Incumbent companies are notably bad at strategic adaptation and will always find it difficult to respond to the threat posed by insurgents in their industries. Yet sustainable growth often demands the ability to explore and commit to new revenue streams to offset the natural slowing of a mature core business. Leadership’s first priority has to be giving the core business model more room to run by reviving the Founder’s Mentality® and dialing in growth led by the front line. But leadership also has to entertain the notion of throwing out the old model and working on a new one.
These things don’t have to be mutually exclusive—scale insurgents focus on optimization and innovation at the same time. The challenge involves mindsets. Most large companies have to force themselves to adapt their strategy-development process to cope with the chronic turbulence and uncertainty of global markets. This rarely comes naturally to an organization vested in the status quo. Large companies also have to look at the innovation challenge through a new set of lenses. They have to upend an incumbent’s propensity to fight the future and must encourage people to imagine how they can use the company’s biggest assets—scale and accumulated experience—to disrupt markets rather than defend them.