The Three Tensions

Based on a detailed analysis of 1,000 large corporations across the world over the past two decades, a survey of over 200 executives and in-depth interviews of twenty CEOs, the authors of this book note that most companies are confronted with the same dilemmas. All have trouble addressing three contradictory challenges, namely, simultaneously growing revenues and profits, managing the short and the long term, and defending both collective and individual interests.
These three ""strategic tensions"" thus appear very difficult to surmount, and most leaders admit that they continuously oscillate between two contradictory objectives, rather than try to reconcile them.
Yet, precisely those companies that manage to do this are the top performers, as shown by the detailed study findings presented in chapter 1. The authors have defined a measure of the capacity to attain two contradictory objectives in a given year, and estimate the “batting average"" of each company, that is, the number of years over the twenty-year reference period in which both objectives were attained. They note that the better the “batting average” a company has, the better it performs and the higher the return it offers to shareholders. Although some industries are generally in a better position than others, the ability of companies to find ways to combine these contradictory objectives is what makes the difference.
The three central chapters of the book each concern one of the dilemmas to resolve and underline possible ways to reconcile them, based on examples of companies such as Alcan, BP, Barclays, Gillette, Nokia, etc. Chapter 3, more specifically covers the revenues versus profit dilemma, and emphasizes the importance of never losing sight of the customer advantage, whether a company wants to optimize growth or profitability.