One reason there are so many short-lived management fads is that their prescriptions were derived and advocated in precisely this way. So managers read about a fad and try it, find that it doesn't work, abandon the effort, and move on to the next thing. In reality, it is usually the case that the faddish prescription was indeed sound advice in certain circumstances, but actually was poor advice in other circumstances.

If you ask the average guy on the street to name five companies that have truly transformed themselves over the few decades, Hewlett-Packard would be on everybody's list. You'd also put on this list GE and Johnson & Johnson.

One of the factors that make great companies so great is that they have processes that allow them to solve difficult problems again and again. These processes have developed over time as teams have successfully wrestled with a certain type of challenge. Eventually, people begin to say, "This is just how we do something around here." The problem develops when that team then has to solve a very different set of challenges. The processes that are such strengths can be crushing liabilities.

The mistake managers often make is defining their industry too narrowly. Digital's market share in the minicomputer market stayed very robust even as it fell off the cliff. Disruption seems to come out of nowhere, but if you know what to look for, you can spot important developments well before the market does.

One reason there are so many short-lived management fads is that their prescriptions were derived and advocated in precisely this way. So managers read about a fad and try it, find that it doesn't work, abandon the effort, and move on to the next thing. In reality, it is usually the case that the faddish prescription was indeed sound advice in certain circumstances, but actually was poor advice in other circumstances.

The reason why it is so difficult for existing firms to capitalize on disruptive innovations is that their processes and their business model that make them good at the existing business actually make them bad at competing for the disruption. Companies in fact are specifically organized to under-invest in disruptive innovations! This is one reason why we often suggest that companies set up separate teams or groups to commercialize disruptive innovations. When disruptive innovations have to fight with other innovations for resources, they tend to lose out.

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.