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The Idea in Brief

It’s hard to know when your core business must change. Some companies cling too long to their cores, even in the face of crushing competition. Others, lured by hot new markets, abandon their core prematurely—with devastating results.

There is a smarter approach, says Zook. First, recognize when it’s truly time to find a new core. For example, perhaps your growth formula no longer works because your target market is saturated. Then, examine your company’s hidden assets—neglected businesses, unexplored customer insights, latent capabilities. Ask how they can help you define a new core that will propel fresh growth. For instance, American Express transformed its ailing core charge-card business after discovering neglected data showing how different customer segments used the cards and what other products might interest them.

By redefining your core at the right time and in the right way, you boost the odds of profiting from change—before rivals do.

Read the full article on Harvard Business Online.