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

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The perennial challenge for the Productivity Zone is to manage the tensions among its three core deliverables—compliance, efficiency, and effectiveness—without subordinating any one of them to the other two. This becomes even more challenging during a period of technology disruption because the Performance Zone heightens its demands for both efficiency and effectiveness while bridling at constraints imposed in support of compliance. Shared services organizations which have gotten comfortable, not to say complacent, during a less stressful period are often bewildered by these new circumstances and wonder how much they really ought to change. Well, as Deming once said, “Change is not necessary because survival is not mandatory.” If the enterprise is going to survive a disruption to its sector, the Productivity Zone is going to need a new playbook as well.

Entry into the incubation zone proper, by contrast, requires making a credible claim to becoming the next big franchise. No established enterprise can reasonably expect to change its core business model, ever. So what must you do instead to prevent the next wave from catching you? Two things, actually: (We call this playbook zone management) In fact, the best way for a company to grow rapidly is to introduce a new product or service that turns an industry on its head: consider the innovations of online marketing, cloud computing or electric vehicles. When the company decides to play offence, one idea from the incubation zone is sent to the transformation zone for scaling and thereby disrupting competitors. When playing defense, ideas from the incubation zone will be used in the performance zone to protect current lines of business from disruption. Specifically, what zone management ensures is that resource allocation, return on investment, organizational structure, operating cadence, success metrics, and management compensation all get aligned with the priorities and deliverables unique to each of the four zones…"

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This is indeed a sad state of affairs. To remediate it there are three essential steps that must be taken:

Well structured – You’ll find this to be particularly well organized to support its reception or application. Over the last 25 years, Geoffrey Moore has established himself as one of the most influential high-tech advisors in the world—once prompting Conan O’Brien to ask “Who is Geoffrey Moore and why is he more famous than me?” Even from such a cursory review of these four zones, it should be clear that their individual goals, objectives, and methods are so diverse that any set of management methods creating success in one zone is likely to cause failure in the other three. That is why it is so important to keep them separate. At the same time, all four need to work in tandem to make the corporation go. Here’s what a successful Zone Offense looks like:When successful at scale, it should represent a net new line of business for the enterprise, as opposed to an adjacency to an existing line of business. The book describes a very clear and concise way a methodology to structure companies according to those disruptions, which he calls the "zone management". Even if you are not under a current threat of disruption, you need to assume you will be soon and use the intervening period to get yourself into fighting shape.” In the incubation zone you are not just funding R & D engineering — you’re funding entire companies. For beginners – You’ll find this to be a good primer if you’re a learner with little or no prior experience/knowledge.