European Management]ourr~l Vol. I4, No. I, pp.
98--106, 1996
~ Pergamon
0263-2373(95)00052-6
Chaos, Non-linear
Systems and Day-to-day
Management
NEIL GLASS, Gemini Consulting, Copenhagen
We hear a lot about Chaos and Non-linear Systems
Theory, but nobody has yet provided an accessible
and practical guide as to how these can realistically
be applied in day-to-day management. If anything,
many of the 'experts' have made the whole area
complex and impenetrable for normal people. This
article shows how managers can quickly apply and
get benefits from understanding such concepts as
"attractor points', 'damping and amplifying effects'
and 'self-reinforcing virtuous and vicious spirals'. It
also draws out key insights about setting strategic
direction and encouraging organisational learning in
a chaotic environment. This article makes Chaos
Theory accessible and useful in day-to-clay
management.
98
Copyright © 1996 Elsevier Science Ltd
Printed in Great Britain. All rights reserved
0263-2373/96 $15.00 + 0.130
A new set of theories is heading our way. The concepts
of 'non-linear systems' and 'chaos'. These may turn out
to be very useful to managers. Like all powerful models,
they may have the potential to help us structure and
understand what we have observed or sensed, clearly
express what we have intuitively felt, but not yet put
into words, and develop new insights into the way we
view and manage our organisations.
On the other hand, these concepts may be very
pedantically explained to us, their proponents may have
the arrogance to believe that they have found the one
answer to all organisations' problems and that the new
theories replace, rather than extend, previous thinking,
applying them may involve such a complicated and
impractical application of higher mathematics, that we
reject them as being interesting for academics, but
irrelevant to the real world. A recent leading text on
applying non-linear methods to management, for
example, 'helpfully' informed us that:
'Nondipolar P waves result from the lack of diphasic
oscillation in sales.'
"A paroxysmal escape is the spontaneous emergence of an
oscillation not associated with the normal sinus rhythm.'
'Apparently transitions from sinus rhythms to arrhythmia
can occur as a slow, or chronic, transition.'
While claiming of the book:
'Here is an explanation of how chaos theory can be made
practical for managers in boardrooms, marketing departments
and production.'
This may give some idea of the enormous gulf separat-
ing those who claim to know about these concepts and
those who are expected to apply them in the jungle of
organisational life. Nevertheless, there are some key
European ManagementJournalVo114No I February 1996
 CHAOS, NON-LINEAR SYSTEMS AND DAY-TO-DAY MANAGEMENT

messages for managers, to be taken from non-linear

systems and chaos theory, and some very powerful
techniques for improving organisational performance.
Top i..~~~G~,~
Management

Why Do We Need These Theories? Middle t

M o v i n g from a Linear to a Non-linear W o r l d
Most people will accept that organisations' environ-
ments, whether competitive or regulatory, have become
more complex and more prone to sudden unexpected
changes. This looks like being an accelerating, rather
than passing phenomenon - in short, it is going to get
worse.
In a reasonably stable environment, we can run our
organisations in the traditional hierarchical, mechanistic
way. Top executives (aided by their consultants and
corporate planners) set strategy, middle management
carry it out, and very detailed control and reporting
systems pass thousands of numbers back up the
hierarchy to inform those responsible of progress. This
process is shown in Figure 1.
Unfortunately this model does not seem to work very
well any more, because it is based on three assumptions,
which are no longer wholly valid:
Assumption I - the organisation is almost a simple
'closed system'. Generally what it decides to do,
will take place without too much disruption from
outside events.
Assumption 2 - the operating environment is stable
enough for management to understand it
sufficiently well to develop a relevant detailed
strategy and for that strategy still to be relevant by
the time it comes to be implemented.
Assumption 3 - in an organisation, or an economy,
Management
Supervisors
Figure I Classioal Orgenisations Set Strategy,
Communioato Targets Down and Then Measure
Results
there are a series of clear levers you can apply to
cause a known response (e.g. if you cut staff
numbers, profitability should go up or if you
increase interest rates, the value of your currency
will rise).
These three assumptions have been replaced by three
new realities:
Reality I - organisations are complex 'open
systems', constantly deeply influenced by and
influencing their environments. Often, intended
actions will be diverted off-course by external
events or even by the intemal political or cultural
processes of the organisation itself.
Reality 2 - the environment is changing so rapidly
(continuously throwing up new opportunities and
threats) that top management cannot expect to
have sufficient sense of what is happening to
formulate very detailed strategies. Moreover, by
the time a strategy moves from concept to being
operationalised, key aspects of the environment
have often changed.
Reality 3 - the simple linear models of cause and

