How does Agile cope with chaos?

Does Agile need a business that knows what it needs?

If things are chaotic where does an Agile software development team fit in. How can it help the business meet the expectations of it's clients?

I guess the answer to my first question seems straight forward, what does it matter if you are using an Agile method or not, if a business doesn't know what it needs then how can you ever satisfy it? Maybe you can. If a software development team can take those snippets of requirements that the business has time to give then feedback to the them with ideas and direction maybe it can help shoulder the burden the business finds itself under and do a larger share of the thinking for it.

I think this is possible but I also think it requires a strong, focused team. Without that there is a danger that they get drawn into the chaos and end up thrashing around, never reaching the magical "done".

One way to combat this would be to use a Lean method. At the very least, in a manufacturing environment where I am, terms like kanban are common and the busy guys wouldn't have to invest time learning about and attending iteration planning meetings... yes they are that busy!

But the thing I like about XP/Scrum agile is iterations, they provide a common goal for the team, a time box in which you feel motivated to deliver for the business and your team mates.

Somehow I feel this isn't one that's going to be solved overnight.