Executives are navigating challenging times marked by a confluence of factors including geopolitical crises, raw material price shocks, inflation, digitalization, the emergence of disruptive business models and the ongoing struggle for talent. These dynamics increasingly strain classical business models, prompting executives to reevaluate their sustainability and effectiveness both in terms of revenue generation and margin preservation. Leaders should be asking themselves: Where will our future growth originate, and how can margin erosion effectively be stopped along the way?

Too many companies are failing to innovate. One reason, say the authors, is the polarized approach companies take to innovation. At one end of the spectrum, corporate R&D efforts tend to focus on product refreshes and incremental line upgrades that generate modest growth for lower risk. At the other end, venture capitalists favor high-risk “transformational” innovations that seek to upend industries and generate outsize returns. But there’s a better, middle, way.

Traditionally, the most reliable way for a firm to find its next wave of growth was to apply the capabilities of its core business in an adjacent market. But recently a new pattern has begun to emerge. More firms are learning the art of building large second cores—what Bain’s Zook and Allen call engine twos. Given that in the past five years, 60% of big public companies have seen their growth stall out or stagnate—often because of technological disruption—finding an engine two has become increasingly imperative.

Gamification was always just behaviorism dressed up in pixels and point systems. Why did we fall for it?

As market dynamics evolve and technology advances at breakneck speed, companies are under increasing pressure to stand out from the crowd through exceptional innovation. They’re expected to identify high-value inventions or market opportunities—and then find ways to launch new products, services, features, and experiences that capitalize on them.

Those that do so and become leaders in innovation are able to improve near-term performance and lay the foundation for future success.

Firing up new engines of growth is never easy. The best time to do it might be when times are tough.

Weaving design into a strategy can supercharge launching new businesses and pave a path to resilience.

Yes, incumbents can win the future by owning the next horizon of innovation.

It’s mastering the “extrapolation” stage when start-ups begin to focus on profitability, not just growth.