Harvard Business Review Press
September 1, 1992
Many excellent companies have fallen from grace, not because they ignored their customers or lack superior management skills, but because business conditions shifted beneath them. In an environment of fluctuating markets, proliferating technologies, and changing political frontiers, the management challenge is no longer to manage only growth. Now managers must cope with breakpoints, or sudden shifts in the rules of the game. In this timely book Paul Strebel provides the first coherent approach for dealing with radical business change.
Strebel shows that breakpoints may be as enterprising as Drexel Burnham Lambert’s promotion of the junk bond market – or as dramatic as its collapse. They may result from changes in industry conditions such as the emergence of new technologies or price wars, or from within the company itself in the form of a radical reorganization or the succession of a new CEO.
Companies that ignore breakpoints do so at their own peril. Bic, for example, gained market dominance with its disposable razors, and Gillette couldn’t compete successfully until it developed another innovation, the high-tech Sensor. Kirin Beer monopolized the Japanese home market after World War II with its pasteurized lager and then was overtaken by Asahi’s introduction of “dry” beer in the late 1980s. When business conditions shift, the formula for success inevitably changes. Yet managers have difficulty anticipating discontinuities and only rarely do they exploit them.
This book presents a new way of managing different types of radical business change. Strebel describes a simple framework that allows managers to adapt to diverse conditions, especially those that lead to breakpoints. He suggests how to develop a radical change scenarios that will help managers better anticipate or catch up with discontinuities. Further, Strebel reveals what managers must do to create competitive discontinuities – and become true market leaders.
Breakpoints shows managers how to exploit the potential in discontinuous change, thereby outpacing the competition. Mastering the management of breakpoints will become indispensable to corporate excellence in the next decade.
Paul Strebel is professor of business administration and director of the International Executive program on radical change management at the International Institute for Management Development (IMD) in Lausanne, Switzerland. His consulting and executive development activities have been in the areas of value-based strategic planning, acquisitions and mergers, and the anticipation and management of competitive turning points and breakpoints.