Is Chaos a business strategy — Transcript
[00:00:00.02] Jim: - Yeah, all right, go ahead.
[00:00:01.82] Ken: - So we’re going to talk a little about, the question is, is chaos a business strategy? And we’ve found, I mean, you see it all over the place. You know, Steve Jobs created a ton of chaos in his organization, and some people absolutely thrive. in that. You know, the Johnny Ives and obviously the Tim Cooks. We, when, Jim, when we, you first joined us, we had an individual working with us who was convinced that everything would be better if we just fired everybody and kind of started over from the ground up. from the ground up and there’s, there’s, we had employees who were truly change chasers. They were dissatisfied with any of the status quo and always wanted to see change happen all the time, and that kind of became a business strategy that But I have seen some people use. I don’t think it was particularly productive in our experiments with it, and we found that there were, you know, you’d reach the point of having, you could do one or two big things a year, but not new things. Before we started recording, you were reminding me of a story of this individual. or six or eight employees in the company. I’ll let you carry that forward and then we can start talking about if chaos is a business strategy, if it works or not.
[00:01:44.88] Jim: - Yeah, you’re exactly right, Ken. We were at a low point in our size. I say low point. in terms of numbers. Great, you know, great people and I think business was doing just fine. So, six or eight people and he rolls in with this matrix and consultants love matrices, matrices, whatever you want to say, and I’ll never forget it was something like this. I wish I still… had like six lines of business and if I remember correctly eight different client categories so you have basically an eight by six matrix and a ton of detail in every box there so we’re talking 48 boxes with a ton of detail about what the the business would be, and I’m looking around thinking, “We’re six or eight people here. Let’s talk one line of business and maybe a couple of different client categories.”
[00:02:54.54] Ken: Well, the thing is, they were all great ideas, just there was no way possible. Even at, you know, 500 people that we were ever going to get there, it was like, you know, book publishing, because, you know, we deal with information management and books are, you know, information and, you know, all those sorts of things, and, yeah, and, and the look on people’s faces. of told the whole story, which was, “My God, what did I get myself into?” kind of thing, and I think there’s a brilliant guy, and again, those were absolutely brilliant lines of business, well thought out, any one of which would have been extremely helpful, and it was extremely difficult to to implement, not impossible, but extremely, you know, but it was a brilliant kind of big strategic vision for the day we became a 50000 person firm and I’m not, you know, I’m not. long-term vision in any way, but you have to be careful about how much chaos you introduce to an organization, and that introduced a lot of chaos, in part because of the people that we had working for us. We sold them on a vision of what we did and who we were, and they liked that. When you expand that, you have to do it very carefully. When you introduce any chaos into a business, I think, you know, you have to do it very carefully, and I may be conflating the word chaos with change here, but I think in a lot of cases in the name of progress, sometimes entrepreneurs introduce chaos business thinking it’s an important change and you know there’s a fine line between changes that need to be made and in chaos. To me it kind of relates to the size of the business. When I was a single shingle person you know just a sole person in a business I could be as chaotic as I wanted and follow my you know, follow my brain because I didn’t have to communicate that with somebody else. I didn’t have to clearly articulate the vision so somebody else could understand it. But the minute it became, we became two people and then four and six and even at this early stage eight, introducing care. chaos, particularly major changes to a business, just became counterproductive. Some chaos spurred creativity, but too much just brought things to a standstill, was kind of my observation about all this.
[00:05:54.33] Jim: - Yeah, I couldn’t agree more, Ed. It’s an interesting paradox in that we were brought in often to introduce change.
[00:06:12.37] Ken: Which our clients probably viewed as chaos.
[00:06:14.71] Jim: Yeah, as chaos, and yet at home we recognize that be very careful with it. it. I’m not saying we were we were reckless about it because we I think we challenged our clients as well on the amount of change that they wanted to introduce and it resonates with me your statement about one or two big changes a year that that’s really all a business can manage and keep everyone on board without losing people along the way.
