Chaos is a Ladder

If you think the existing system simply needs to be improved, you might want to build or invest in the types of companies that can improve it.

But if you believe that we’re in a moment in which systems need to be rebuilt, then you will want to build or invest in a smaller number of Vertical Integrators that can handle as much complexity as is need

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Henderson and Clark cite Abernathy and Utterback (1978) who, if you’ll recall from Vertical Integrators: Part II :

co-authored a paper titled A Dynamic Model of Process and Product Innovation . By looking at a study of 120 firms, they found that product innovation is initially dominant but gradually gives way to process innovation as the product de

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