Creative Destruction: Why Companies That Are Built to Last Underperform the Market—And How to Successfully Transform Them

Inspired by a phrase first coined by Joseph Alois Schumpeter, the great economist of the 1930s and '40s, "creative destruction," the authors argue, should be at the top of every company's agenda—starting yesterday. With a stance that may strike many of the "build to last" school as controversial, McKinsey & Co. consultants Foster and Kaplan strongly suggest that companies need to move a lot like capital markets, with the ability to swiftly create solutions and remove weak performers. They build their case by drawing on analyses of 1,008 companies compiled in a McKinsey database that spans fifteen industries over the past thirty-eight years. The authors acknowledge that some leaders may object to applying Schumpeter's economic ideas to individual corporations but add, "Like it or not, the age of continuity is gone forever."