1. “K Mart Has to Open Some New Doors on the Future,” Fortune, July 1977, p. 144.
2. R.A. Burgelman and A.S. Grove, “Strategic Dissonance,” California Management Review, volume 38, Winter 1996, pp. 8–28 (quote from p. 15).
3. The answer, according to Michael Porter, is no. He describes how Continental Airlines tried to play both games by maintaining its position as a full-service airline while creating a new service dubbed Continental Lite to imitate the strategy of Southwest. This venture failed, suggesting that “positioning trade-offs deter straddling or repositioning, because competitors that engage in those approaches undermine their strategies and degrade the value of their existing activities.” See:
M. Porter, “What Is Strategy?,” Harvard Business Review, volume 74, November–December 1996, pp. 61–78 (quote from p. 69).
4. Earlier attempts by IBM to play both games simultaneously (through a direct-sales operation called Ambra) had failed. For a fascinating discussion on how IBM, Compaq, and HP are now trying to imitate Dell’s position (without abandoning their current position), see:
D. Kirkpatrick, “Now Everyone in PCs Wants to Be like Mike,” Fortune, 8 September 1997, pp. 47–48.
5. See C. Markides, Crafting Strategy: A Journey into the Mind of the Strategist (Boston: Harvard Business School Press, forthcoming).
6. See D. Abell, Defining the Business: The Starting Point of Strategic Planning (Englewood Cliffs, New Jersey: Prentice-Hall, 1980).
7. Porter (1996).
8. C. Markides, “Strategic Innovation,” Sloan Management Review, volume 38, Spring 1997, pp. 9–23.
9. See, for example:
M. Tushman and P. Anderson, “Technological Discontinuities and Organizational Environments,” Administrative Science Quarterly, volume 31, 1986, pp. 439–465;
R. Henderson and K. Clark, “Architectural Innovation: The Reconfiguration of Existing Product Technologies and the Failure of Established Firms,” Administrative Science Quarterly, volume 35, 1990, pp. 9–30;
A. Meyer, G. Brooks, and J. Goes, “Environmental Jolts and Industry Revolutions: Organizational Responses to Discontinuous Change,” Strategic Management Journal, volume 11, 1990, pp. 93–110; and
D. Leonard-Barton, “Core Capabilities and Core Rigidities: A Paradox in Managing New Product Development,” Strategic Management Journal, volume 13, 1992, pp. 111–125.
10. The other firms that form the backbone for this article include British Airways, Midlands Bank, Hewlett-Packard, Leclerc Supermarkets (in France), 3M, Royal Bank of Scotland, Tesco, Lan & Spar Bank (in Denmark), Douwe Egberts (in the Netherlands), and Hanes Corporation.
11. For similar concepts, see:
C. Handy, The Empty Raincoat (London: Basic Books, 1994);
C. Markides, “Business Is Good? Time for Change!,” London Business School Alumni News, Spring 1994, p. 15; and
Burgelman and Grove (1996).
12. See “Jack Welch’s Encore,” Business Week, 28 October 1996, pp. 42–50.
13. The importance of monitoring the organization’s strategic health to anticipate (rather than react to) change is also emphasized in:
M. Tushman, W. Newman, and E. Romanelli, “Convergence and Upheaval: Managing the Unsteady Pace of Organizational Evolution,” California Management Review, volume 26, Fall 1986, pp. 29–44; and
C. Markides, “Strategic Management: An Overview,” in S. Crainer, ed., Financial Times Handbook of Management (London: Financial Times Pitman Publishing, 1995), pp. 126–135.
14. See, for example:
G. Hamel and C.K. Prahalad, “Strategic Intent,” Harvard Business Review, volume 67, May–June 1989, pp. 63–76; and
J. Collins and J. Porras, Built to Last: Successful Habits of Visionary Companies (New York: HarperBusiness, 1994).
15. Markides (1997).
16. The notion that the underlying “structure” of the system creates the behavior in that system has been the subject of a large amount of literature in the systems dynamics field. See, for example:
J. Forrester, Principles of Systems, second edition (Portland, Oregon: Productivity Press, 1968); and
A. Van Ackere, E. Larsen, and J. Morecroft, “Systems Thinking and Business Process Redesign,” European Management Journal, volume 11, 1993, pp. 412–423. For a more managerial angle, see:
C. Bartlett and S. Ghoshal, “Rebuilding Behavioral Context: Turn Process Reengineering into People Reengineering,” Sloan Management Review, volume 37, Fall 1995, pp. 11–23.
17. The literature on this topic is huge. As a start, see:
R. Burgelman and L. Sayles, Inside Corporate Innovation: Strategy, Structure, and Managerial Skills (New York: Free Press, 1986);
R.M. Kanter, The Change Masters (New York: Simon & Schuster, 1984);
M. Tushman and W. Moore, eds., Readings in the Management of Innovation, second edition (New York: HarperBusiness, 1988);
D. Miller, “The Icarus Paradox: How Exceptional Companies Bring about Their Own Downfall,” Business Horizons, volume 35, 1992, pp. 24–35; and
S. Ghoshal and C. Bartlett, “Changing the Role of Top Management: Beyond Structure to Processes,” Harvard Business Review, volume 73, January–February 1995, pp. 86–96.
18. Burgelman and Grove (1996), p. 20.
19. R. Nelson, “Capitalism as an Engine of Progress,” Research Policy, volume 19, 1990, pp. 193–214.
20. For a supporting discussion, see:
M. Tushman and C. O’Reilly III, “Ambidextrous Organizations: Managing Evolutionary and Revolutionary Change,” California Management Review, volume 38, Summer 1996, pp. 8–30;
Burgelman and Grove (1996); and
Bartlett and Ghoshal (1995).
21. This same point is also discussed in:
Tushman and O’Reilly (1996); and
Burgelman and Grove (1996).
22. See, for example:
Burgelman and Sayles (1986).
23. See, for example:
S. Ghoshal and C. Bartlett, “Rebuilding Behavioral Context: A Blueprint for Corporate Renewal,” Sloan Management Review, volume 37, Winter 1996, pp. 23–36.