supply chain eciencies, and so on), and Horizon Two innovation (satisfying the needs of existing customers with new products). The ones that are going to stay in business are now acting like startups by delivering what McKinsey 30 years ago called the third horizon of innovation—i.e., disruption. Apple, the computer company, getting into music. Amazon, the ecommerce company, buying Whole Foods. Large corporations have great managers dealing with Horizon One and Two types of innovation. The problem is they are facing continuous disruption; they have Horizon Three problems now, but the wrong leadership to deal with them. If you got your MBA more than three years ago, everything you know about innovation is obsolete. For the first time in the history of corporations, [established] companies are not setting the rules. The rules are changing rapidly. That’s why you see all this M&A activity and people just trying to figure out what the new rules are. There is probably more innovation and creative disruption right now of corporations since maybe in the gilded age in the U.S. [the late 1800s]. TCS: So largely speaking, how have large companies reacted to the lean startup ideas since you started publishing them? Blank: Between my work and Eric Ries’ work [who in his book wrote about their application at GE and Procter & Gamble], there has been recognition and adoption at various levels. But it’s hard to turn super tankers. Remember, large corporations can innovate not only by using lean methodologies to build internal innovation; they can also buy companies.