The Business Book

220

T

he top-down, hierarchical

organization of businesses

dates back to the industrial

revolution, when management was

all about control. Today’s companies

need a radically different approach.

The first decade of the 21st

century saw many disruptive events

across the world. These, combined

with accelerated technological

developments, the rise of developing

nations, and a changing world

order, make living with uncertainty

a reality for business today. This

means that companies now need

a flatter structure, incorporating

flexibility instead of direct control.

Rather than being overwhelmed by

chaos, chaos can be managed and

even embraced. US politician Tom

Barrett acknowedged the value

of working in an unstable world,

noting that “chaos brings

uneasiness, but it also allows for

creativity and growth.” 

Managing chaos

Scientific chaos theory, which

investigates the patterns in complex

systems such as the weather,

can be related to organizations.

Effective leadership, clear vision,

open communication, and strong

values are necessary to deal with

such complexity. Leaders need to

set clear boundaries, then allow

individuals and teams enough space

to self-organize, self-regulate, and

make their own decisions. Creativity

and growth are enabled because

employees have a higher level of

responsibility and accountability

for their work, as well as a bigger

investment in the outcome.

A company also has to revisit

its strategy continually, with the

focus on delivering increased value

to the customer, to ensure that it

remains relevant in the changing

external environment. A more

flexible company helps to ensure

that staff is involved and can adapt

Chaos theory proposes that complex

systems are highly sensitive to initial

conditions. A butterfly’s flapping wings

in Japan might start a chain of reactions

that leads to a hurricane in the US.

IN CONTEXT

FOCUS

Change and uncertainty

KEY DATES

1992 M. Mitchell Waldrop

writes Complexity, which

explains the theory of the

science of complex systems.

1997 Researcher Shona Brown

says that the edge of chaos

has a structure that allows

companies to be malleable

enough to change but not

fall apart.

1999 In Surfing the Edge of

Chaos, Richard Pascale, Mark

Millemann, and Linda Gioja say

a too-rigid management system

can have nothing original or

innovative emerge from it.

2000 The dot-com bubble

bursts, causing turmoil in

financial markets.

September 2001 The 9/11

terror attacks in the US have

far-reaching financial and

business impacts around

the world.

C H A O S B R I N G S U N E A S I N E S S ,

B U T I T A L S O A L L O W S F O R

C R E A T I V I T Y A N D G R O W T H

COPING WITH CHAOS