[00:06:52.48] Ken: Yeah, it’s been interesting watching some businesses lately fire a lot of people with the intention of using AI to replace them. To me, that’s introducing a major chaos into a business. probably to the point threatening the existence of the business in some cases. I think, you know, if you can assume that, I’m not saying AI doesn’t have a role in businesses in the future, but I think the adoption of it or assumption that it’s gonna be able to replace people has been a lot of chaos. it falls out from a business perspective for some of these people who are, you know, firing. Google’s an example of this where I just read they are offering incentives to retire for or incentives to leave the company for a lot of their search team because they believe that the future of search is this or the AI search. which is the large language models and things like that. I’m not a visionary in that regard, but it seems to be introducing a lot of chaos into the business. Some chaos is good, but I’m not sure how much.
[00:08:09.06] Jim: - Yeah, you can find, yeah, I agree. There’s huge chaos right now involved with the factors that you’re talking about, and for the first time in many years, you can find all sorts of articles that are saying the so-called STEM industries and STEM knowledge, the science, technology, engineering.
[00:08:37.65] Ken: - In mathematics.
[00:08:38.98] Jim: - Mathematics, the need for those is way off. There’s simply too many people for what’s needed at this point. But it’s a long-term thing. It’ll be a while before we know what’s actually gonna happen.
[00:08:57.79] Ken: - Yeah, kind of my summary of this whole story. story is, you know, you can, I guess if I were to summarize this conversation, it’s, you know, you can make changes, you can introduce changes to a business. The degree you can do that or the amount of chaos you can introduce is kind of inversely proportional to the number of people in the business. At eight people, we could have introduced three or four changes, three or four modest changes, not major line or changing the business in a major way. But that’s kind of it, expect chaos, expect it’ll happen, but I’m not sure it’s a strategy to make your business successful or grow.
[00:09:45.28] Jim: Would it be, do you have an example you want to go through of one of the changes we had?
[00:09:51.17] Ken: Oh, that we implemented? So when we were small, as an example, it was relatively easy to introduce big changes. So. So I’m thinking of things like that required something of every individual in the organization that wasn’t a trivial or a procedural thing. An example that that’s coming to mind is continuing professional education at our retreats we’d have, we’d have staff present, and I forget how we did the selection. and it wasn’t the same at every retreat, but that was a big deal when we introduced it for some people who just were saying, you know, “I don’t want to present. I, you know, I don’t know how to do this,” and we made them do it. That created a chaos for them. As we got bigger and that no longer became practical that every staff member could present at every retreat. the changes that we could institute became, I don’t want to say trivial, but they were smaller changes. So an example would be putting in a different kind of automated time sheets. You know, that was a major change, even though it made things easier. and made life simpler, it was hard for people, and as we continued to grow, our expense account is another example where we automated the expense reporting and it was much simpler for people, but it was hard for them. Those things started to tear apart the business, changing major lines of business. We had people who always wanted to change. I remember one of our off-site meetings with staff, we all took that, and I think this is a load of garbage, but the Minnesota Multiphasic Personality Inventory, which rates you on a number of factors, and one of them was your willingness to accept change, and I was a little surprised that most of the people were not high on the I want change list. There were a few of us who were, and we turned out to be the ones that were probably creating the most chaos for the business, and once I recognized that I was one of those people, it was like, ooh, I got to slow down. Let’s just take it easy and be a little more conservative with it. how we approach business. Kind of went a little bit of field there on your, on answering your
[00:12:28.32] Jim: Question. No, no, I think that was a great example because I wasn’t looking for things that most people think of as really big. It’s, you know, changing the way that you file for expenses and report your time. Yeah. To me, it doesn’t register. is a huge change, but it was.
[00:12:47.94] Ken: - It was for people, yeah, and I don’t think it would have been if we were eight people changing the way you do the reporting probably wouldn’t have been a big deal for eight people, but for whatever it was, 60 or 70 at that time, it was. It was a big deal for them and big deal for us trying to figure out how to communicate to everybody. and maybe communication is the problem here, but I still don’t believe chaos as a business strategy is or introducing change and particularly chaotic change, major changes is not a viable business strategy.
[00:13:22.55] Jim: - Yep.