The Invincible Company

1. Invincible Companies Constantly Reinvent Themselves

An Invincible Company constantly reinvents itself before it becomes obsolete.

Continuous evolution. Invincible Companies understand that business models expire faster than ever before. They don't wait for disruption to force change; instead, they proactively explore new opportunities while excelling at their current operations. This dual focus allows them to stay ahead of competitors and adapt to shifting market dynamics.

Disruption-ready mindset. These companies cultivate an innovation culture that coexists harmoniously with their execution culture. They compete on superior business models rather than just products or services, allowing them to transcend traditional industry boundaries. By constantly questioning the status quo and exploring new possibilities, Invincible Companies ensure their long-term relevance and success.

2. Manage Your Business Model Portfolio

Use the PORTFOLIO MAP to design, test, and MANAGE your business portfolio.

Dual portfolio management. Invincible Companies strategically manage two distinct portfolios:

• Exploit Portfolio: Existing business models that generate current revenue
• Explore Portfolio: New business models and innovations being tested and developed

Visual portfolio tool. The Portfolio Map helps leaders:

• Visualize: Gain a clear overview of all business models
• Analyze: Identify areas of strength, weakness, and opportunity
• Manage: Make informed decisions about resource allocation and investment

By balancing these portfolios, companies can optimize current performance while securing future growth and relevance.

3. Compete on Superior Business Models, Not Just Products

Design, test, and build superior business models that disrupt others and are hard to disrupt.

Beyond product innovation. While product innovation remains important, Invincible Companies recognize that competing solely on products, services, or price is increasingly challenging. Instead, they focus on designing superior business models that create unique value propositions and competitive advantages.

Pattern recognition. The book introduces a library of business model patterns that companies can use to:

• Enhance market opportunities
• Leverage new technologies
• Improve existing products and services

By applying these patterns, companies can create business models that are both disruptive to competitors and resilient to disruption themselves.

4. Transform Existing Business Models Through Strategic Shifts

Use the PATTERN LIBRARY to enhance market opportunities, new technologies, and product and service innovations.

Strategic transformation. Invincible Companies don't just create new business models; they also know how to transform existing ones. The book provides a library of shift patterns that help companies move from outdated to more competitive business models.

Key shift areas:

• Value Proposition Shifts (e.g., from product to recurring service)
• Frontstage Driven Shifts (e.g., from niche to mass market)
• Backstage Driven Shifts (e.g., from asset-heavy to asset-light)
• Profit Formula Driven Shifts (e.g., from high-cost to low-cost)

By mastering these shifts, companies can revitalize declining businesses and create new growth engines from existing assets.

5. Design and Implement an Innovation Culture

Create the conditions for success to establish an INNOVATION CULTURE.

Cultural transformation. Invincible Companies recognize that fostering innovation requires more than just processes and tools; it demands a supportive culture. They intentionally design and manage their culture to encourage experimentation, learning, and calculated risk-taking.

Key cultural elements:

• Leadership support and role modeling
• Organizational structures that empower innovators
• Reward systems that incentivize exploration
• Processes that facilitate rapid testing and learning

The book provides practical tools, such as the Culture Map, to help organizations assess their current culture and implement changes that foster innovation.

6. Balance Exploration and Exploitation

Invincible Companies do not prioritize exploitation over exploration. They are world class at simultaneously managing the entire continuum from exploring new businesses to exploiting existing ones.

Ambidextrous organization. Successful companies maintain a delicate balance between exploring new opportunities (exploration) and optimizing current operations (exploitation). This dual focus allows them to innovate for the future while maintaining profitability in the present.

Key differences:

• Exploration: High uncertainty, risk-taking, iterative experimentation
• Exploitation: Low uncertainty, efficiency-focused, linear execution

Invincible Companies design organizational structures, processes, and cultures that allow these two seemingly contradictory approaches to coexist and thrive.

7. Foster Entrepreneurial Leadership and Teams

We believe that the most successful project teams in Invincible Companies are not led by project managers who manage several projects in parallel. They are led by people who see themselves as entrepreneurs.

Entrepreneurial mindset. Invincible Companies cultivate leaders and teams who approach innovation projects with an entrepreneurial spirit. These individuals are fully committed to bringing ideas to fruition and behave like founders, even within the context of a larger organization.

Key traits of successful innovation teams:

• Ability to create "reality distortion fields" and inspire others
• Relentless pursuit of goals and resilience in the face of setbacks
• Market orientation and business model expertise
• Comfort with ambiguity and rapid learning

By fostering these traits, companies can create internal innovation ecosystems that rival the dynamism of startups.

8. Implement Metered Funding and Innovation Metrics

In innovation, the main task is not to measure if you are on time and on budget, which are key metrics in an execution project. In innovation and exploration it is crucial to measure whether you are reducing the risk and uncertainty of new business ideas before you invest big and scale.

Venture capital approach. Invincible Companies adopt a metered funding approach similar to venture capital firms. Instead of allocating large budgets upfront, they provide small investments to test initial hypotheses, then increase funding as evidence of success accumulates.

Innovation-specific metrics:

• Risk and uncertainty reduction
• Expected profitability
• Learning velocity
• Cost of experimentation

By focusing on these metrics rather than traditional execution-oriented KPIs, companies can make more informed decisions about which innovation projects to pursue and scale.

9. Create Legitimacy and Power for Innovation

To have an impact, innovation needs to feature in the organizational chart and at the very top.

Structural support. Invincible Companies ensure that innovation has legitimacy and power within the organization. This often involves creating high-level positions dedicated to innovation and exploration, such as a Chief Entrepreneur or Chief Innovation Officer who reports directly to the CEO or board.

Key elements:

• Innovation representation at the executive level
• Clear policies for collaboration between core business and innovation teams
• Access to resources and support from existing business units
• Reward systems that recognize and incentivize innovation efforts

By elevating the status of innovation within the organization, companies can overcome internal resistance and create the conditions necessary for transformative ideas to flourish.

Last updated: October 3, 2024