Naina.co
  • Blog
    • Everything
    • Only Articles & Writing
    • #NAINAxStyle
    • Podcast : The Naina Redhu Experience
    • EyesFor…
      • #EyesForLuxury
      • #EyesForLifestyle
      • #EyesForDestinations
        • #EyesForIndia
        • #EyesForDubai
        • #EyesForEurope
        • #EyesForLA
        • #EyesForLondon
        • #EyesForNewYork
      • #EyesForPeople
      • #EyesForStreetStyle
      • #EyesForDining
      • #EyesForTechnology
      • #EyesForFashion
        • New York Fashion Week
        • Amazon India Fashion Week AW15
      • #EyesForBeauty
      • #EyesForPeople
    • Art
    • #MadeInIndia
    • #NAINAxADOBE
    • #NosedByNaina
  • Photography Portfolio
  • Contact & About
  • Press
  • Clients
  • Newsletter

NAINA.CO

Instagram
Twitter
YouTube
Pinterest
LinkedIn
Spotify
Facebook
online brand building, photography & art
Naina.co
  • Blog
    • Everything
    • Only Articles & Writing
    • #NAINAxStyle
    • Podcast : The Naina Redhu Experience
    • EyesFor…
      • #EyesForLuxury
      • #EyesForLifestyle
      • #EyesForDestinations
        • #EyesForIndia
        • #EyesForDubai
        • #EyesForEurope
        • #EyesForLA
        • #EyesForLondon
        • #EyesForNewYork
      • #EyesForPeople
      • #EyesForStreetStyle
      • #EyesForDining
      • #EyesForTechnology
      • #EyesForFashion
        • New York Fashion Week
        • Amazon India Fashion Week AW15
      • #EyesForBeauty
      • #EyesForPeople
    • Art
    • #MadeInIndia
    • #NAINAxADOBE
    • #NosedByNaina
  • Photography Portfolio
  • Contact & About
  • Press
  • Clients
  • Newsletter
0
  • Innovation & Networking

Creative Destruction

  • February 5, 2005
  • naina

Source Articles: McKinsey Quarterly
(Free Registration Required)

1: Creative destruction

SUMMARY:

The first Standard and Poor’s index of 90 major US companies was created in the 1920s. The companies on that original list stayed there for an average of 65 years. By 1998, the average anticipated tenure of a company on the expanded S&P 500 was 10 years. If history is a guide, over the next quarter century no more than a third of today’s major corporations will survive in an economically important way.

When corporate culture kills
How can corporations make themselves more like the market? The general prescription is to increase the rate of creative destruction to the level of the market itself, without losing control of present operations. As sensible as this recommendation is, it has proved difficult to implement.

Cultural lock-in
Cultural lock-in is the last in a series of “emotional” phases in a corporation’s life, a series that mirrors, remarkably, that of human beings. In the early years of a corporation, just after its founding, the dominant emotion is passion-the sheer energy to make things happen. When passion rules, information and analysis are ignored in the name of vision: “We know the right answer; we do not need analysis.”

The causes of cultural lock-in
Why does cultural lock-in occur? The heart of the problem is the formation of hidden sets of rules, or mental models, that once formed are extremely difficult to change. Mental models are the core concepts of the corporation, the beliefs and assumptions, the cause-and-effect relationships, the guidelines for interpreting language and signals, the stories repeated within the corporate walls. Charlie Munger, a longtime friend of and co-investor with Warren Buffett and vice chairman of Berkshire Hathaway, calls mental models the “theoretical frameworks that help investors better understand the world.”

How the markets enable change
Markets, on the other hand, lacking culture, leadership, and emotion, do not experience the bursts of desperation, depression, denial, and hope that corporations face. The market has no lingering memories or remorse. It has no mental models. The market does not fear cannibalization, customer channel conflict, or dilution. It simply waits for the forces at play to work out-for new companies to be created and for acquisitions to clear the field.

Redesigning the corporation for discontinuity
The right of any corporation to exist is not perpetual but has to be continuously earned.
-Robert Simons

The market has pointed the way to a solution. In response to the tension that builds between the potential for improved performance and the actual performance of large businesses in an era of increasingly fast economic change, there are certain kinds of firms-particularly private equity firms-that have demonstrated the ability to change at the pace and scale of the market, and they have earned sustained superior returns for doing so. The two kinds of private equity firms-principal investing firms and venture capitalists-are quite different from each other, but each looks somewhat like the holding companies of the late 19th century. It is possible to imagine that private equity firms will form the seeds of the industrial giants of the 21st century.

