Roger Martin | THE DESIGN OF BUSINESS
“The longer-term effect of the capital markets’ preference for remaining at the same knowledge stage is stagnation. At some point, exploitation activities will run out of steam, and the company will be outflanked by competitors taking more exploratory approaches. Earnings will stop growing or even decline, and the analysts will savage the company for its lack of innovation. As James March points out, “An organization that engages exclusively in exploitation will ordinarily suffer from obsolescence.”