How could Digital's collapse be so precipitous? It's because, in many ways, financial performance data is misleading. As you move up to the top of the market, you're getting rid of the less profitable products at the low end and adding business with more attractive margins at the high end. The rate of unit volume growth might be tapering off as you pursue these smaller markets, but your margins actually look better. So Wall Street rewards your stock price until you hit the ceiling.

If you just look at the data, you are led to believe that things are getting better, rather than worse. That's why the fall is really precipitous, once you hit the ceiling.

I was lucky enough to build on the work of a number of people who had already run laps around this theory-building track. The original classification scheme, years ago, distinguished radical from incremental change. The theory said that established firms managed incremental change well, but would be expected to founder when their industry encountered a radical change.

Core competence, as it is used by many managers, is a dangerously inward-looking notion. Competitiveness is far more about doing what customers value than doing what you think you're good at.

Because if the decisions you make about where you invest your blood, sweat, and tears are not consistent with the person you aspire to be, you’ll never become that person.

Children build self-esteem by doing things that are hard and learning what works.

Motivation is the catalyzing ingredient for every successful innovation. The same is true for learning.