Zone to Win: Organizing to Compete in an Age of Disruption

119 Pages·2015·0.76 MB·English

by  Moore

Zone to Win
Organizing to Compete in an Age of Disruption
Geoffrey A Moore
Copyright
Diversion Books
A Division of Diversion Publishing Corp.
443 Park Avenue South, Suite 1008
New York, NY 10016
www.DiversionBooks.com
Copyright © 2015 by Geoffrey A. Moore
All rights reserved, including the right to reproduce this book or portions thereof
in any form whatsoever.
For more information, email [email protected]
First Diversion Books edition November 2015
ISBN: 978-1-68230-170-8
To Noah Oak and the next generation
Table of Contents
Dedication
Foreword
Preface
CHAPTER ONE: A Crisis of Prioritization
Catching the Next Wave
Coping with the Next Wave
A New Playbook
CHAPTER TWO: The Four Zones
The Performance Zone
The Productivity Zone
The Incubation Zone
The Transformation Zone
Zone Management
CHAPTER THREE: The Performance Zone
Governance
Playing Offense in the Performance Zone
Playing Defense in the Performance Zone
Faults and Fixes
Concluding Remarks
CHAPTER FOUR: The Productivity Zone
Managing End of Life Programs—A New Centrally Funded Shared Service
Governance
Playing Offense in the Productivity Zone
Playing Defense in the Productivity Zone
Faults and Fixes
Concluding Remarks
CHAPTER FIVE: The Incubation Zone
Governance
Playing Offense in the Incubation Zone
Playing Defense in the Incubation Zone
Faults and Fixes
Concluding Remarks
CHAPTER SIX: The Transformation Zone
Governance
Playing Offense in the Transformation Zone
Playing Defense in the Transformation Zone
Faults and Fixes
Concluding Remarks
CHAPTER SEVEN: Installing Zone Management
Concluding Remarks
CHAPTER EIGHT: Zoning to Win at Salesforce and Microsoft
Playing Zone Offense: The Example of Salesforce
Initial State
What Changed
Playing Zone Defense: The Example of Microsoft
The Trouble Microsoft Finds Itself In
Microsoft Knows How to Play Defense
Concluding Remarks
Acknowledgments
Connect with Diversion Books
Foreword
In 2013, Geoff was drafting the third edition of his classic book Crossing the
Chasm, and he asked me about using Salesforce to illustrate some of his
management principles. Many of the companies cited in the first and second
editions of the book were no longer around. I was excited that Salesforce would
be part of the updated book, but I also shared with Geoff that we were struggling
to stay agile and focused as we grew very fast and expanded our portfolio of
products. Salesforce was the leading customer relationship management
platform, but internally we had developed too many conflicts and were getting
pulled in too many directions. We were growing fast and innovating at a rapid
pace, but we didn’t have a handle on how to organize ourselves in ways that
optimized for both established business units and new investment areas.
Geoff agreed to interview key managers on our teams to diagnose what was
causing our dysfunction and suggest solutions. During the process, he came up
with the concept of zone management. It’s a deceptively simple and powerful
model for resolving conflicts and accelerating business transformation.
Zone management is about dividing and conquering, establishing
independent zones, each with what at Salesforce we call a V2MOM—Vision,
Values, Methods, Obstacles, and Measures. Disruptive innovation—incubating
or scaling new products or business opportunities—must be segregated from
sustaining innovation—making improvements to existing entities. And, revenue
performance—financial commitments from the more established parts of the
business—must be separated from enabling investments—funding and
resourcing new product and businesses opportunities. The zones act in parallel
and interoperate with each other, but not in lockstep.
By looking at Salesforce through the lens of zone management, Geoff helped
us improve our ability to execute in many phases of our business. Following our
engagement, Geoff continued to flesh out the zone management concept,
working with leaders at Microsoft to add the perspective of a forty-year-old
company that was dealing with far more complexity. The end result is Zone to
Win: Organizing to Compete in an Age of Disruption.
For any company, regardless of size or industry, Zone to Win is the playbook
for building enterprises that reach escape velocity—orienting to the future and
avoiding the inertial pull of the past. It’s the playbook for not just surviving but
succeeding in today’s disruptive, connected, fast-paced business world.
Marc Benioff, Chairman and CEO, Salesforce
August 2015
Preface
Zone to Win is the seventh, and with any luck the last, in a sequence of books
about the impact of disruptive technology on business strategy and company
valuations. The series began with Crossing the Chasm, first published in 1990.
That book addressed the market development challenges venture-backed startups
face when trying to grow beyond an early-adopter customer base and win
mainstream customers. Its lessons have stood the test of time, with more than a
million copies sold worldwide and a third edition with all new case examples
released in 2014.
In 1995 Crossing the Chasm was followed by Inside the Tornado, which
focused on the winner-take-all competitions that unfold when disruptive
technologies are mature enough to displace their incumbent predecessors. It in
turn was followed by The Gorilla Game, coauthored with Tom Kippola and Paul
Johnson in 1998, which focused on the implications of tornado dynamics for
company valuations that were at the time eye-popping, to say the least. This was
the era of the dot-com bubble, or as my colleague Paul Wiefels likes to call it,
the Time of the Great Happiness. It all ended in 2001.
With the bursting of the dot-com bubble, the focus of my consulting shifted
to established enterprises (the ones left standing!) and how they might expect to
engage with these same market dynamics. This led to a shift in perspective from
that of the disruptor to that of the disruptee. It also led to a second sequence of
three books, each presenting a set of frameworks to help guide management
through challenging times. They included the Core/Context framework from
Living on the Fault Line, the Return on Innovation framework from Dealing
with Darwin, and the Hierarchy of Powers framework from Escape Velocity. All