One-page summary · 2 min read
Dual Transformation
How to Reposition Today's Business While Creating the Future
by Scott D. Anthony, Clark G. Gilbert, Mark W. Johnson
The big idea
Companies facing disruption shouldn't choose between defending their current business and building a new one -- they need to run both transformations simultaneously, repositioning the core for resilience while separately building a new growth engine, connected by a shared capabilities link.
Transformation A repositions the core business to maximize its resilience as its industry shifts, reallocating investment even if it means cutting product lines. Transformation B builds a new, separate growth engine based on a genuinely different business model, run outside the core organization's existing structure and metrics. The capabilities link is the deliberate mechanism connecting the two -- identifying which hard-to-replicate assets from the core can accelerate Transformation B without letting B's different pace destabilize A.
Because the framework requires running two very differently-paced organizational efforts at once with real executive attention split between them, under-resourcing either side is a common failure mode the book flags but doesn't fully solve for resource-constrained companies.
Key ideas
Repositioning is not retreat
Transformation A is framed as proactively reallocating a still-valuable core business's resources toward its most durable segments, not managing decline.
Structural separation for Transformation B
New-growth efforts need their own metrics, incentives, and often physical separation from the core to avoid being judged by the wrong yardsticks.
The capabilities link as competitive moat
The specific assets transferred between A and B are what make dual transformation defensible rather than just running two unrelated businesses.
Sequencing and timing
Waiting until the core business visibly declines to start Transformation B is typically too late, given how long new engines take to reach scale.
Leadership's split-attention problem
CEOs must personally sponsor both transformations, since middle management alone can't resolve the resource conflicts between them.
Case-based validation
Drawing on real companies (Adobe, Netflix's shift from DVD to streaming) rather than purely theoretical modeling.
Try it this week
- List which parts of your current core business deserve more investment vs. which are candidates for reduction, as a first Transformation A pass.
- Identify one nascent growth bet currently being evaluated by the same metrics as the core business, and propose separate success metrics for it.
- Name one hard-to-replicate asset your core business has that a new-growth effort could legitimately borrow.
- Set a specific trigger point that would tell you it's time to start a Transformation B effort.
Is it for you?
Best for
- Executives at established, mid-to-large companies facing visible industry disruption who need to fund innovation without abandoning a still-profitable core.
- Corporate innovation and strategy teams looking for a structured model for running an internal venture alongside the main business.
Less useful if
- Early-stage startups or small businesses with no legacy core to reposition.
- Readers wanting quantitative, ROI-driven guidance on how to split limited capital between A and B.