MIT Sloan Management Review Article on Fighting the Gravity of Average Performance

New research shows that market leadership is increasingly temporary. The challenge for companies no longer lies in just getting to the front of the pack — it’s staying there.

Strategy has always been about defying averages — doing something exceptional that earns a company correspondingly exceptional rewards in the market. Today, that is still true, but the relentless churn and volatility in the business environment mean that simply outperforming the average is not enough. Rather, the true test of leadership is continuing to outperform over time.

We recently studied the performance trajectories of 22,000 companies over the last four decades. The results show that across a wide range of metrics, strong performance has become far less sustainable than in the past. Companies that manage to beat the average for their industry must now struggle much harder to maintain their leading position.

About the Author

Martin Reeves is a senior partner at Boston Consulting Group and chairman of the BCG Henderson Institute. Kevin Whitaker is the head of strategic analytics at the BCG Henderson Institute. Tom Deegan is a data scientist at the BCG Henderson Institute.

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