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Once the recession ends, things aren't likely to calm down.
We can expect turbulence to continue.

According to Philip Kotler, named the First Leader in Marketing Thought by the American Marketing Association, it seems that we will need to learn to live with heightened turbulence.Companies will need to employ a Chaotics Management System to anticipate and respond faster to turbulent conditions.

The innovative Chaotics Management System is described in Kotler's book Chaotics (AMACOM), coauthored with John A. Caslione, founder, president, and CEO of GCS Business Capital LLC. MWorld spoke with Kotler, one of the world's foremost experts on the strategic practice of marketing.

Kotler said, "Turbulence is the new normality, punctuated by periodic and intermittent spurts of prosperity and downturns--including extended downturns. We're going to experience this in every country and in every industry and in most companies. There will be points of unexpected change creating both threats and opportunities.
As for the current crisis, Kotler continued, "It is a mix of recession and other factors that will haunt us even after the recession is over." Kotler and coauthor Caslione refer to this time as "The Age of Turbulence."

THE AGE OF TURBULENCE

Turbulence will test the ability of companies to construct an early warning system to enable it to identify opportunities they can exploit and vulnerabilities that they can minimize or eliminate. The warning system entails monitoring competitors' behaviors, suppliers' actions and supply costs, changes in distribution, new technologies, new legislation and regulations, and social changes. By monitoring weak signals portending significant changes in the company's marketplace environment, the company is in a better position to prepare and act.

In addition to an early warning system, Kotler advises companies to improve their planning by adding scenario planning. The future is so uncertain that one cannot even put probabilities on any specific future. Kotler advises that the company prepares some alternative scenarios, at least one incorporating the worst that might happen and another the best that might happen. The exercise of thinking through how the company would respond to each scenario will open managements' mind to the limitations of their current model for doing business. Thinking about alternative futures will lead to new protective measures as well as innovative ideas for running the business better.

One of the benefits of scenario planning is that it tests whether a company's current strategy makes sense. A company must be aware when it hits a "strategic inflection point," a point where its strategy is no longer effective. If the company doesn't change its strategy, it is doomed.
General Motors is a perfect example of a company that didn't know that it had hit a strategic inflection point 15 years earlier. GM didn't take sufficient notice of the superior quality Japanese cars, the innovative production methods used by the Japanese such as quality circles and zerodefect philosophy, as well as GM's higher labor and health costs; instead, GM continued to produce very similar cars not noted for anything special. Had GM taken steps much earlier to redesign its business strategy, the current calamity would not have happened.

Another component of the Chaotics Management System is flexible budgeting. Kotler wants every company department to know in advance what budget items it would cut if a recession hit and, conversely, what additional budget it would ask for if prosperity grew. The idea that every activity in the department is equally important and that nothing can be cut is absurd.
Kotler likes to remind business of the opportunities that are created by adverse conditions. He quotes the Dalai Lama, "Easy times are the enemy; they put us to sleep. Adversity is our friend. It wakes us up." Mike Duke, CEO of Wal-Mart, observed that "turmoil brings us new opportunities."

For the kind of resiliency that future turbulence will demand, Kotler believes that both management and marketing systems need to be designed for responsiveness, robustness, and resiliency. In particular, he said, they need to:
1. Be responsible, able to quickly react to external stimuli

2. Be able to withstand stresses, pressures, or changes in procedure or circumstance; to cope well with variations in operating environments with minimal damage or alteration
3. Be resilient, able to rebound

The aim is to attain long-term Business Enterprise Sustainability through a process by which companies overall and their key departments are able to act quickly and decisively in the face of unexpected turbulence. The installation of a Chaotics Management System promises to deliver this.