit, I own Hondas.

      But this reply will have to be a case where the student will learn from the teacher… What is your assessment of how Toyota is handling the situation???

      Ramiro Roman

    2. Doing a little more homework on this topic that Frank raised.

      A Lightspeed survey show that 26% of consumers view Toyota brand as lower quality than US brands, up from 6% pre-recall.

      Also, today, Toyota CEO has publicly apologized – an unprecedented cultural gesture.

      In the Lightspeed research, 2/3 of consumers felt the company was doing a good job of communicating the re-call. Still, the company has a long way to go. Watch for enticing rebates and a strong “safety & quality” campaign for the rest of the year.

      Short term winners will be competitors.

      Ramiro Roman

      1. If I may chime in, I recently read that the recall has resulted in Toyota used car values dropping by 4% to 6%, almost over night. I guess I would differ this from Tylenol since a bottle of Tylenol replaceable with limited out of pocket cost.

        Contrast that with Toyta’s recall…yes they may install the necessary part for free, but are you ever going to feel the same behind that wheel, short of being given a new car?

        You can always buy a new bottle of Tylenol, but not necessarily a car.

        1. Good point Kris, there’s a scale of investment to be considered!

          Death toll has been sited at 34…

          Dealers a getting frustrated… There’s likely to be a big marketing push soon, car buying season is just around the corner.

          Ramiro Roman

  2. The publishing of this book could not be more timely considering the situation Toyota is going through right now! If they would have employed many of the recommendations, behaviors in place, they may have been able to manage all the recalls in a much better way. However, considering the “age of transparency” we live in today with the internet, blogs, tweets, facebook etc… a company has to think not only about the “good times”, but equally important, how to proactively assess, manage and COMMUNICATE the bad times.

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