Why It’s So Hard — Yet Exciting — To Rethink Your Business

Let’s face it: It’s not easy to make significant changes to the way you do business. As Gerry Johnson, George S. Yip and Manuel Hensmans point out in their article “Achieving Successful Strategic Transformation”, relatively few companies are able to make major changes in strategy unless they are prodded to by financial pressure. Part of the reason is simply a function of how difficult it is to do two things well at once — successfully managing the existing business and exploring a new direction. “Although many executives recognize the need to exploit current capabilities while developing new ones, few are very effective at managing this conflicting set of activities,” Johnson, Yip and Hensmans write.

Once made, “choices on business model design often go unchallenged for a long time,” observe authors Raphael Amit and Christoph Zott in their article “Creating Value Through Business Model Innovation”. As a consequence, companies can find themselves operating with assumptions about the marketplace that are no longer true. As Jules Goddard, Julian Birkinshaw and Tony Eccles point out in their article, “Uncommon Sense: How to Turn Distinctive Beliefs into Action,”:

“Propositions that may once have been true almost always become less true or even false over time. Market tastes and preferences change. Technology makes new things possible. Values and features customers once found attractive lose their luster. Companies steal ideas from successful competitors. Pioneering practices become best practices, which in turn become accepted standards. The playing field is forever being leveled. Thus, there is an ongoing need for thoughtfulness, reflection, experimentation and discovery.”

“Thoughtfulness, reflection, experimentation and discovery.” Those qualities are prominent in this issue of MIT Sloan Management Review; the articles by Johnson et al., Goddard et al. and Amit and Zott all offer insights into how companies can develop new strategies or improve existing ones. More generally, throughout the issue, you’ll read about companies trying new ways of doing business.

One company whose story is particularly intriguing is the Lego Group, the maker of popular children’s construction toys based in Billund, Denmark. Lego has experimented successfully with a new form of product development by learning to collaborate with user communities consisting of adult fans of Lego — fans who, it turns out, have lots of ideas for new Lego products.

Admittedly, Lego’s situation — with tens of thousands of fans who enjoy spending their spare time coming up with creative new uses for the company’s products — may be unusual. However, one thing that is universal about Lego’s experience is that the company had to change to develop a new way of doing business; historically a very private company, Lego had to become much more open to outside ideas to innovate effectively with its communities of adult fans. As you read “Collaborating With Customer Communities: Lessons From the Lego Group,” by Yun Mi Antorini, Albert M. Muñiz, Jr. and Tormod Askildsen, I think you’ll agree that Lego’s process of change — and of experimentation and discovery — is an exciting one, indeed.

Martha E. Mangelsdorf
Editorial Director
MIT Sloan Management Review