They are the malcontents, the radicals, the industry revolutionaries. Shackled neither by convention nor by respect for precedent, these companies are intent on overturning the industrial order. What good will it do to work harder to follow the rules when some companies are rewriting them? IKEA, the Body Shop, Charles Schwab, Dell Computer, Swatch, Southwest Airlines, and many more are the rule breakers. We Try Harder may be a great advertising slogan, but it’s depressingly futile as a strategy. Imagine working at Fujitsu for 30 years trying to catch IBM in the mainframe business, or being McDonnell Douglas to Boeing, or Avis to Hertz.
Penney, and numerous others are those peasants. Next are the rule takers, the companies that pay homage to the industrial “lords.” Fujitsu, ABC, U.S. IBM, CBS, United Airlines, Merrill Lynch, Sears, Coca-Cola, and the like are the creators and protectors of industrial orthodoxy. First are the rule makers, the incumbents that built the industry. Look at any industry and you will see three kinds of companies. But pursuing incremental improvements while rivals reinvent the industry is like fiddling while Rome burns. Squeezing another penny out of costs, getting a product to market a few weeks earlier, responding to customers’ inquiries a little bit faster, ratcheting quality up one more notch, capturing another point of market share-those are the obsessions of managers today. Corporations around the world are reaching the limits of incrementalism.
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