Intended Outcome Actual Outcome

3 Unemployment and social

costs rise and the
~ productivecapacity of t h e ~
1 Raise interest country declines
rates 4 In the longer term, increased
2 Increased cost of unemployment reduces overall spending
borrowing puts and leads to even more unemployment
companies in difficulty j
out of business ,IP
//
~ 1 Raise interest J /
rates to lift / /
2 Value of the value of /
currency rises currency / /
5 Overall productive capacity reduced J B "
further and value of currency falls.
Need to raise interest rates further to
lift value of the currency

Figure Z In More Compiox, Non-Ilnoar S y a t o m ~ AoUons oan give Outoomea~ Whioh are Unexpootod and
Oppoadto to Thoeo Intondod

European ManagementJournaIVo114 No 1 February 1996 99

CHAOS, NON-LINEAR SYSTEMS AND DAY-TO-DAY MANAGEMENT

Expected Outcome Actual Outcome

By taking the division The new owner makes a

Using your BCG matrix
you sell off a division
you classed as a dog
fortune and is delighted.
off your hands, the
new owner gets it Everyone wonders how
you could have given away
cheap
such a gem

'1'
By applying some
Everyone is satisfied It's in a so-called 'mature
industry' so none of the simple new technology
that you've got rid of a (electronics) the new
liability and your competitors are very
active owner relaunches the
reputation is enhanced business

Figure 3 Many 'Logical' Strategic Decisions turn out to be Wrong due to Changes in the Environment

effect have broken down and many actions can lead interest rates, have shown that applying this simple
to quite unexpected (positive or negative) interest rate lever is no longer effective.
consequences.

Some examples of this new situation (in economics and
in management) will hopefully show how important it is
for us to understand the implications.
In economics, for example, using simple mechanistic
models, like raising interest rates to boost the value of a
currency, completely underestimate many of the forces
at work. Too often, the result is the opposite of that
intended (see Figure 2).
The inexorable rise in the value of the Yen, in spite of
Japan's low interest rates, and the equally inexorable fall
in Sterling, in spite of the UK's comparatively high
In forming company strategy, similarly, the simplistic
use of traditional models can lead to apparently logical
(but, in hindsight, apparently incompetent) decisions.
Figure 3 shows how, in the face of rapid technological
and market changes, an apparently rational decision to
sell off a division classed as a 'dog' can go horribly
wrong.
And in operations management supposedly straight-
forward actions (like cutting personnel numbers to
improve profitability) can sometimes, almost perversely,
seem to explode in your face as shown in Figure 4.

