Bureaucracy Must Die

Almost 25 years ago in the pages of HBR, C.K. Prahalad and I urged managers to think in a different way about the building blocks of competitive success. We argued that a business should be seen as a portfolio of "core competencies" (http://hbr.org/1990/05/the-core-competence-of-the-corporation/ar/1) as well as a portfolio of products. By building and nurturing deep, hard-to-replicate skills, an organization could fatten margins and fuel growth. While I still believe that distinctive capabilities are essential to distinctive performance, I have increasingly come to believe (as I argued in an earlier post (http://blogs.hbr.org/2014/10/the-core- incompetencies-of-the-corporation/) ) that even the most competent organizations also suffer from a clutch of core incompetencies. Businesses are, on average, far less adaptable, innovative, and inspiring than they could be and, increasingly, must be.