1. Find out more about how companies build and leverage differentiating capabilities to create sustainable advantage in Paul Leinwand and Cesare Mainardi, with Art Kleiner, Strategy That Works: How Winning Companies Close the Strategy-to-Execution Gap (Boston: Harvard Business Review Press, 2016). For more on our research on how companies create sustained value, see www.strategyand.pwc.com/gx/en/unique-solutions/capabilities-driven-strategy/approach.html.

2. Shep Hyken, “Customer Loyalty and Retention Are in Decline,” Forbes, October 13, 2019, www.forbes.com/sites/shephyken/2019/10/13/customer-loyalty-and-retention-are-in-decline.

3. Business Roundtable, “Business Roundtable Redefines the Purpose of a Corporation to Promote ‘An Economy That Serves All Americans,’ ” August 19, 2019, www.businessroundtable.org/business-roundtable-redefines-the-purpose-of-a-corporation-to-promote-an-economy-that-serves-all-americans.

4. Ernest Hemingway, The Sun Also Rises (New York: Scribner, 1926).

5. This and other quotations from executives in the companies we studied are from interviews conducted by the authors from 2018 through 2021. Titles are as of spring 2021.

6. “Inditex 1Q20 Sales Drop Limited to 44% Despite up to 88% of Stores Closed,” Inditex.com, June 10, 2020, www.inditex.com/article?articleId=648065.

7. For more on the research behind this approach, see www.strategyand.pwc.com/gx/en/unique-solutions/capabilities-driven-strategy/approach.html.

1. www.philips.com/a-w/research/vision-and-mission.html.

2. “Hitachi’s Challenges,” interview with Hiroaki Nakanishi in Diamond Harvard Business Review, July 2016, https://www.dhbr.net/articles/-/4325.

3. Paul Leinwand and Cesare Mainardi, The Essential Advantage: How to Win with a Capabilities-Driven Strategy (Boston: Harvard Business Review Press, 2011).

4. The right to win is an important concept we described in Leinwand and Mainardi, The Essential Advantage. You can find an exercise that guides you through your right-to-win assessment at www.strategyand.pwc.com/gx/en/unique-solutions/capabilities-driven-strategy/right-to-win-exercise.html.

1. “Komatsu Partners with Propeller,” Modern Contractor Solutions, August 2018, mcsmag.com/komatsu-partners-with-propeller; “Japan’s Komatsu Selects NVIDIA as Partner for Deploying AI to Create Safer, More Efficient Construction Sites,” NVIDIA press release, December 12, 2017; nvidianews.nvidia.com/news/japans-komatsu-selects-nvidia-as-partner-for-deploying-ai-to-create-safer-more-efficient-construction-sites; “Komatsu Partners with Advantech for AIoT Heavy Duty Construction Equipment,” Advantech website, April 1, 2020, www.advantech.com/resources/case-study/komatsu-partners-with-advantech-for-aiot-heavy-duty-construction-equipment; Patrick Cozzi, “Cesium and Komatsu Partner on Smart Construction Digital Twin,” Cesium.com, March 10, 2020, www.cesium.com/blog/2020/03/10/smart-construction/.

2. “The History of Smart Construction,” Komatsu website, October 16, 2019, www.komatsu.eu/en/news/the-history-of-smart-construction; “Everyday Drone Survey,” Komatsu website, https://smartconstruction.komatsu/catalog_en/construction/everyday_drone.html.

3. “Realizing the Safe, Highly Productive and Clean Worksite of the Future: Launch of ‘Smart Construction Digital Transformation,’ ” Komatsu website, March 10, 2020, home.komatsu/en/press/2020/management/1205354_1840.html.

4. “Patient First: How Karolinska University Hospital Is Transforming to Meet Future Demands of Healthcare,” Philips website, www.philips.com/a-w/about/news/archive/case-studies/20190128-patient-first-how-karolinska-university-hospital-is-transforming-to-meet-future-demands-of-healthcare.html.