The road ahead
Long-term corporate performance has not matched the performance of the markets, because corporations do not adapt as fast as the markets do. This is due to the way corporations evolve, not because of the way they accomplish their day-to-day work. For historical reasons, as we have discussed above, corporations have been designed to operate-to produce goods and services-rather than to evolve. In order to evolve at the pace of the markets, they have to get better at creation and destruction-the two key elements of evolution that are missing.

The point is to let the market control wherever possible. Be suspicious of control mechanisms if they stifle more than they control. Let those who run a business determine the best mix of controls for their business (they know the system best), and shift the burden of integration to the corporate level rather than designing uniform systems that have to be implemented, throughout a corporation, independent of the business. When such changes are implemented, the focus of the corporation will shift from minimizing risk, and thereby inadvertently stifling creativity, to facilitating creativity-and that is what is needed to strengthen long-term performance.

2. Making the most of uncertainty

SUMMARY:

In extremely uncertain environments, shaping strategies may deliver higher returns, with lower risk, than they do in less uncertain times.

Shape or adapt? For years, executives have regarded the question as perhaps their most fundamental strategic choice. Is it better for a company’s competitive position to try to influence, or even determine, the outcome of crucial and currently uncertain elements of an industry’s structure and conduct? Or is the wiser course to scope out defensible positions within an industry’s existing structure and then to move with speed and agility to recognize and capture new opportunities when the market changes?

The different shapes of shapers and adapters
An essential starting point is understanding your alternatives. Shaping and adapting strategies may take many different forms. Shapers generally attempt to get ahead of uncertainty by driving industry change their way. Some, like Qualcomm, aim to increase the probability that a preferred technology or business process will become an industry standard. Others grapple with uncertainty by introducing fundamental product, service, or business-system innovations intended to redefine the basis of competition in an industry: think of the low-price, point-to-point air travel model of Southwest Airlines, Dell Computer’s direct-sales approach, or Netscape Communications’ breakthrough Internet browser, Navigator.

Understanding uncertainty
Whether a company should attempt to shape or adapt depends largely on the level and nature of the uncertainty it faces. To put things simply, when it faces very high levels of uncertainty about variables it can influence, shaping makes most sense. Adapting is preferable when key sources of value creation are relatively stable or outside the company’s control.

Tailoring choices to the four levels of uncertainty
As a rule of thumb for making decisions, then, shaping makes the most sense when uncertainty is high and can be influenced by a company’s actions. To fine-tune this approach, a company must consider ways of varying how it thinks about shaping versus adapting-depending on the nature of the uncertainty it faces. Uncertainty always takes one of four general forms. Understanding which form you face is crucial when you decide whether to shape or adapt.

Other factors
As executives face their shape-or-adapt choices, they must weigh factors beyond the level of residual uncertainty-factors such as the external market environment and the company’s capabilities and aspirations. Shaping strategies, for example, make most sense in markets that offer strong first-mover advantages. One market that may not offer them is Internet-based commerce, which by its very nature invites comparison shopping, thus perhaps undermining one of the most important potential first-mover advantages: brand and customer loyalty. As a result, it isn’t clear yet whether e-commerce shapers such as Amazon.com and eBay have established any sustainable first-mover advantages. Being an e-commerce adapter-replicating good ideas and avoiding bad ones-may offer returns similar to those won by pioneering shapers, without all the risk. Only time will tell.

Total
0
Shares
Share
Tweet
Pin it
Share
Share
Share
Share
Share
Share
naina

Previous Article
  • Innovation & Networking

Capturing creativity

  • January 27, 2005
  • naina
View Post
Next Article
  • Innovation & Networking

Holiday in Goa!

