sooner or later, your company will probably need to transform itself in response to market shifts, groundbreaking technologies, or disruptive start-ups. Some strategists suggest doing this quickly and aggressively, by making a clean break from the past and turning your firm into something entirely new. In our experience, though, organizations built for legacy markets rarely pull this off. It can take years for an innovative initiative to become large enough to replace the revenue an incumbent has lost to disruption. And if your company completely abandons its old model, it throws away any advantage it still has.
We propose an approach that’s both more practical to implement and more sustainable. It rests on two insights: