To break silos and drive performance, companies can structure internal functions like marketing or IT as competing agencies. Product teams can 'hire' the internal department of their choice, creating a marketplace that forces support functions to operate with a P&L and be truly customer-centric.
To foster experimentation, leaders should stop judging innovative projects individually and instead group them as a single portfolio. This reframes inevitable failures as part of a diversified strategy, similar to a stock portfolio, where the overall return matters, not the performance of any single asset.
Research across major companies shows that 71% of the time, a solution for a known customer need already exists internally. The primary barrier to innovation isn't a lack of solutions, but the inability for siloed departments to discover and connect existing capabilities with identified customer needs.
Companies like Sony lost to Apple not because of inferior products, but because the competitive landscape shifted from product quality to distribution. Leaders must recognize when the fundamental 'game' changes, as the capabilities required to win are completely different, even if the core customer job remains the same.
Contrary to popular belief, Blockbuster saw the streaming trend and launched a competing service. Their failure was a subtle but critical mindset gap: they built an 'online storefront' while Netflix created 'entertainment as a service.' This difference in strategic framing led to a vastly inferior, non-personalized user experience.
The dominant strategic mindset is shifting from hierarchical control to platform-based coordination. As shown by Urban Outfitters' successful Nuuly clothing rental service, companies can create massive value by "coordinating the uncoordinated"—connecting disparate resources rather than owning all assets and processes directly.