Destructive Recreation

B. Joseph Pine II
Strategic Horizons LLP
bjp2@StrategicHorizons.com
@joepine

© 2014 Strategic Horizons LLP

Economies evolve, produce
wealth, and remain vital when the
process of ever-changing
markets, offerings, and
enterprises “incessantly
revolutionizes the economic
structure from within, incessantly
destroying the old one,
incessantly creating a new one.”

“This process of Creative

Destruction is the essential fact
about capitalism.”

Source: Joseph A. Schumpeter, Capitalism, Socialism, & Democracy,

Third Edition (New York: Harper Perennial, 1950), pp. 81-86.
 Destructive Recreation
We used to think. . . Now we must. . .
∞ goods and services were ∞ stage experiences and
enough guide transformations

© 2014 Strategic Horizons LLP

 The Progression of Economic Value

Transformations
Customization Guide
Experiences
Customization Stage
Services Commoditization
Customization Deliver
Goods Commoditization
Make

Commodities Commoditization
Extract

© 2011 Strategic Horizons LLP

 Destructive Recreation
We used to think. . . Now we must. . .
∞ goods and services were ∞ stage experiences and
enough guide transformations

© 2014 Strategic Horizons LLP

 Destructive Recreation
We used to think. . . Now we must. . .
∞ goods and services were ∞ stage experiences and
enough guide transformations
∞ we could invent great ∞ mass customize &
products & mass produce constantly renew our
them for years offerings

© 2014 Strategic Horizons LLP

 The Old Competitive Reality

Dynamic

Process Change

Dynamic Product
Change Invention

Develop

Stable Product Mass


Change Production

Stable 

Process Change

© 1993 Strategic Horizons LLP Source: Bart Victor, Andrew C. Boynton, and B. Joseph Pine II
 The New Competitive Reality

Renew
Mass
Dynamic Invention
Customization

Offering
 Develop Modularize

Change
Mass Continuous
Stable Production Improvement
Link
Stable Dynamic
Process Change
© 1993 Strategic Horizons LLP Source: Bart Victor, Andrew C. Boynton, and B. Joseph Pine II
 The New Competitive Reality

Renew
Mass
Dynamic Invention
Customization

Offering
 Develop Modularize

Change
Mass Continuous
Stable Production Improvement
Link
Stable Dynamic
Process Change
© 1993 Strategic Horizons LLP Source: Bart Victor, Andrew C. Boynton, and B. Joseph Pine II
 The Progression of Economic Value

Transformations
Customization Guide

n
tio
Experiences
Customization Stage

a
iz
Services Commoditization
Customization al Deliver
du
Goods Commoditization
Make
vi
di

Commodities Commoditization
In

Extract

© 2011 Strategic Horizons LLP

 Destructive Recreation
We used to think. . . Now we must. . .
∞ goods and services were ∞ stage experiences and
enough guide transformations
∞ we could invent great ∞ mass customize &
products & mass produce constantly renew our
them for years offerings

© 2014 Strategic Horizons LLP

 Destructive Recreation
We used to think. . . Now we must. . .
∞ goods and services were ∞ stage experiences and
enough guide transformations
∞ we could invent great ∞ mass customize &
products & mass produce constantly renew our
them for years offerings
∞ materiality conferred ∞ embrace digital
advantage technology

© 2014 Strategic Horizons LLP

 The Known Universe
(Actual Events)
Time
Matter!
(Material
Substances)

No-Space! !Space
(Virtual Places) (Real Places)

No-Matter
(Digital
Substances)
!
No-Time
(Autonomous Events)

© 2011 Strategic Horizons LLP

 The Multiverse
(Actual Events)
Time
Matter!
(Material
Substances)

No-Space! !Space
(Virtual Places) (Real Places)

No-Matter
(Digital
Substances)
!
No-Time
(Autonomous Events)

© 2011 Strategic Horizons LLP

 Destructive Recreation
We used to think. . . Now we must. . .
∞ goods and services were ∞ stage experiences and
enough guide transformations
∞ we could invent great ∞ mass customize &
products & mass produce constantly renew our
them for years offerings
∞ materiality conferred ∞ embrace digital
advantage technology