Expected Outcome Actual Outcome

4 Internal
focus " ~

1 Cut staff
f
3 Political
5 Declining
costs infighting customer service

2 Pe~ople try to
protect departments 6 Loss in sales

2 Profitability
increases
an,,%.. 'coC's'
7 Need for more
cost-cutting

Figure 4 The Unexpected Vicious Spiral some Cost-cutting Programmes initiate

100 European Management Journal Vo114 No 1 February 1996

 CHAOS, NON-LINEAR SYSTEMS AND DAY-TO-DAY MANAGEMENT
Chaos and Non-linear Systems - Some
Definitions
Chaos
The popular understanding of chaos is a state of
complete disorder. The scientific definition is quite
different. Scientists distinguish between three states:
Stable Equilibrium - where the elements are always in, or
quickly return to, a state of balance. The temperature in a
room controlled by thermostat could be said to be in Stable
Equilibrium - whatever changes there are affecting the room,
the thermostat will always return the temperature to a pre-set
level. For many years car and soap powder markets were near
to stable equilibrium. Of course one company could improve
its product and another could launch a huge advertising
campaign. But, in general, when the dust settled, market
shares between the main competitors tended not to change that
much.
Bounded Instability (or chaos) - a mixture of order and
disorder. There are many unpredictable events and changes,
but the basic patterns of a system's behaviour can be detected.
Over the last 20 years many car markets have been in chaos.
Sudden shocks like oil price changes, shifts in consumer tastes,
pressure from environmentalists, aggressive new competitors
and government policies have thrown many forecasts way off
course, but general trends can be detected and exploited by
faster-moving firms.
F.xplosive Instability - there is no order or pattern. Perhaps
many of the events during the Second World War are
examples of this.
The contention of chaoticians (remember, there was one
in Jurassic Park) is that many organisations used to
operate in something approaching Stable Equilibrium
and are now finding themselves in bounded instability or
chaos. Denationalised airlines and banks or many
manufacturing industries are probably good examples
- the former suddenly having to compete to retain
customers, the latter finding the competitive situation
increasingly harsh and all of them subject to rapid
technological change, which, if applied effectively, can
unexpectedly propel a competitor from being an also-ran
into a seemingly unbeatable lead.
If it is the case that organisations have moved from
stable equilibrium to chaos, then this has profound
implications for how they are managed. But, before
going on to that, just one more definition.
Linear vs Non-linearSystems
A linear system is like the thermostat mentioned above.
An action will cause a directly predictable reaction: light
a fire in the room and the thermostat will hma the
heating down - open a window to let cold air in and the
thermostat will rum the heating up. An example of a
non-linear system could be a major TV advertising
EuropeanManagementJournalVo114No 1 February 1996
6 Profits rise - - more
money to invest in
training and new
equipment
/ 1 Profits
~ declining~
) / 2 Invest in
training and
5 Sales rise and new
new products are equipment
developed
3 People
encouraged to
4 Customer contribute to
service improving
improves ~ performance
Figure 5 O r g a n i s a t i o n s oan also C r e a t e t h e i r O w n
V i r t u o u s Spirals
campaign. Launching your campaign, you hope for linear
system results - you spend £10 million and you plan to
gain three market share points. That's clear linear
thinking and sometimes things may rum out as you
had expected.
In reality, of course there are a whole series of other
possible outcomes, which you may not have planned for
- a competitor may fight back and outspend you, or
they may beat you for much less money with a more
creative campaign, or they may offer a special '2 for the
price of 1' promotion and satisfy market demand, leaving
you with reduced sales and a big hole in your bank
balance. Or a competitor may be aggressive and just go
for a low cost response like spreading bad publicity
about the quality or safety of your product (as with a
recent new soap powder launch), or there may be a spell
of good weather, so far fewer people watch TV, or
whatever.
Figures 2, 3 and 4 are examples of people taking actions
in what they thought were linear systems, but which, in
fact, turned out to be non-linear, giving quite different
results from those expected. Finally, just to show that
not all non-linear results need to be negative, we could
take an example of a company that reacts to dedining
profits, not by firing a whole lot of people which is what
