Why companies fails? This is a hard question to answer. In this TED video Knut Haanaes explain two critical concepts, exploration and explotation, to avoid companies to fail.
Exploration: coming up with what’s new, search, discover, new products, changing our frontiers. Exploration is risky. Long term perspective for companies.
On the other hand, Explotation: taking the knowledge we have and making good, better. Explotation /= risky. Short term perspective.
Only around 2% of firm mix exploitation and exploration.
How to applied these two concepts? Follow:
Mr. Haanaes has write a book about strategy. Amazon – Your Strategy Needs a Strategy: How to Choose and Execute the Right Approach.