Thriving on Chaos (by Tom Peters)

Thriving on Chaos (by Tom Peters)

Thriving on Chaos — A world turned upside down—Figure 2
- Marketing
  - Was/Is
    - Mass Markets
    - Mass Advertising
    - Violent battles to shift share point
    - Functional integrity of marketing pros
  - Must Become
    - Market creation
    - Niche focus
    - Innovation from being closer to markets
    - Thriving on market fragmentation
    - Ceaseless differentiation of any product (no matter how mature)
- International
  - Was/Is
    - “Global” brands which are managed from the U.S.
    - International as an adjunct activity
    - For big firms only
  - Must Become
    - Focus on new market creation
    - Development done offshore from the start
    - Essential strategy for firms of all sizes
- Manufacturing
  - Was/Is
    - Emphasis on volume, cost, hardware, functional integrity
  - Must Become
    - Primary marketing tool (source of quality, responsiveness, innovation)
    - Part of product design team from the start
    - Short runs
    - Flexibility
    - People supported by automation
- Sales and Service
  - Was/Is
    - Second-class citizens
    - “Move the product” predominates
  - Must Become
    - Heroes
    - Relationship managers ( with every customer, even in retail)
    - Major source of value added
    - Prime source of new product ideas
- Innovation
  - Was/Is
    - Drive by central R&D
    - Big projects the norm
    - Science rather than customer-driven
    - Cleverness of design more important that fits and finishers
    - Limited to new products
  - Must Become
    - Small starts in autonomous and decentralized units the key
    - Everyone’s business
    - Driven by desire to make small and customer-noticeable improvements
- People
  - Was/Is
    - Need tight control
    - Try to specialize and diminish role
  - Must Become
    - People as prime source of value added
    - Can never train or involve too much
    - Big financial stake in the outcome
- Structure
  - Was/Is
    - Hierarchical
    - Functional integrity maintained
  - Must Become
    - Flat
    - Functional barriers broken
    - First-line supervisors give way to self-managed teams
    - Middle managers as facilitators rather than turf guardians
- Leadership
  - Was/Is
    - Detached
    - Analytic
    - Centralized strategy planning
    - Driven by corporate staffs
  - Must Become
    - Leader as lover of change and preacher of vision and share values
    - Strategy development radically bottom-up
    - All staff functions support the line rather than vice versa
- Management Information Systems
  - Was/Is
    - Centralized for the sake of consistency
    - Internally aimed
  - Must Become
    - Information use and direct customer/supplier linkups as strategic weapon managed by the line
    - Decentralization of MID a must
- Financial management and control
  - Was/Is
    - Centralized
    - Finance staff as cop
  - Must Become
    - Decentralized
    - Most finance people to the field as “business team members”
    - High spending authority down the line
Thriving on Chaos — The prescriptions
- Creating Total Customer Responsiveness
  - The Guiding Premise — C-1: Specialize/Create Niches/Differentiate
  - The Five Basic Value-Adding Strategies
    - C-2: Provide Top Quality, as Perceived by the Customer
    - C-3: Provide Superior Service/Emphasize the Intangibles
    - C-4: Achieve Extraordinary Responsiveness
    - C-5: Be an Internationalist
    - C-6: Create Uniqueness
  - The Four Capability Building Blocks—To execute strategies C-1 through C-6, several capability building blocks are essential.
    - C-7: Become Obsessed with Listening
    - C-8: Turn Manufacturing into a Marketing Weapon
    - C-9: Make Sales and Service Forces into Heroes
    - I-1 to 1-10: Pursue Fast-Paced Innovation
  - The Evolving Firm — C-10: Launch a Customer Revolution
- Pursuing Fast-Paced Innovation
  - The Guiding Premise — I-1: Invest in Applications-Oriented Small Starts
  - The Four Key Strategies
    - I-2: Pursue Team Product/Service Development
    - I-3: Encourage Pilots of Everything
    - I-4: Practice “Creative Swiping”
    - I-5: Make Word-of-Mouth Marketing Systematic
  - Management Tactics to Encourage Innovation
    - I-6: Support Committed Champions
    - I-7: “Model” Innovation/Practice Purposeful Impatience
    - I-8: Support Fast Failures
