49. Tom Peters Thriving on Chaos for Small Business (part 11)
Tom Peters’ book, Thriving on Chaos (1987), which overthrew or updated his thoughts in In Search of Excellence, comes up with 12 keys to success in the new world he saw as emerging in the late eighties, and these are particularly relevant to small business and are still relevant now.
Some of the ideas recently put forward by Seth Godin and Malcolm Gladwell are clearly prefigured here. The 12 concepts are:
- Find – or better create – a niche and differentiate your product – small providers win in the niche scenario rather than the giants. It is easier for them to focus on a small part of the overall market, and they can be more flexible in exploiting it.
- Lots of small increments in product/service yield better results than the long search for the great leap forward – the history of Toyota v the US car giants illustrates this. ‘Imitate nature: meaningful beginnings are almost always unnoticeable’. Sometimes so much effort and time goes into the the great leap forward that it saps the energy and sometimes the market has moved on and away from the new idea by the time it is ready to launch. Incremental change gives you the opportunity to adept to current market conditions. This is particularly true now in a new tougher market place: the product that was ideal six months ago will need to be repositioned or modified now.
- Be extraordinarily responsive – perceived service is a key differentiator – ‘under-promise and over-deliver’. This has been a clarion call since the 80s but how many companies are still failing on this. And small companies which should be the best are often the worst in this area – being to eager to please by making promises and then failing to live up to them.
- Be unique – being middle-of-the-road is a weakness fatal to profit. Seth Godin was essentially regurgitating this when he pushed the core idea of his book, The Purple Cow. It really was not as original as it claimed to be, but still valid for all that.
- Be obsessed with listening, especially to customers. Again in todays economic climate it is dangerous to assume that your customers’ motivation is the same as it was when they were feeling wealthier, more confident and perceived themselves on an economic escalator that only went up. Suddenly the escalator is running down and to get to the top means running and not just going with the flow.
- Cultivate and celebrate ‘service heroes’ – ‘people must become the primary source of added value’. Tough times does not mean that price is everything – people will more than ever rely on people they trust, and businesses that look after their interests.
- Do not seek perfection: the opportunity is in taking advantage of instability. And there will be instability in a number of markets – either because of changing buyer behaviour or financing difficulties. Do your research and your homework, but a good approximation is better than inaction.
- Innovation – including ‘creative swiping’ – requires trial and error. With small scale tests, failures become the building blocks of success. ‘The unpredictability of innovation defeats excessive planning’ (This is not an excuse to discard all planning!).
- Find opinion-formers – they will help develop and spread the word for your product – 90% of the world is influenced by the other 10%. This is very much echoed in Malcolm Galdwell’s The Tipping Point, published in 2000, some 13 years after Thriving on Chaos.
- As George Bernard Shaw said “All progress depends on the unreasonable man”. Sometimes to get things to happen you just have to push unreasonably, whether it is to get over official obstacles, to get staff or suppliers to buy in to your idea, or to persuade clients to buy it.
- Measure what is important, and set conservative financial goals so that (in the case of large business you are seen to achieve targets, and in small) you do not have cash flow problems that threaten business survival. Those that did not follow this advice will be the businesses that suddenly face bankruptcy as financing is no longer easy to obtain. If it is not too late, make sure you follow this advice.
- Have an inspiring vision that enthuses you, and your business stakeholders. It will help keep you going in tough times.
Tom Peters practices what he preaches: his lack of consistency can be attributed to the changing world he describes; if scientific method is not his strong point, his enthusiasm has meant his message has been spread widely. Stimulating and often rewarding stuff: use with caution and enjoy!