  • February 13, 2005
  • naina
View Post
You May Also Like
NainaCo-Photographer-Storyteller-Luxury-Lifestyle-Raconteuse-Ello-Social-Network-Profile-NainaCo
View Post
  • Articles & Writing
  • Innovation & Networking

ELLO

  • naina
  • October 6, 2014
View Post
  • Innovation & Networking

What I am up to

  • naina
  • September 7, 2011
View Post
  • Innovation & Networking

Been too long

  • naina
  • September 7, 2011
View Post
  • Innovation & Networking

Online Business Networking Status

  • naina
  • May 3, 2009
View Post
  • Innovation & Networking

Bootstrap Logo : Logos for startups

  • naina
  • May 3, 2009
View Post
  • Innovation & Networking

Imtiaz Khan discovers LinkedIn

  • naina
  • September 5, 2008
View Post
  • Innovation & Networking

2BHK Apartment for Sale

  • naina
  • August 1, 2008
View Post
  • Innovation & Networking

Customer-Centered Innovation Map

  • naina
  • May 12, 2008
1 comment
  1. Nikhil says:
    May 1, 2005 at 12:46 pm

    You have quite some interesting posts on innovation! Keep it going!
    -Nikhil
    http://nikhil150.blogspot.com

Comments are closed.





Naina Redhu is a professional photographer & visual artist.

Her career, spanning 16 years, started with an MBA in IT & Systems, to a job as an Innovation Management Consultant, to branding & graphic design work for international clients, to a full-time solo-entrepreneurship as an Experience Collector.

Naina started her blog 16 years ago and it has evolved from writing about Creativity & Innovation, to sharing case studies about Branding & Graphic Design to finally a destination for some of the leading Luxury & Lifestyle brands as Naina writes features for these brands and photographs them.

Having traveled all over India as a child ( the advantage of having a father serving in the Indian Army ), she is also well-traveled across Europe ( Austria, Switzerland, Netherlands, Italy and France ), Asia ( Bhutan, Sri Lanka, Thailand, and Vietnam ), America ( New York, Los Angeles and San Francisco ), and Canada.

Naina has her own podcast called The Naina Redhu Experience, where she talks about the business and professional aspects of photography, blogging and influencer marketing in India.

Her abstract art, under the KhaosPhilos label can be shopped on the Naina.co online store and she is available for bespoke commissions as well.

"The New Rules of Online Brand Building", Naina's on-ground workshop, recently wrapped up its 7th Edition. Launched in 2018, "Workshops By Naina" is going to be seeing more editions across the country & online.

Naina is also available for hire as a Speaker. She has been invited as a Keynote Speaker at a blogging conference and also speaks about the business of photography in India.

Always learning & evolving online, she has presence across several online spaces including Twitter, Instagram, Facebook, YouTube, Pinterest, LinkedIn, TikTok and her podcast can be found on all podcast channels and apps.

