6. Establish the Three-Year Stretch to Balance Stability and Renewal

In a flat world, companies need the flexibility to respond quickly to changes, but they also need enough stability so that managers can tell whether they are succeeding or failing. How can companies balance stability and renewal? For Li & Fung, it meant recognizing the combined wisdom of Western planning, stretch goals, and the fixed plans of China’s centrally planned economy.

Almost monthly, Spencer Fung, who runs the Gymboree business at Li & Fung, rearranges its organizational charts and the desks and cubicles in his division. In pursuit of stretch goals that are part of the overall company’s three-year plan, there is no standing still. Industry and customer demands shift ...

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