Jim Champy Q&A: Turn Chaos Into Opportunity

Last Updated Jun 2, 2008 12:02 PM EDT

"My friend Peter Drucker, the late, great, management thinker, was famous for declaring in the fairly peaceful 1980s: 'Chaos is an opportunity, not a threat'," says business guru Jim Champy in his new book, 'Outsmart!'

Business is more complex and demanding thanks to the credit crunch, but the new business world he outlines offers "a great dynamo of fascinating new practices that can sharpen any company's competitive edge."

I ask him to outline the secrets of fast growth and and which companies face the toughest obstacles when it comes to change.

Is there one trait that marks out the business leaders in the book? An absolute sense of ambition: they all believed they had a truly great idea and they wanted to do something with it.

If the executive team doesn't have the ambition to look for change, nothing's going to happen. Every one of these individuals is exciting. They truly renewed my faith in business.

Can others emulate their success? There's no single prescription about how to take the behaviours out of these companies and get the incumbent companies to adopt them.

I can look at an individual company and make suggestions about how it can change. But the more prescriptive you get, the less widely applicable a business book is.

Having said that, I want to write a chapter in the next book about beginning the change. I'm just not sure about how to complete it!

What are the obstacles to change? Real, fundamental operating change takes anywhere from two to five years in an existing company.

You can start to take things apart and unsettle people in a year, but you don't get it done. It takes a persistent programme. But there still has to be a sense of urgency.

How have these companies handled market volatility? Most of them are privately owned so the leaders can make the decisions. They are inclined to action.

They don't sit around -- nobody told me that they didn't have the budget to do something. They did whatever the business needed at the moment of truth. It's the 'just do it' mentality.

Publicly held companies are at a significant disadvantage -- there's always this big debate about whether it will hurt the earnings.

Many have huge amounts of cash. But the shareholders either want it paid back in dividends or they want the company to buy back stock because I don't think they trust management's ability.

Will the markets change? I don't see what will bring about a change. Look at the way hedge funds work: they short-sell stocks, they bet on the downfall of companies.

Who are the long-term investors today who buy stock and are prepared to hold it?

I am cheered when I see an executive who has the courage to spend, even when the stockholders are doubtful.

Look at Howard Schultz at Starbucks. He sees his market declining and a lot of competition. So he's trying to return the roots of the company and the excellence around brewing coffee. He's re-equipping the stores with new coffee makers. Shareholders are uncomfortable. But I think he'll win.

What's next for you? The next book, 'Engage', is about how companies like Big Green Egg win customers through a viral approach that pre-dates the internet. Then 'Inspire' will look at how people are managed differently. The last of the four, 'Deliver', will be about execution.

There's more from Jim Champy on whether he regrets re-engineering and on discovering the new dynamism that drives the business leaders in 'Outsmart!'