#EyesForLuxury
  • janavi india, jyotika jhalani, naina redhu, LMIFWSS21, FDCI, Shaurya Athley, aprajita puri, janavi love, fdci goes digital, talisman, handcrafted, made in india, cashmere, shawls, luxury cashmere, eyesforluxury, madeininda, cashmere, kiera chaplin, spectaculars, eyeforfashion, fashion week, india fashion week, lotus india fashion week 2020, fdci fashion week 2020
    Talisman by Janavi India #LMIFWSS21 : Evil Eye Luxury Cashmere Collection
    • October 18, 2020
  • midsummer jardin, hand-painted jacket, impressionist, pointillism, impressionism, post-impressionism, contemporary art, khaosphilos, wearable art, wear a painting, wear art, made in india, make in india, madeinindia, makeinindia, wearableart, wearart, wearapainting, khaos philos, naina redhu, naina.co, naina, indian artist, art on garments, painted jacket, painted blazer, flower garden, midsummer garden, artist's garden, monet, seurat
    Midsummer Jardin : More About My First Hand-Painted Jacket #KhaosPhilos
    • May 31, 2020
  • bmw, eyesforluxury, automobiles, automobile brand, bayerische motoren werke ag, german company, german automobile, bmw 8 series gran coupe, the8, luxury grand tourer, four door, thegentlemanconnoisseur, nainaxbmw, india art fair, bmw at the india art fair, bmwatiaf, indiaartfair2020, new delhi, lifestyle photographer, luxury photographer, car, automobile photographer, art photographer, art fair, naina redhu, naina, naina.co
    BMW at the India Art Fair 2020 #EyesForLuxury #BMWAtIAF
    • February 22, 2020
#KhaosPhilos Art Label
  • brooch, magnet clasp, hand painted, hand cut, acrylics on wood, original painting, one of a kind, independent artist, made in india, spring drip, naina redhu, khaosphilos, handmade, handcrafted, single artisan
    “Spring Drip” Art Series of Brooches #WearableArt
    • February 11, 2021
  • The “NUANCE” Wearable Art Series of Brooches Made From Hand-Cut Paint
    • November 26, 2020
  • The Hindu Weekend, Susanna Myrtle, LuxeList, Luxe List, Hand Painted Brooches, Wearable Art, Made In India, Naina Redhu, Naina.co, KhaosPhilos, Chaos Lover, Independent Artist, Brooches Are Back, Accessories, Luxury Accessories, One Of A Kind, Unique Accessories, Hand Made, In Time, Diwali Brooch Collection
    One-Of-A-Kind Wearable Art Brooches by KhaosPhilos In The Press : The Hindu Weekend
    • October 16, 2020
Social Links
Products In The Shop
  • Brooches (97)
    • 2 Inches Diameter (41)
    • 2.5 Inches (39)
    • 3 Inches Diameter (15)
    • Oil (1)
    • Sculptural (53)
  • Collections (134)
    • ALIVE (6)
    • Benches (5)
    • DOTS (17)
    • HORIZONS (23)
    • IN TIME (16)
    • METALS (20)
    • NUANCE (8)
    • Paper 2018 (20)
    • Spring Drip (6)
    • The Early Experiments (18)
  • Garments (14)
    • Caps (2)
    • Masks (11)
  • Original Paintings (38)
    • On Canvas (16)
    • On Paper (20)
  • Prints (32)
    • Paintings (22)
    • Photographs (9)
    • Posters (1)
  • SOLD (53)
  • Uncategorized (21)
  • Workshops (3)
Your Cart
#EyesForDestinations
  • narendra bhawan bikaner, narendra bhawan hotel, bikaner luxury hotel, naina redhu, holi 2021, narendra bhawan, siddharth yadav, swimming pool, traveller's table, suryagarh, private haveli, private pool, suryagarh jaisalmer, holi celebrations, bikaner railway station, gurgaon railway station, bikaner to gurgaon by train, gurgaon to bikaner by train, pranay baidya, duck salad, eyesfordestinations, eyesforluxury, india, rajasthan, eyesforrajasthan, eyesforindia, rajasthan tourism
    A Rajasthan Holi, 2021
    • April 7, 2021
  • narendra bhawan bikaner, narendra bhawan, eyesforrajasthan, eyesfordestinations, bikaner, rajasthan, travel photogapher, nainaxnarendrabhawan, best boutique hotel in india, indian boutique hotel, narendra bhawan india, narendra singh, naina redhu, naina, lifestyle photographer, travel blogger
    The Nine Stages of Experiencing Narendra Bhawan Bikaner
    • December 17, 2020
  • bhairon vilas, bikaner, hotel bhairon vilas, dive bar bikaner, dive bar, narendra bhawan bikaner, rajasthan, eyesfordestinations, eyesforrajasthan, rajasthan photographs, travel photographer, bikaner photographs, bikaner bar
    The Dive Bar at Bhairon Vilas, Bikaner
    • December 9, 2020
ART SHOP
  • Cucumber & Rose, 2021, 2.5 Inches ₹5,000.00
  • Repeatedly Relentlessly Resourceful, 2021, 64 Inches in Diameter, Hand-Painted Acrylics on Stretched Canvas ₹1,920,000.00
  • Fragrant Flames, 2021, 16x16 Inches Acrylics on Canvas ₹152,832.00
  • Savannah Cloud, 2021, 16x16 Inches Acrylics on Canvas ₹152,832.00
  • Lipstick Hot And Pink, 2018 #TheEarlyExperiments ₹5,000.00
  • Lipstick Orange And Pink, 2018 #TheEarlyExperiments ₹5,000.00

All Copyright rests with Naina Redhu. All Rights Reserved 2020. Written permission is required for you to copy & use images or text from this website. Email n@naina.co to ask.

NAINA.CO
  • Blog
  • Photography Portfolio
  • Contact & About
  • Press
  • Clients
  • Newsletter
All Rights Reserved. Copyright Naina.co 2020.

Input your search keywords and press Enter.