5. Satya Nadella, Hit Refresh (New York: Harper Collins, 2017), 124.

6. U. N. Sushma, “Titan Opens India’s First Karigar Centre at Hosur to ‘Transform the Lives of Goldsmiths,’ ” Times of India, February 22, 2014, timesofindia.indiatimes.com/articleshow/30810718.cms.

1. Eric Cox, “How Adobe Drives Its Own Transformation,” Adobe Blog, March 17, 2019, theblog.adobe.com/how-adobe-drives-its-own-transformation/.

2. “Digital Transformation Is in Our DNA,” www.adobe.com/ch_de/customer-success-stories/adobe-experience-cloud-case-study.html.

3. Dan Murphy, “Saudi Arabia’s STC Pay Eyes Rapid Gulf Expansion After Billion-Dollar Valuation,” CNBC, November 23, 2020, www.cnbc.com/2020/11/23/saudi-arabias-stc-pay-eyes-rapid-gulf-expansion.html.

4. Paloma Díaz Soloaga and Mercedes Monjo, “Caso Zara: La empresa donde todo comunica,” Harvard Deusto Marketing y Ventas 101 (November–December 2010): 60–68; and Zeynep Ton, Elena Corsi, and Vincent Dessain, “Zara: Managing Stores for Fast Fashion,” case 9-610-042 (Boston: Harvard Business School, rev. January 19, 2010).

1. Jon Katzenbach, Gretchen Anderson, and James Thomas, The Critical Few: Working with Your Culture to Change It (San Francisco: Berrett-Koehler, 2018).

2. The Katzenbach Center, www.strategyand.pwc.com/gx/en/insights/katzenbach-center.html.

3. Katzenbach, Anderson, and Thomas, The Critical Few.

1. William R. Kerr and Alexis Brownell, “Transformation at Eli Lilly & Co. (A),” case 9-817-070 (Boston: Harvard Business School, November 7, 2016).

2. Kerr and Brownell, “Transformation at Eli Lilly & Co. (A).”

3. Doug J. Chung, “Commercial Sales Transformation at Microsoft,” case 9-519-054 (Boston: Harvard Business School Publishing, January 28, 2019).

4. Greg Satell, “The Truth about Diverse Teams,” Inc., April 22, 2018, www.inc.com/greg-satell/science-says-diversity-can-make-your-team-more-productive-but-not-without-effort.html.

5. Lu Hong and Scott E. Page, “Groups of Diverse Problem Solvers Can Outperform Groups of High-Ability Problem Solvers,” PNAS 101, no. 46 (2004): 16385–16389, sites.lsa.umich.edu/scottepage/wp-content/uploads/sites/344/2015/11/pnas.pdf.

6. Satya Nadella, Hit Refresh (New York: Harper Collins, 2017), 81.

1. Tomislav Mihaljevic, “Tiered Teams Solve Problems in Real Time,” Consult QD website, October 5, 2018, consultqd.clevelandclinic.org/tiered-teams-solve-problems-in-real-time/.

2. Satya Nadella, Hit Refresh (New York: Harper Collins, 2017), 104.

3. PwC 24th Annual Global CEO Survey 2021, www.pwc.com/gx/en/ceo-agenda/ceosurvey/2021.html.

4. William R. Kerr and Alexis Brownell, “Transformation at Eli Lilly & Co. (A),” case 9-817-070 (Boston: Harvard Business School, November 7, 2016).

1. Paul Leinwand and Cesare Mainardi, with Art Kleiner, Strategy That Works: How Winning Companies Close the Strategy-to-Execution Gap (Boston: Harvard Business Review Press, 2016), chapter 7.

2. Blair H. Sheppard, Ten Years to Midnight: Four Urgent Global Crises and Their Strategic Solutions (San Francisco: Berrett-Koehler Publishers, 2020).

3. Satya Nadella, Hit Refresh (New York: Harper Collins, 2017), 134.

1. Gary Neilson and Bruce Pasternack, Results: Keep What’s Good, Fix What’s Wrong, and Unlock Great Performance (New York: Crown Business, 2005).