Online retailing and the personal computer revolution would have happened even if Bezos,

Gates and Jobs had never been born. These developments occurred around the end of the twentieth century because all the necessary pieces of collective knowledge and collective intelligence were then developed. These individuals and their associates pieced together relevant capabilities. When innovative firms succeed, as Amazon, Microsoft and Apple did but most new firms do not, it is because of the distinctive character of the capabilities of their organisation and the combinations they put together.

Terry Lundgren ran into stiff resistance while executing his strategic plan in the years of his Reinvention stage. As noted earlier, he was appointed CEO of Federated Department Stores in 2003 with the express mandate to make bold moves to expand the business. After just three months at the helm, Lundgren faced a golden opportunity: purchasing the legendary Marshall Field’s chain. The acquisition would take the company a grand leap forward, and he would become the steward of another of the nation’s most beloved retail brands.

The CEOs who are most successful in this middle stage come to understand that they won't be able to lead the transformation envisioned for the company without a personal transformation. Larry Merlo had never spearheaded strategy. Terry Lundgren came up in retail as a master of in-store merchandising, with no experience in online sales or in technology generally.

In the year ahead, he surveyed the broader employee base as well as customers and learned that “we didn’t have that same emotional connectivity with our guests.” Or with Hyatt colleagues out on the front lines. Hoplamazian dedicated time to meeting with many of them. Through his own and others’ probing into the colleague experience, he realized that the company evaluated employees largely based on their compliance with an elaborate set of rules and that “we tracked success in our hotels by compliance with a list of brand standards, not guest feedback.

He was curious about why Crocs wanted PE investment, given that the company was actually well financed, with strong cash flow. “They knew Crocs needed a strategic change,” he recalled, “and they felt that the best way to set the company on a positive new trajectory was to seek a minority investor from the private equity community.” Sales of the distinctive colorful clogs had been slumping, and the share price had been pummeled. Some industry arbiters thought the quirky brand had peaked, proving to be a trendy flash in the pan.