most organisations do, but by acting in an 'illogical' way
and increasing (rather than reducing) expenditure (see
Figure 5).
Implications for Management
If we accept the concept of chaos, then there are a
number of important implications for the way we
manage our organisations and employees.
I0I
CHAOS, NON-LINEAR SYSTEMS A N D DAY-TO-DAY M A N A G E M E N T
Moving from 'Damping' to 'Amplifying'
Actions
In linear systems, you primarily use 'negative' or
'damping' feedback to bring the system back into
equilibrium. Here your belief is that there is a state of
equilibrium (unemployment being around 7 per cent or
your firm controUing 30 per cent of the market or return
on investment being 14 per cent, for example) and that it
is desirable to always try to return to this state. Your
state of mind is 'what actions can we take to return to
the desired equilibrium?'
In non-linear systems, you have what is called 'positive
amplifying' feedback. As the world is seen as inherently
unstable, very small actions can be amplified to have
major consequences. Nobody could have guessed that
by simply changing its focus from large to small bikes,
Honda, a small virtually unknown Japanese manufac-
turer, would swamp the US market.
Sudden shifts in technology, taste or regulations, and
there have been many in recent years, can hugely
amplify small actions - Apple and Microsoft's incredible
growth were a result of breakthroughs in technology
matching an untapped market need and being brilliantly
exploited.
A manager's ways of thinking and acting are quite
different if they see the world as being in something near
stable equilibrium, than if they believe they are operating
in chaos (see Figure 6).
In stable equilibrium, the manager is constantly trying to
bring a situation back to a pre-planned state - in chaos,
managers have goals, but are also looking for the kind of
positive amplification, which can give extraordinary,
rather than just ordinary, results.
Creating your own Self-reinforcing Positive
Spirals
Linked closely to this idea of positive amplification, is
the concept of self-reinforcing spirals.
Working in Stable
Results Equilibrium
Plan
Time
Traditional seeking to
re-establish equilibrium
Figure 6 Comparing | Stable B4uillbrlum with | Chaos Mlndset
I02
Often it seems that some organisations can do nothing
wrong. Japanese carmakers, for example - if you allow
access to a market, they will compete on better quality
and features for a lower price. Yet if you restrict access,
they can use the fact that demand outstrips supply to
raise prices and extract higher profits. However, there
are other organisations that seem to try every trick
under the sun, yet nothing can slow down their
relentless decline. The continuing de-industrialisation of
the British economy, in spite of scores of govemment
initiatives to boost industry, investment and training,
might be an example of this.
In stable equilibrium, actions tend to have very clear
outcomes. You increase advertising spend, and sales will
increase, you add an extra shift and production volume
wiU go up. However, in chaos, actions tend to have
expected and also unexpected (both positive and
negative) outcomes because changes or complex
interactions of factors amplify consequences. Very
quickly, small actions can launch you into vicious or
virtuous spirals with unforeseen consequences.
You launch an advertising campaign to gain some
market share. A competitor takes fright and re-examines
their relations with their advertising agency. They realise
that, having been with the agency ten years, they are no
longer a 'glamour' account for the creative department
and so are getting poor service from junior staff and an
unsatisfactory campaign quality. They move their
account to a new agency. Anxious to make its mark,
the new agency puts its best people on the account.
They come up with a great campaign and you get
slaughtered in the market.
All you were trying to do was grab a few points of
market share to satisfy your newly appointed boss, who
wanted to make his mark. But you end up pushing your
main competitor into a more aggressive mode, which
results in them taking from you the extra market share,
you had hoped to steal from them.
Using the format of Figures 2 and 4, we can show how
this vicious spiral quickly develops as shown in Figure 7.
Adapting to Chaos
Results
Amplifying positive feedback by
seizing unexpected opportunities
European ManagementJournalVo114No 1 February 1996
 CHAOS, NON-LINEAR SYSTEMS AND DAY-TO-DAY M A N A G E M E N T
Intended Outcome
1 Increase
advertising spend
2 Competitor reviews
account and changes
ad agency
2 Gain a few extra points
in market share so your
new boss can prove he
has made his mark
