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Creative destruction
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. So conclude Richard Foster and Sarah Kaplan in their best-selling book Creative Destruction: Why Companies That Are Built to Last Underperform the Market—and How to Successfully Transform Them. Using their research on the performance of more than 1,000 corporations in 15 industries during a 36-year period, the authors argue that the corporate equivalent of El Dorado—the golden company that continually outperforms the markets—has never existed. Managing for survival, even among the best and most revered corporations, doesn't guarantee long-term performance for shareholders.
The take-away: In this excerpt from the book, the authors argue that managers must abandon assumptions of continuity and tackle the cultural barriers that make it hard to change corporate cultures, even in the face of clear market threats.
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