Globalization and technology have heightened the interconnection, interdependence and fragility of today's marketplace. In response, Philip Kotler and John Caslione, authors of "Chaotics: The Business of Managing and Marketing in the Age of Turbulence," provide a system for steering businesses through both the best and worst of times.
The authors point to a National Intelligence Council 2008 report that reinforces the point that, "For the foreseeable future, the world will be facing ongoing disruptions, turbulence, chaos and violence. These factors will impact business around the globe directly and indirectly, creating an environment that business leaders will have to deal with if their companies are to remain viable over the long term."
Undoubtedly, following the economic meltdown, companies are already proceeding more cautiously while adopting a "risk-oriented" mindset. Yet, a company's management often responds ineffectively to turbulence. The authors write that when businesses are unable to predict customers' expectations, they tend to abandon their core principles.
Rather, in tough times, business leaders should improve operational efficiency and reduce unproductive expenditure — a good practice at any time. Yet, Kotler and Caslione argue that it's essential to avoid across-the-board cuts, instead focusing on measured cuts. "To do this," they write, "management need to ask the tough questions: How did we perform during the last recession? What is our liquidity situation? Do we have a roadmap that will take us into the future?"
Some of the mistakes that a company typically makes during a turbulent economy include firing talent; cutting back on technology; stopping product development; and reinforcing hierarchy over collaboration. Rather, business leaders need to identify inefficiencies in areas including finance, manufacturing, purchasing and human resources. During turbulent times, this "fat" can make companies particularly vulnerable.