F i g u r e 7 in M o r e C o m p l e x , N o n - l i n e a r S y s t e m s , Aotione oan give O u t o o m e e w h i c h a r e U n e x p o o t e d e n d oan
b e O p p o s i t e to t h o s e I n t e n d e d
And, of course, once your competitor gains that extra
market share, they can attract better people, achieve
higher profitability by putting more volume through
their factories and can use their improved position to
increase their bargaining power with customers and
suppliers. This gives them more to spend on advertising,
strengthening their market position, improving their
profitability further and so on. Your competitor is now
on a self-reinforcing positive spiral. It's going to be
awfully difficult for you to catch them up, unless you can
find a positive self-reinforcing cycle of your own.
Once you start to understand that chaos can so easily
lead to self-reinforcing positive or negative spirals you
are no longer prepared to cede small temporary
advantages to competitors, because you understand
how quickly these can be tumed into self-reinforcing
positive spirals for your competitor and negative self-
reinforcing spirals for you. You are always on the look
out for small advantages, however insignificant they
may appear at the time, because you realise that these
can often be quickly amplified into a self-reinforcing
positive spiral for you.
Using 'Attractor' Points
While a stable equilibrium mindset has a tendency to see
developments in terms of regular trends, chaos thinking
views developments as lurching from one temporary
state of semi-stability to the next. For example,
equilibrium thinking might believe a market will grow
by 3-5 per cent a year (see Figure 8a). The chaos view
might be that, although it grows by 3-5 per cent a year
averaged out over the long term, the actual growth will
come in fits and starts (see Figure 8b) with periods of
rapid growth and then plateaux. These temporary
plateaux are called 'attractor points', because for a
period a system's behaviour seems attracted to their
level.
EuropeanManagementJournalVo114No 1 February 1996
Actual Outcome
3 Competitor's new
campaign a success.
They gain image as
most dynamic firm
in the market
4 Competitor attracts media
interest, better employees and
higher status with customers
~ 1 You
increase
advertising I
spend
5 Market moves to new
position, where
competitor has gone
from 15 to 30% share,
mostly at your expense
Many attractor points are obvious - if a firm brings a
new factory on stream, available volume rises to a new
level and pressure to lower prices increases or if
consumer taste shifts towards large family transporters
or small city cars, then demand for cars may increase for
a while to a new level as people move over to the new
fashion.
However, too often managers act as if these attractor
points or plateaux did not exist, for example, a car
maker, seeing the growth in large family transporters,
entered the market five years after a competitor on the
assumption that the rapid rate of growth would
continue. What actually happened was that sales levelled
off at a new attractor point and the late entrant
significantly overestimated market demand.
For most FMCG companies, their customer base has
shrunk from several thousand retail customers taking
70-80 per cent of their volume to about 10 customers
now accounting for 70-80 per cent of volume. Treat one
of those customers badly and be downgraded as a
supplier or even delisted and you don't just temporarily
lose a couple of per cent sales. You move to a new and
much lower attractor point, you give away a heaven-
sent opportunity to a competitor and it's incredibly
difficult to rise back again to the previous attractor point.
As markets grow, they do not just add consumers
regularly as in figure 8a. Instead, they add new consumer
segments with different needs and tastes (Figure 8b).
And as each new segment joins, the sales level rises to
the next attractor point. So if you are slow in keeping up
with a market's development, you do not just miss a few
thousand consumers, you may miss a whole new
segment and fall irreparably behind
In chaos, organisations can quickly slip down to or rise
up to new attractor points. There is often more at stake
with each management move or oversight than most
1-03
CHAOS, NON-LINEAR SYSTEMS A N D DAY-TO-DAY M A N A G E M E N T
Market size
(a) w (b)
Time
Figure 8e Equilibrium View
organisations realise. If managers really understood and
internalised the potential negative results of inaction -
allowing service levels to slip, allowing burned-out
executives to while away their time to retirement in key
positions, running a boring advertising campaign too
long because of the cost and political implications of
withdrawing it or adopting a 'wait and see' attitude with
a new technology application in their market, they
