* * * Harvard Business Review - Top 10 Book of 2001 * * * It is well known that if you compare a list of the top 500 companies 50 years ago with a list of today's top performers, there will be very few names that appear on both lists. Those companies that have stood the test of time are held up as paragons of corporate performance - blue-chip businesses that are "built to last". What is less well known, however, is that companies that are built to last are also built to under-perform. Excellent new research by the authors of Creative Destruction shows that very few companies are able to deliver above-average shareholder returns over the long term. General Electric and Johnson & Johnson are the only companies to beat the market average over the long term and then only by a small amount. Why? It's the trade off between control and creativity. The very things that have enabled these companies to perform so dependably - their control processes, their commitment to steady incremental improvement - are the very things that deaden their ability to change and innovate. Doing what you do well might be enough to survive but it's not enough to excel for investors.
To excel for your investors you must constantly evolve, innovate, change - destroy and create. Change, Innovation, Creativity - heard it all before? Well, apart from proving that this is more than just hype by analyzing the last 36 years' worth of corporate performance data, Foster and Kaplan actually tell you how to do it. How to deal with the corporate mindset and emotional attachments that stand in the way of change, how to find the balance between control and creativity, and how to control the pace and scale of change. Incremental improvement eventually hits a brick wall. Creative destruction is the way through. "A thoroughly researched, masterfully written, and somewhat frightening explanation of how competitive advantage is built and inevitably erodes. Anyone who is interested in staying ahead of the competition should read this book. It's good."Clayton Christensen, Associate Professor, Harvard Business School and author of The Innovator's Dilemma "(Offers) invaluable insight into business building and dealing with the challenge of dynamic growth. Foster and Kaplan, get right to the heart of one of today's central themes...An instructive and insightful guide for managers to navigate.
..the twenty-first century."Jorma Ollila, Chairman and CEO, Nokia Corporation "It was clear the game had changed, but until this book it was never clear by how much. Creative Destruction will reverberate in corporate boardrooms for some time to come, changing the basic premises of corporate success. There is no doubt that, in order to survive in the future, inspiration can be found in Foster and Kaplan's book."Antony Burgmans, Chairman, Unilever NV "Creative Destruction is a phenomenal book. It reveals what it takes for an enterprise to thrive in the age of discontinuities yet meet the pressures of continuous performance. Wise, sweeping, balanced, grounded in facts and yet highly imaginative, it is unquestionably the best business book I have ever read...Countless numbers of CEO's will wish they could have read it sooner...and so will their shareholders."John Seely Brown, President, Xerox Palo Alto Research Center "Creative Destruction has clarified for me the challenges of sustaining business success. It is the freshest view of the challenges before us that I have seen. It also shows where we have to change to be successful...Compelling."
Vernon Jordon, Lazard Freres "Creative Destruction is a sharp stick in the eye for corporate conventional wisdom and orthodoxy. Foster and Kaplan have captured the essence of market-driven counterinitiative thinking. A wake up call for CEOs and investment strategists!" Joe L Roby, Chairman, Credit Suisse First Boston Corporation "A skilled dissection of organisational inertia...In a fast-moving business world, Foster and Kaplan's ideas make a lot of sense." New York Times "It's a fascinating book" Catherine Wheatley, Sunday Business "This is a provocative and timely book." Harvard Business Review