© 2014 Strategic Horizons LLP

 Destructive Recreation
We used to think. . . Now we must. . .
∞ goods and services were ∞ stage experiences and
enough guide transformations
∞ we could invent great ∞ mass customize &
products & mass produce constantly renew our
them for years offerings
∞ materiality conferred ∞ fuse the real with the
advantage virtual

© 2014 Strategic Horizons LLP

 The Multiverse
(Actual Events)
Time
Matter!
(Material
Substances)

No-Space! !Space
(Virtual Places) (Real Places)

No-Matter
(Digital
Substances)
!
No-Time
(Autonomous Events)

© 2014 Strategic Horizons LLP

 Destructive Recreation
We used to think. . . Now we must. . .
∞ goods and services were ∞ stage experiences and
enough guide transformations
∞ we could invent great ∞ mass customize &
products & mass produce constantly renew our
them for years offerings
∞ materiality conferred ∞ fuse the real with the
advantage virtual

© 2014 Strategic Horizons LLP

 Destructive Recreation
We used to think. . . Now we must. . .
∞ goods and services were ∞ stage experiences and
enough guide transformations
∞ we could invent great ∞ mass customize &
products & mass produce constantly renew our
them for years offerings
∞ materiality conferred ∞ fuse the real with the
advantage virtual
∞ the way to manage was to ∞ adopt a way of managing
optimize the enterprise with the intent to vitalize
the enterprise

© 2014 Strategic Horizons LLP © 2014 Create Advantage, Inc.

To withstand the Schumpeterian
gale of creative destruction, the
enterprise must be “destructively
recreating itself over and over
again by innovating within the
enterprise at least as much as is
going on in its ecosystems.
Anything less and the enterprise
will eventually get blown over by
others moving faster, operating
better, and creating greater
value.”

Source: Kim C. Korn & B. Joseph Pine II, The Laws of Managing
(Indianapolis: Dog Ear Publishing, 2014), p. 47.
 Enterprise Trajectories

Leading Creative Destruction

+
Enterprise Vitality
Relative to its Ecosystems
Regenerative
Trajectory

Ambient
Thriving
Level Failing
Dege
n
Traje erative
ctorie
s

- Trailing Creative Destruction

© 2014 Create Advantage, Inc.

The Law of Vitality
Only the enterprise that attains
vitality, through its incessant
destructive recreation, produces
the wealth necessary to survive.

Source: Kim C. Korn & B. Joseph Pine II, The Laws of Managing
(Indianapolis: Dog Ear Publishing, 2014), p. 47.
Destructive Recreation

Ecosystems
Enterprise
CREATION

DESTRUCTION

CREATION

DESTRUCTION

© 2014 Create Advantage, Inc.

 Destructive Recreation
We used to think. . . Now we must. . .
∞ goods and services were ∞ stage experiences and
enough guide transformations
∞ we could invent great ∞ mass customize &
products & mass produce constantly renew our
them for years offerings
∞ materiality conferred ∞ fuse the real with the
advantage virtual
∞ the way to manage was to ∞ adopt a way of managing
optimize the enterprise with the intent to vitalize
the enterprise

© 2014 Strategic Horizons LLP © 2014 Create Advantage, Inc.

 Destructive Recreation
We used to think. . . Now we must. . .
∞ goods and services were ∞ stage experiences and
enough guide transformations
∞ we could invent great ∞ mass customize &
products & mass produce constantly renew our
them for years offerings
∞ materiality conferred ∞ fuse the real with the
advantage virtual
∞ the way to manage was to ∞ adopt a way of managing
optimize the enterprise with the intent to vitalize
the enterprise

© 2014 Strategic Horizons LLP © 2014 Create Advantage, Inc.

Destructive Recreation

B. Joseph Pine II
Strategic Horizons LLP
bjp2@StrategicHorizons.com
@joepine

© 2014 Strategic Horizons LLP