To innovate or to die is what companies have in common with the medieval armies that battled for leadership in Shakespeare's plays about the crown of England. Despite all strategies to achieve market dominance or finding niches to target profitable segments, in his book Scale, Geoffrey West shows a sobering fact: companies will eventually disappear in about 30 years.
This might be a disturbing message to an ambitious CEO, wondering what all the investments in the past have yielded. Taking a closer look, most of it probably were maintenance cost, which kept the existing business model alive; Building up some entry-barriers in an attempt to monopolize the market place and keep the competition out. This might work for sometime, but with changing customer needs and technology providing a low cost entry in various market spaces, not a sustainable one.
What about those brands that still exist after 50 years and more? They managed to reinvent themselves in cycles, achieved growth through mergers and acquisitions and most of all were able to innovate in time, before it was too late. Complacency is the kiss of death in that sense. Although innovation seems to be a costly affair, rejuvenating the life systems of a company (products, people, process) is key for survival. Until there is a market disruption a lot of companies are able to present "ok" results. But these days, game changers can come from outside its own industry sector, catching enterprises by surprise. What can be observed is that innovation cycles are presenting themselves in shorter time frames, resulting in a declining time-to-profit.
Organizations need to be agile and responsive to changes taking place. Adopting outside-in thinking helps them to expect and react to the black swan events. Spending time on a vision for the future is a necessary step towards a sustainable business. Devising a game-plan to execute is a prerequisite for success.