Zone To Win

For most of my career I have been known as the author of Crossing the Chasm, a playbook for navigating the Technology Adoption Life Cycle, one that has had proven success and maintained its relevance over multiple decades.  That said, despite all the coaching that I and the Chasm Group could provide, established enterprises still struggle to implement the chasm-crossing playbook.  It’s not that they don’t get it.  It’s that it runs counter to so much of their default operating model.

I mean, it is one thing to cross the chasm when you have nowhere else to go.  That is why start-ups were not struggling with the playbook.  But established enterprises have all kinds of uses for their working capital, and when you match these up against a chasm-crossing business plan, the latter can look somewhat anemic.  Couple that with a sales force that is trying to make a big number, and the idea of focusing on a niche market becomes even less attractive.  And yet everybody knows that if they don’t catch the next wave soon, they are likely to find that wave catching them later.

It’s a real pickle—what is one to do?

That was the genesis of Zone to Win.  When I sat down to write it, I was fortunate enough to be working at the time with management teams at Microsoft led by Qi Lu and Satya Nadella, and at Salesforce, led by Marc Benioff—two iconic companies that had no intention of letting the next wave pass them by.  What became clear in both cases is that the operating model for running an established line of business based on sustaining innovation is incompatible with the one needed to launch a new line of business based on a disruptive innovation.  They must be managed separately, and that was where the idea of zones came from.

Looking at things through the lens of zones, it turned out what was needed was not two but four operating models, two each for sustaining and for disrupting.  To sustain the established lines of business, you need a Performance Zone, where you engage with supply chains and customers to make what you sell and sell what you make, and a Productivity Zone, to host all the shared services behind the scenes that enable the Performance Zone to operate efficiently and in compliance with regulatory requirements.  The first is quarterly results driven, the second, process quality oriented.  Each needs the other although they often squabble because their priorities are conflicted.

To launch the disruptive lines of business, by contrast, the two zones you need are an Incubation Zone, where you can explore next-generation innovations with a start-up mindset operating under a VC governance model, and a Transformation Zone, where the entire company aligns around the CEO to execute a massive change, the way Microsoft was able to do with cloud computing, the way Salesforce is doing today with agentic AI.

Zone to Win is a playbook for organizing the enterprise around these four zones.  Each zone has its own operating model, its own key performance indicators, and its own objectives and key results.  Each of these operating models supports success in the zone for which it is intended but leads to failure if it is applied to any of the other three zones.  Each zone also has its own ROI, calling for allocating the annual at the zone level first, and then competing for budget within zones, never across zones.  Finally, each zone rewards a different culture, responds to different incentives, and calls for a different style of leadership.

Daunting as this may sound, it can all be sorted out pretty straightforwardly provided one pays attention to it.  What is less straightforward are the transitions between zones.

When does a line of business graduate from the Incubation Zone?

Does it have to go through the Transformation Zone to exit, or could there be a “Transition Zone” that eases it into the Performance Zone?

And when an established product line approaches end of life, should it stay in the Performance Zone or be transitioned to the Productivity Zone?

These are the kinds of questions that are keeping me active as an advisor.

Taken all in, Zone to Win is a playbook for keeping established enterprises vital.  The US has been fortunate to have hosted the majority of global leaders in high tech since the industry’s inception.  It is a testimony to a national culture that accepts failure, incorporating it into the mantra, Win or learn!  But success can breed complacency, and there are plenty of other nations that would love to knock us off our perch.  The world needs ongoing innovation to address an ever-increasing set of challenges, and these need to deploy at scale.  That is what established enterprises are best at doing.  We need to keep the current set in play.