    - I-9: Set Quantitative Innovation Goals
  - The New Look Firm — I-10: Create a Corporate Capacity for Innovation
- Achieving Flexibility by Empowering People
  - The Guiding Premises
    - P-1: Involve Everyone in Everything
    - P-2: Use Self-Managing Teams
  - The Five Supports (Add Them)
    - P-3: Listen/Celebrate/Recognize
    - P-4: Spend Time Lavishly on Recruiting
    - P-5: Train and Retrain
    - P-6: Provide Incentive Pay for Everyone
    - P-7: Provide an Employment Guarantee
  - The Three Inhibitors (Take Them Away)
    - P-8: Simplify/Reduce Structure
    - P-9: Reconceive the Middle Manager’s Role
    - P-10: Eliminate Bureaucratic Rules and Humiliating Conditions
- Learning to Love Change: A New View of Leadership at All Levels
  - The Guiding Premise — L-1: Master Paradox
  - The Three Leadership Tools for Establishing Direction
    - L-2: Develop an Inspiring Vision
    - L-3: Manage by Example
    - L-4: Practice Visible Management
  - Leading by Empowering People
    - L-5: Pay Attention! (More Listening)
    - L-6: Defer to the Front Line
    - L-7: Delegate
    - L-8: Pursue “Horizontal” Management by Bashing Bureaucracy
  - The Bottom Line: Leading as Love of Change
    - L-9: Evaluate Everyone on His or Her Love of Change
    - L-10: Create a Sense of Urgency
- Building Systems for a World Turned Upside Down
  - The Guiding Premise — S-1: Measure What’s Important
  - Reconceiving the System Tools of Control and Empowerment
    - S-2: Revamp the Chief Control Tools
    - S-3: Decentralize Information, Authority, and Strategic Planning
  - Establishing Trust Via Systems
    - S-4: Set Conservative Goals
    - S-5: Demand Total Integration
Thriving on Chaos — Organizational maps
- The Inflexible, Rule-Determined, Mass Producer of the Past:
  - The corporate center/policy
  - One-way functionally narrow communication via rules and procedures
  - The praetorian guard of central corporate staffs
  - The functionally narrow cop/middle managers
  - A “thick,” opaque barrier marks the transition form the firm to the outside world of suppliers, customers, distributors, franchisees, reps, etc.
  - Formal “receptacles” for the scheduled collection of information from outsiders
- The Flexible, Porous, Adaptive, Fleet-of-Foot Organization of the Future:
  - Every person is “paid” to:
    - be obstreperous, a disrespecter of formal boundaries,
    - hustle and
    - be fully engaged with engendering swift action and constantly improving everything.
  - The new-look corporate guidance system—a vision, philosophy, set of core values (and an out-and-about senior team)
  - Top management “wandering” across functional barriers and out to the front lines of the firm.
  - Top management “wandering” with customers
  - Middle managers routinely crossing functional barriers, “managing horizontally,” without specific top-down guidance.
  - Frontline people, trained in multiple jobs, also routinely communicating across previously impenetrable functional barriers.
  - Frontline people communicating “up.”
  - The “average” person, will routinely be out and about—that is, first-line people communicating directly with suppliers, customers, etc.
  - A thin, almost transparent, permeable “barrier” between the organization and the outside world.
  - Customers, supplier, etc., communicating (talking, hanging out, and participating) “in.”
  - Suppliers, customers, etc., crossing functional barriers to work—and help—inside the firm.

“The greatest danger in times of turbulence is not turbulence; it is to act with yesterday’s logic”. — Peter Drucker

The shift from manual workers who do as they are being told — either by the task or by the boss — to knowledge workers who have to manage themselves ↓ profoundly challenges social structure …

“Managing Oneself is a REVOLUTION in human affairs.” … “It also requires an almost 180-degree change in the knowledge workers’ thoughts and actions from what most of us—even of the younger generation—still take for granted as the way to think and the way to act.” …

… “Managing Oneself is based on the very opposite realities: Workers are likely to outlive organizations (and therefore, employers can’t be depended on for designing your life), and the knowledge worker has mobility.” ← in a context

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