Thrive on chaos to succeed
Telcoinabox founder Damian Kay says successful businesses must learn to love chaos
How many times have you heard the words, “If it ain’t broke don’t fix it”? Well actually, “If it ain’t broke look harder and fix it anyway.” This article is about challenging old thinking and creating a new motto to fit the real business world.
Why is chaos so good?
All thriving industries are inherently chaotic. It is put simply a product of the world we live in today. Everything around us is forever changing – peoples’ tastes due to growing affluence and double incomes, there is far more information and products available to us which lead to more choices, and without fail, more complexity. For a business to ‘thrive’ in this constant flux of change every business must become obsessed with being responsive to customers and without fail, constantly innovative. This means the people at the helm of any business today, large or small, must love change and be nimble to operate in a state of constant chaos.
Characteristics of a stagnated business
Many businesses can stagnate over time and characteristics can include:
- High levels of bureaucracy
- Low levels of growth
- Slow to respond to changes in customer requirements
- Boring and stale workplace
- Low levels of innovation
- A culture of doing things because that is how they have always been done
Characteristics of a successful business
Organisations if they are to succeed need to be:
- Flat organisational structure
- Faster and more responsive
- Quality focused
- Constant improvements by challenging the norm
- Dynamic and fun work place
- Smaller even if within a bigger organisation
- Add value through people and innovation
So what is the recipe to a successful business operating in a world of chaos?
The recipe for success can be broken into a number of key areas of an organisation which all need to be addressed. These include:
Marketing – focus on differentiation and be innovative. The aim is to be disruptive and segment your market. A classic example of this has been Telstra’s marketing of its newest mobile network, “Next G”. We live in a 3G mobile world with faster mobile data and ever increasing mobile applications, but Telstra has successfully differentiated it’s 3G offering making people believe that it is even better than 3G. This is clever differentiation through marketing. You can do this in your own market by determining what differentiates you from your competitors and focusing on this.
Sales and service –Create an atmosphere of absolute obsession for customer service. Be a ’hero’ with every customer. Listen to your sales people and use them as a source of new products and services. They are in front of potential customers every day, listen to them. Service is a major component of adding value and differentiation. Arguably this is the most important of the key areas. Survey your customers every year and don’t rationalise the results, accept them and see it as an opportunity to improve.
Innovation – Constant improvements driven by a desire to make small and noticeable improvements to the customer experience. Innovation can be in process or product. The key here is “value innovation”, that is, it adds value to the customer and reduces costs for the organisation.
People – People are the backbone of success. They will drive differentiation and innovation. Listen to them and take action. You can never train or involve them too much. Be open and share the financials with them. Give them a financial stake in the outcome of the business every year, for example profit share. Involve them in decision making and you will be surprised at the outcome. Getting the right people in the right seat on the bus is the key rather than just loading a whole lot of people on the bus. Be prepared to pay more for truly great people, it will pay dividends.
Structure – The flatter the better. This will make the business more dynamic and faster to act.
Leadership – If it’s your business or you are a manager of people, start falling in love with change (thrive on chaos), share your value and vision with the business. Be consultative and listen. One of the keys to great leadership relates to point four above; employ great people and get them in the right seat on the bus. They will help you steer the bus in the right direction. The secret to managing people is to create the boundaries for them to operate within and let them do their job. Mistakes will be made but good people will learn from them.
Financial management and control – Every key area of the business should have its own management profit and loss and should be shared and presented by the people to the business every month. Be prepared to share the good with the bad, you will be surprised with the positive response. Also ensure that your management accounts are detailed and allows great reporting and analysis of the key drivers of your business. Too many times I see one line revenue management accounts that tell me nothing about where the business is coming from by product or service. Match the cost of goods sold with the revenue items so you can see real margin by product.
Learn to love change. To master operating a business in a chaotic environment you must be prepared to embrace change and thrive on chaos.