would not be so laid back about their own or their
organisation's slowness to act.
Building S t r a t e g y - f r o m 'Detailed P l a n n i n g '
to 'Strategic I n t e n t '
If we believe that the environment is not inherently
stable, then we know that our industry will be regularly
shaken by a series of, to some extent unpredictable,
shocks. So it is pointless for executives to lay out an
extremely detailed, top down five year strategy. The
likelihood is that we will be thrown way off course long
before we have implemented our great plan. Moreover,
the people who are going to have to identify and cope
with the unpredictable shocks are not only executives,
but mainly those closest to customers, technology
developments and the market. If these people are
hemmed in by a very detailed strategic plan, they are
going to be unable to respond effectively.
So the development of strategy needs to move from a
model, where you produce very detailed planning to a
more flexible approach based on setting a fairly clear
direction, then continuously adapting the detail to cope
with specific events, threats and opportunities. We must
move from a strategic planning mentality to the concept
of strategic direction or strategic intent. For example,
Komatsu set a Strategic Intent to 'Surround Caterpillar'.
Over the years they used many different methods - low
prices, Total Quality, JIT, exploiting unexpected market
opportunities and responding rapidly to any moves by
Caterpillar. There was no very detailed strategic plan,
but everybody in the company knew and shared the one
overarching goal.
104
Market size
Market growth
4..-.-.- ~" 5
ctor' points
2
Time
Figure 8b Chaos View
Honda wanted to make inroads into the export market
for large motor bikes. They tried Southeast Asia and
failed. They tried the US and were having little success
till some customers expressed interest in the small
'Supercub' motorcycles, the Honda staff used for their
errands. Honda had not tried to market these in the US
as 'they seemed wholly unsuitable for the US market
where everything was bigger and more luxurious'.
Honda quickly responded to this interest, changed focus
from large to small bikes and within five years
dominated the US market. While other companies would
probably have given up or fought an uphill struggle with
their original strategy to sell large bikes, Honda had built
an organisation that could quickly identify and adapt to
new opportunities within a general shared goal.
Strategic success here derived, not from detailed
strategy, but from a statement of clear and ambitious
goals and from creating a cohesive, entrepreneurial and
learning culture, enabling people to seize the
opportunities to achieve those goals.
Encouraging Organisational Learning-
'Single' to 'Double' Loop
The Honda example above illustrates another key
implication of operating in chaos - the need for
management to create an organisation that is capable
of learning, so it can, like Honda, adapt to new
situations. It is generally thought that there are two
types of learning - 'single' and 'double' loop.
Single loop leaming is when you meet a situation with a
straightforward reaction. Whenever you have peak sales,
you increase overtime for your employees or whenever
market share falls below a certain level, you increase
promotional spend or when a supplier delivers poor
quality, you increase the level of control on their
deliveries or simply retum them and demand a credit.
Double loop leaming means reacting, but at the same
time questioning the assumptions behind your reaction.
EuropeanManagementJournalVol 14 No 1 February 1996
 CHAOS, NON-LINEAR SYSTEMS AND DAY-TO-DAY MANAGF_.MENT
For example, instead of just meeting sales peaks with
expensive overtime, you try to understand the reasons
for 'those peaks and you look for ways of smoothing
them out (working with customers or building stock of
base range items). Some firms even find that it is their
own policies of regular yearly price rises or end of year
rush to meet budget by pushing stock into customers,
which actually cause these disruptive and costly demand
peaks. By analysing the reasons behind events you can
deal with the events themselves and not just react to
their consequences. Or, instead of increasing inspections
on your problem supplier, you would set up meetings
with engineers from both your organisations to see
whether you could jointly solve the problem and maybe
even come up with a better way of making or using the
problem parts.
With single loop learning you would probably just
continue passing on the cost of the peak work overtime
to your customers till one day a competitor offers them a
better price, or you would keep with that unreliable
supplier till one day they caused you a major quality
