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Creating a fundamentally different business in the shadow of the old one – while its assembly lines continue to roll – is a daunting challenge. Bain consultant Chris Zook recently published the last book in a trilogy which addresses the question of how to make “fundamental change in your business model, while still running your business.”. This paper aims to explores his views on this subject.

For this interview, two Strategy & Leadership senior editor's – one a Silicon Valley consultant and former CEO and the other an academic – – asked Zook to take them on a guided tour of his reinvention process.

The paper finds that the underlying thesis in each of the three books is that companies need to master all phases of a strategic life cycle: from extracting the full potential from their core business, to expanding their business successfully, to redefining themselves For most companies and in more industries, the strategy cycle – from Focus, to Expand, to Redefine – has become shorter, and therefore companies frequently confront moments of redefinition of their core.

In this interview, Zook's how‐to advice for managers covers: the role of hidden assets, the “state of the core diagnostic” tool, the “shrink to grow” strategy, how to test “the waters,” and the FER (focus‐expand‐redefine) cycle.

Because the interview considers the whole trilogy the reader gets a unique view of how Zook's ideas fit together and build a cogent thesis.

The tempting luster of new business ideas has led many executives to take their eyes off the basics of positioning, and instead undertake seemingly inspired initiatives that eventually destroy value. This “Masterclass” aims to put attention back on the fundamentals of strategic positioning by analyzing how the insights in four recent books are complementary.

The Masterclass identifies a classic formula for strategic success – focus, alignment, repeatability and leadership. The featured readings that support the formula are: Understanding Michael Porter – The Essential Guide to Competition and Strategy by Joan Magretta; Repeatability – Building Enduring Businesses for a World of Constant Change by Chris Zook and James Allen; The Strategist – Be the Leader Your Business Needs by Cynthia A. Montgomery; and The IKEA Edge – Building Global Growth and Social Good at the World's Most Iconic Home Store by Anders Dahlvig.

Effective strategic positioning must be both economically convincing and emotionally compelling so leaders can communicate it throughout the organization in a way that is clear, energizing and empowering. The leader makes a difference by infusing a company's positioning with a strong sense of purpose, refocusing the organization when it starts to stray off track and repositioning it when its original positioning has run its course.

A key lesson is the value of repeatability. Most companies that sustained a modest level of profitable growth over the last decade have done it by replicating an easily recognizable model that recreates their strongest strategic advantage in new contexts. The virtue of such an approach lies in the way that it turns the sources of differentiation into routines, behaviors and activity systems that everyone in the organization can understand and follow.

Managers will appreciate this insightful back‐to‐basics approach that both simplifies their choices and expands their opportunities.

The challenge of sustaining growth seems to be getting steeper and steeper. This Masterclass provides context for two recent books that have valuable insights to offer to company leaders and strategists on how to build resilience and sustain growth in increasingly dynamic and uncertain global competitive markets.

In The Founder’s Mentality: How to Overcome the Predictable Crises of Growth (2016), well-known Bain strategy consultants, Chris Zook and James Allen offer a strategy for consciously embedding “the founder’s mentality” into the culture of young firms as they scale or rediscovering it in mature firms that might be stalling and losing their way. For strategy and innovation guru, Vijay Govindarajan, sustaining growth increasingly requires being able to pursue simultaneously two very different types of activity and mindset – exploiting a legacy business while exploring new business opportunities. He offers a very practical framework for approaching this challenge in The Three Box Solution: A Strategy for Leading Innovation.

The “founder’s mentality” refers to “a collection of specific behaviors and attitudes best exemplified by the traits of great founders that if properly cultivated in the rest of the organization, can lead more reliably to sustainable growth.” Some young firms fail to establish a founder’s mentality from the outset, while many mature founder-led companies come to lose their sense of insurgency and other key founder’s mentality traits over time. “Just about every company, at any stage in its life, can benefit from the attitudes and behaviors that make up the founder’s mentality.”

Govindarajan argues that “asking what assumptions must be true for this idea to be highly profitable” and testing the most critical of these “as early and as inexpensively as possible” is ‘the best way to reveal an ill-conceived project.

The two books, taken together, provide a wealth of insight for leaders seeking to diagnose their firm’s growth problems and looking for potential solutions for reviving innovation and growth.

Adjacency judgments – which, if any, related businesses should your firm expand into – are among the most difficult and critical decisions senior executives face as they search for sources of sustained and profitable growth. These determinations can make or break a company. The key is in understanding how to systematically boost your odds of success by moving into territories at the fringes of your core business. “How” begins with an in‐depth knowledge of the strengths and weaknesses of your core. For companies in leadership positions, the chances for adjacency success are nearly three times higher than for followers. But for distant followers, adjacencies are almost never the answer. Rather, their perilous route to success comes from three strategies: shrinking to grow around a smaller, stronger core; consolidating with another competitor to build scale; or coming out with a breakthrough product. The cases show examples of strategies for a range of core business situations.

When it comes to leadership, companies that systematically and continuously put the right leaders in the right jobs outperform companies that don’t – by a wide margin. Despite this profound observation, the subject of leadership still does not warrant the attention it deserves. Granted, there is no shortage of literature on the need for better business leadership in general, but there is little to explain what it really takes to make it happen.