|
Turning conventional wisdom on its head,
a Senior Partner and an Innovation Specialist from McKinsey
& Company debunk the myth that high-octane, built-to-last
companies can continue to excel year after year -- and reveal
the dynamic strategies of discontinuity and creative
destruction these corporations must adopt in order
to maintain excellence and remain competitive.
In striking contrast to such bibles of business
literature as In Search of Excellence and Built
to Last, Richard N. Foster and Sarah Kaplan draw on
research they conducted at McKinsey & Company of more
than one thousand corporations in fifteen industries over
a thirty-six year period. The industries they examined included
old-economy industries like semi-conductors and software.
Using this enormous fact base, Foster and Kaplan show that
even the best-run and most widely admired companies included
in their sample are unable to sustain their market-beating
levels of performance for more than ten to fifteen years.
Foster and Kaplan's long-term studies of corporate birth,
survival, and death in America show that the corporate equivalent
of El Dorado, the golden company that continually outperforms
the market, has never existed. It is a myth.
Corporations operate with management philosophies
based on the assumption of continuity; as a result, in the
long term, they cannot change -- or create value -- at the
pace and scale of the markets. Their control processes,
the very processes that enable them to survive over the
long haul, deaden them to the vital and constant need for
change. Proposing a radical new business paradigm, Foster
and Kaplan argue that redesigning the corporation to change
at the pace and scale of the capital markets rather than
merely operate well will require more than simple adjustments.
They explain how companies like Johnson and Johnson, Enron,
Corning, and GE are overcoming cultural "lock-in"
by transforming rather than incrementally improving
their companies. They are doing this by creating new businesses,
selling off or closing down businesses or divisions whose
growth is slowing down, as well as abandoning outdated,
ingrown structures and rules and adopting new decision-making
processes, control systems, and mental models. Corporations,
they argue, must learn to be as dynamic and responsive as
the market itself if they are to sustain superior returns
and thrive over the long term.
In a book that is sure to shake the business
world to its foundations, Creative Destruction, like
Re-Engineering the Corporation before it, offers
a new paradigm that will change the way we think about business.
Richard Foster is a senior partner and
director at McKinsey & Company and the author of the
bestselling Innovation: The Attacker's Advantage,
named one of the best business books of the year by The
Wall Street Journal. Foster lives in New York City.
Sarah Kaplan worked at McKinsey &
Company for many years, specializing in innovation and technology
management. Kaplan lives in Boston.
|
