design2disrupt summit: joseph pine - destructive recreation

Destructive Recreation

©    2014  Strategic  Horizons  LLP

B. Joseph Pine II

Strategic Horizons LLP

bjp2@StrategicHorizons.com

@joepine

Economies evolve, produce wealth, and remain vital when the process of ever-changing markets, offerings, and enterprises “incessantly revolutionizes the economic structure from within, incessantly destroying the old one, incessantly creating a new one.”

Source: Joseph A. Schumpeter, Capitalism, Socialism, & Democracy, Third Edition (New York: Harper Perennial, 1950), pp. 81-86.

“This process of Creative Destruction is the essential fact about capitalism.”

We used to think. . .

∞ goods and services were enough

© 2014 Strategic Horizons LLP

Now we must. . .

∞ stage experiences and guide transformations

Destructive Recreation

Transformations

Guide

The Progression of Economic Value

© 2011 Strategic Horizons LLP

Stage

Experiences

Services

Deliver

Make

Goods

Customization

Customization

Customization

Commoditization

Commoditization

CommoditizationCommodities

Extract

We used to think. . .

∞ goods and services were enough

© 2014 Strategic Horizons LLP

Now we must. . .

∞ stage experiences and guide transformations

Destructive Recreation

We used to think. . .

∞ goods and services were enough  

∞ we could invent great products & mass produce them for years

© 2014 Strategic Horizons LLP

Now we must. . .

∞ stage experiences and guide transformations

∞ mass customize & constantly renew our offerings

Destructive Recreation

The Old Competitive Reality

© 1993 Strategic Horizons LLP

MassProduction

Dynamic Product Change

Stable Product Change

DynamicProcess Change

Stable Process Change

Invention

Develop

Source: Bart Victor, Andrew C. Boynton, and B. Joseph Pine II

The New Competitive Reality

© 1993 Strategic Horizons LLP Source: Bart Victor, Andrew C. Boynton, and B. Joseph Pine II

Dynamic

Stable

Process Change

Stable

OfferingChange

Dynamic

Mass Production

Invention

Develop

Continuous Improvement

Link

Mass Customization

Modularize

Renew

The New Competitive Reality

© 1993 Strategic Horizons LLP Source: Bart Victor, Andrew C. Boynton, and B. Joseph Pine II

Dynamic

Stable

Process Change

Stable

OfferingChange

Dynamic

Mass Production

Invention

Develop

Continuous Improvement

Link

Mass Customization

Modularize

Renew

Transformations

Guide

The Progression of Economic Value

© 2011 Strategic Horizons LLP

Stage

Experiences

Services

Deliver

Make

Goods

Customization

Customization

Customization

Commoditization

Commoditization

CommoditizationCommodities

ExtractIndividuali

zatio

n

We used to think. . .

∞ goods and services were enough  

∞ we could invent great products & mass produce them for years

© 2014 Strategic Horizons LLP

Now we must. . .

∞ stage experiences and guide transformations

∞ mass customize & constantly renew our offerings

Destructive Recreation

We used to think. . .

∞ goods and services were enough  

∞ we could invent great products & mass produce them for years  

∞ materiality conferred advantage

© 2014 Strategic Horizons LLP

Now we must. . .

∞ stage experiences and guide transformations

∞ mass customize & constantly renew our offerings  

∞ embrace digital technology

Destructive Recreation

The Known Universe

(Digital

Substances)

(Virtual Places)

(Autonomous Events)

(Real Places)

(Actual Events)

No-Matter

No-Space

No-Time

MatterTime

Space

(Material Substances)

© 2011 Strategic Horizons LLP

(Digital

Substances)

(Virtual Places)

(Autonomous Events)

(Real Places)

(Actual Events)

No-Matter

No-Space

No-Time

MatterTime

Space

(Material Substances)

© 2011 Strategic Horizons LLP

The Multiverse

We used to think. . .

∞ goods and services were enough  

∞ we could invent great products & mass produce them for years  

∞ materiality conferred advantage

© 2014 Strategic Horizons LLP

Now we must. . .