problem and in exasperation you went through the
expensive process of switching to another. With double
loop leaming, you would have gone deeper to
understand and deal with the causes of the problems
and also look for new and better ways of working.
Building Balanced Measurement Systems
Stable equilibrium is the perfect environment for good,
old-fashioned, voluminous management reporting
systems. When you know exactly which actions will
lead to which results, then it is worth analysing in detail
the detailed weekly or daily sales trend in every single
type of customer segment and geographic area you
cover. Find a variance from plan and you can take action
to correct it. And now, thanks to the wonders of
information technology, all the data, you could ever
want, can be provided instantly in any combination of
market, product, price group, pack size etc to incredible
levels of detail. One great selling point of a new computer
system to executives in multi-national companies was
that it would give them access to extraordinary amounts
of information, at the touch of a button, from any or all of
the countries where they operated.
Of course, much of this so-called information is useless.
Do the top executives of a European company really
need to know how well a certain pack size is selling in a
small region of a minor country? Or should their minds
be focused on slightly larger issues? Receiving vast
quantities of data is a great emotional security blanket,
but is it actually helping you, or just drowning you in
unnecessary detail7 Maybe we need better, rather than
more, measures.
European ManagementJournalVo114 No 1 February 1996
If we believe that organisations are moving towards
operating in environments which resemble chaos more
than stability, then there are two main types of activity
the organisation must be good at and therefore two
main features our reporting systems should measure:
current operations - are we efficiently making,
delivering, serving or whatever our core activity is?;
strategic direction - are we developing our people,
customers and suppliers so that when half-expected or
unexpected threats or opportunities arise, we are aware
of them and able to react to them?
This dual nature of the information we require has led
to concepts such as 'lag and lead indicators', the
'executive dashboard' and the 'balanced scorecard'.
These are ways of trying to move away from the
obsession of most measurement systems with purely
quantifying past financial performance and to also focus
on ensuring we are building the capability to succeed in
the future.
As the faltering performance of many once great
companies has shown, in stable equilibrium, past
financial results may well have been a good guide to
future performance. In chaos (or bounded instability)
they can often be a very poor indication as to how a
company will prosper in, even the very near, future.
Conclusion - The W a y Forward
Most managers are having to work in conditions which
have some, if not all of the attributes of chaos - virtuous
and vicious spirals instead of stability, sudden shifts to
new attractor points instead of gradual evolution,
amplified effects of apparently small incidents,
unexpected outcomes from seemingly straightforward
actions.
Chaos, with its frequent sudden shifts and lurches, is
constantly creating new opportunities and threats. These
can allow seemingly small, powerless competitors to
quickly dominate a market and cause apparently
invincible incumbents to suddenly start stumbling
helplessly from one disaster to another.
Too many organisations have not understood the
dynamics at work and are repeatedly caught out by
events. However, once managers have grasped the basic
logic behind events, it is less difficult to anticipate and
benefit from the new chaotic environment. By moving
towards double loop learning, working to reach new
attractor points and trying to create our own self-
reinforcing virtuous spirals, we can achieve the kind of
results which would be considered impossible in a more
stable environment.
I05
CHAOS, NON-LINEARSYSTEMSAND DAY-TO-DAYMANAGEMENT

NEIL GLASS, Rudolph

Berghs Gade 62, 2100
Copenhagen, Denmark

The author studied

Modem Languages at
Cambridge and has an
MBA from Warwick
Business School. After
four years in advertising
and marketing, he moved
into management
consultancy. He currently works with Gemini
Consulting, designing and launching major
performance improvement programmes for
organisations throughout Europe. He has written four
books on managemenL two serious and two, which
take a more light-hearted look at working in
organisations. His next book Mastering the New
Realities of Management will be published in
March 1996.

I06 European ManagementJournalVo114 No 1 February 1996