Companies that pursue what we call phased diversification tend to be very successful in their diversifications. Phased diversification is a strategy whereby you focus on one line of business until you have reached your objectives in that market, then (and only then) move into a second arena. The nearby diagrams illustrate this concept.

Four Basic Principles of Setting Effective Strategy There are four key principles to keep in mind when setting company strategy. The strategy must descend directly from your vision. Remember, it’s impossible to set strategy unless you have a crystal clear idea of what you’re trying to do in the first place. Vision first, then strategy! The strategy

In Chapter 8, “Innovation,” we stress the importance of decentralization and autonomy. The problem, of course, is how to unleash individual creativity and, at the same time, move in a unified direction. Vision is the link. If all people in the company have a guiding star on which to sight (a common vision), they can be dispersed in hundreds of

If you define success by money, you always lose. The real scorecard in life is how well you build meaningful relationships and how well you live to your core values.

The Innovation-Adoption Cycle is well described in Everett M. Roger’s ground-breaking book Diffusion of Innovations (1983, Free Press). Diffusion of Innovations is, in our view, a must read for those interested in how new innovations are adopted by a population. In sum, the stages of industry analysis is a very useful tool, but it should be used

Tom Chappell, founder of Tom’s of Maine, a highly profitable company, explained in Inc. magazine how the pursuit of numbers alone is an endless treadmill: Quantitative goals can’t invest purpose in a process that has none.26 The quest simply for more of anything is inherently unsatisfying. If there is no point or joy in what you are doing, or if

THE FUNCTION OF LEADERSHIP—THE number one responsibility of a leader—is to catalyze a clear and shared vision for the company and to secure commitment to and vigorous pursuit of that vision.

You’ve got to keep your cause alive long enough for events to play out. If your company gets killed or knocked out of the game, it doesn’t matter if luck might later turn your way. This means knowing and having your buffers and reserves—your twenty-five squadrons—in place to absorb setbacks, attacks, bad luck, and even your own blunders so that you

If someone passionately embraces the core values of the enterprise and also has the indomitable will to do whatever it takes to master his or her seat, you can be more patient before reaching a decision to replace them in that seat. The hardest call comes with the question of will. Does the person lack (or has the person lost) the will to develop