∞ stage experiences and guide transformations

∞ mass customize & constantly renew our offerings  

∞ embrace digital technology

Destructive Recreation

We used to think. . .

∞ goods and services were enough  

∞ we could invent great products & mass produce them for years  

∞ materiality conferred advantage

© 2014 Strategic Horizons LLP

Now we must. . .

∞ stage experiences and guide transformations

∞ mass customize & constantly renew our offerings  

∞ fuse the real with the virtual

Destructive Recreation

© 2014 Strategic Horizons LLP

(Digital

Substances)

(Virtual Places)

(Autonomous Events)

(Real Places)

(Actual Events)

No-Matter

No-Space

No-Time

MatterTime

Space

(Material Substances)

The Multiverse

We used to think. . .

∞ goods and services were enough  

∞ we could invent great products & mass produce them for years  

∞ materiality conferred advantage

© 2014 Strategic Horizons LLP

Now we must. . .

∞ stage experiences and guide transformations

∞ mass customize & constantly renew our offerings  

∞ fuse the real with the virtual

Destructive Recreation

We used to think. . .

∞ goods and services were enough  

∞ we could invent great products & mass produce them for years  

∞ materiality conferred advantage  

∞ the way to manage was to optimize the enterprise

© 2014 Strategic Horizons LLP

Now we must. . .

∞ stage experiences and guide transformations

∞ mass customize & constantly renew our offerings  

∞ fuse the real with the virtual  

∞ adopt a way of managing with the intent to vitalize the enterprise

© 2014 Create Advantage, Inc.

Destructive Recreation

To withstand the Schumpeterian gale of creative destruction, the enterprise must be “destructively recreating itself over and over again by innovating within the enterprise at least as much as is going on in its ecosystems. Anything less and the enterprise will eventually get blown over by others moving faster, operating better, and creating greater value.”

Source: Kim C. Korn & B. Joseph Pine II, The Laws of Managing (Indianapolis: Dog Ear Publishing, 2014), p. 47.

Ente

rpris

e Vi

talit

y R

elat

ive

to it

s Ec

osys

tem

s +

FailingThriving

Trailing Creative Destruction

Leading Creative DestructionRegenerative

Trajectory

Degenerative Trajectories

Ambient Level

Enterprise Trajectories

© 2014 Create Advantage, Inc.

-

Source: Kim C. Korn & B. Joseph Pine II, The Laws of Managing (Indianapolis: Dog Ear Publishing, 2014), p. 47.

The Law of Vitality

Only the enterprise that attains

vitality, through its incessant destructive recreation, produces the wealth necessary to survive.

EcosystemsEnterprise

DESTRUCTION

CREATION

DESTRUCTION

CREATION

© 2014 Create Advantage, Inc.

Destructive Recreation

We used to think. . .

∞ goods and services were enough  

∞ we could invent great products & mass produce them for years  

∞ materiality conferred advantage  

∞ the way to manage was to optimize the enterprise

© 2014 Strategic Horizons LLP

Now we must. . .

∞ stage experiences and guide transformations

∞ mass customize & constantly renew our offerings  

∞ fuse the real with the virtual  

∞ adopt a way of managing with the intent to vitalize the enterprise

© 2014 Create Advantage, Inc.

Destructive Recreation

We used to think. . .

∞ goods and services were enough  

∞ we could invent great products & mass produce them for years  

∞ materiality conferred advantage  

∞ the way to manage was to optimize the enterprise

© 2014 Strategic Horizons LLP

Destructive Recreation

Now we must. . .

∞ stage experiences and guide transformations

∞ mass customize & constantly renew our offerings  

∞ fuse the real with the virtual  

∞ adopt a way of managing with the intent to vitalize the enterprise

© 2014 Create Advantage, Inc.

Destructive Recreation

©    2014  Strategic  Horizons  LLP

B. Joseph Pine II

Strategic Horizons LLP

bjp2@StrategicHorizons.com

@joepine