Monday, October 21, 2013

Exploiting Chaos

Jeremy Gutsche's 2009 book Exploiting Chaos: 150 Ways to Spark Innovation During Times of Change provides practical advice about how to thrive when life seems like a maelstrom of uncertainty. Soundview Executive Book Summaries offers this take on Gutsche's work:

"Chaos is the uncertainty sparked by uncharted territory, economic recession and bubbles of opportunity. Chaos causes organizations to retreat, but not always.

Did you know that Hewlett-Packard, Disney, Hyatt, MTV, CNN, Microsoft, Burger King and GE all started during periods of economic recession? Periods of uncertainty fuel tremendous opportunity, but they also reshuffle the deck and change the rules of the game."

Here are some of Gutsche's key concepts:

1) "The upbeat impact of crisis is that competitors become mediocre and the ambitious find ways to grow." Gutsche cites the example of the Kellogg Company, which thrived during the Great Depression and seized the cereal market from once-dominant Post. Post rested on their laurels during the economic slowdown, while Kellogg doubled their advertising budget and convinced consumers that Kellogg products were superior to Post products.

2) "Innovation is not about market timing. It is about creating something that fulfills an unmet need." Does it sound like a good idea to launch an expensive magazine during the middle of the Great Depression? Henry Luce thought that it did and because Fortune filled an "unmet need"--affording readers a unique opportunity to understand how the corporate world functions--his new magazine became a huge success.

3) "The time to act is always now." Basketball Hall of Fame Coach Pat Riley once wrote about "paralysis by analysis," the tendency to get so caught up in trying to perfectly determine what to do that one ends up doing nothing at all. Gutsche declares, "You don't need to have everything figured out. Colloquially, chaos is synonymous with stress and disorder, but this doesn't have to be true. By knowing that you can adapt, and by seizing the opportunity presented by chaos, you can avoid being trampled and step away from the herd."

4) "Successful ideas first require excessive testing and experimental failure." Thomas Edison put it best when he described the process of inventing the light bulb: "I have not failed 1000 times. I have successfully discovered 1000 ways to not make a light bulb."

5) "Chaos should not be tempered with structure, it should be harnessed with ideology." A spider cannot survive if its arms are ripped off but if a starfish's arms are ripped off then each arm becomes a new starfish; the difference is that a spider has a centralized nervous system, while a starfish has a decentralized nervous system. Many groups--ranging from Alcoholics Anonymous to various terrorist networks--have figured out the power of being decentralized, held together not by an inflexible organizational template but only by a shared belief/ideology. Gutsche quotes Rod Beckstrom and Odi Brafman, authors of The Starfish and the Spider and coiners of a rule that they call The Power of Chaos: "Starfish systems are wonderful incubators for creative, destructive, innovative or crazy ideas. Anything goes. Good ideas will attract more people, and in a circle, they'll execute the plan. Institute order and rigid structure, and while you may achieve standardization, you'll also squelch creativity. Where creativity is valuable, learning to accept chaos is a must."

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