The depressing headlines are only the latest manifestation of a trend that has been long in the making: the encroachment of Schumpeter’s famous “gales of creative destruction” over what were once relatively stable, even mature, businesses.1 Unfortunately, leaders of many of today’s more mature organizations don’t have the right mindset or practices to help their organizations survive. They grew up with management practices suited to a different age—one with higher barriers to entry, greater transaction costs, fewer capable competitors, growing and increasingly affluent markets and far less information. The environments they are facing now, however, are less predictable, more complicated and more volatile.

The result is that many of the core businesses—involved with what may be boring old, mainstream, mature products and services that everyone has taken for granted—are themselves becoming more uncertain. As uncertainty increases, companies are finding themselves facing what we call a high ratio of “uncertainty to knowledge.” This is a problem because making decisions based on old assumptions often leads to unfortunate outcomes.

Human beings have a tendency to embrace information reinforcing their pre-existing beliefs, while challenging or... To read the complete article, login or sign-up using the form below.