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

As a buying group, visionaries are easy to sell but very hard to please. This is because they are buying a dream - which, to some degree, will alwasy be a dream.

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.

To fix the business, to bring it back to health, you must assimilate enough of the disruptive innovation to modernize the operating model without jettisoning your business model. This typically requires new leaders and definitely requires new (if temporary) rules. The CEO is the only person who can dictate the correct terms in a timely manner and maintain the enterprise's commitment to those terms for the duration of the rehabilitation effort.

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.

Systems are corporate funded mechanisms for increasing efficiency; programs are user funded mechanisms for increasing effectiveness. Programs should generally be charged back to users, systems should never be. Allocating corporate overhead to the operating units is simply a mistake.

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