Sustaining innovation is the lifeblood of any enterprise. It is the time when we capitalize upon, and recover from, all the disruptive change prior. Most of the operating profits in the world come from sustaining innovation. Much of the market capitalization gains, on the other hand, come from disruptive innovations.

Sustaining innovations are the key to consistent performance, whereas disruptive innovations are the key to dramatic changes in power.

The danger is to cling to comfort and custom at a time when events demand breaking away from both. But it is also foolish to jump at every startling moment. Darwin selects primarily for prudent fast-following.

If you ask why start-ups outperform established enterprises when it comes to catching the next wave, the answer is that they are not conflicted. Everyone is rowing in the same direction. That is never the case in a company that has a portfolio of businesses at different stages in their maturity. So the key to winning there has to be to "zone out" the conflicts - sort of like sending quarrelling children each to their own room.

The biggest problem is typically overly ambitious expectations combined with undercapitalization.

The first mistake is believing that transformational initiatives can be accomplished through normal channels and means. This cannot be done because there are too many conflicting interests that are competing to impede. The second is mistaking incubation for transformation and concluding that failure to achieve escape velocity is due to lack of innovation. It never is. It is always do to lack of leadership focus and, especially, fortitude.

The single greatest business opportunity that is now emerging in the global marketplace is the ability to analyze digital log data to trace digital actions and from those traces to develop algorithms that can predict future outcomes with greater accuracy.