Senior executives at many of the largest corporations around the world have embraced knowledge or learning as part of their long-term vision. A focus on knowledge and learning makes sense: knowledge is increasingly an important source of competitive advantage. However, the business impact of most knowledge management or learning organization programs is modest at best. We estimate that about one-sixth of these programs achieve very significant impact within the first two years; half achieve small but important benefits; and the remaining third -- the failures -- have little business impact. Based on our five years of involvement in knowledge and learning organization programs we believe that effectively managed learning can have a significant strategic impact on most companies within the first two years. The purpose of this article is to provide C.E.O.'s with sufficient guidance to lead and manage learning and to insure that their organizations achieve significant strategic benefits quickly.

What does it take to grow shareholder value at world-class rates? For many years companies have successfully focused their efforts on cost reduction through increased labor and asset productivity and have achieved short-term increases in shareholder value as a reward. Today, with their businesses re-engineered and running efficiently, these companies have refocused their energies into developing long-term growth strategies. Aggressive revenue-oriented strategies are the most common approach to creating long-term value for shareholders. These strategies typically include acquisitions, new products that extend the line and marketing programs to improve customer loyalty and retention. Unfortunately, our research indicates that these strategies can cause more harm than good because superior long-term value for shareholders results only from a specific type of revenue growth: growth that results when a company delivers an order-of- magnitude increase in value to its customers (what we call "10X value").

Dismissing the conventional wisdom linking revenue growth and shareholder value as only partially accurate and potentially misleading, the authors advance preliminary ideas on a new theory of growth - part of an ongoing research effort at Booz-Allen & Hamilton. In fact, they identify two fundamentally different paradigms, calling them Managed-Growth and Innovative-Growth.

The valuation of New Economy players represents a bet by the world's financial markets that a few companies will leverage the Internet to fundamentally change the competitive game in their industries. It is a gamble that powerful, low-cost business models will emerge; that new businesses will rise from disintermediated value chains, and that some companies will exert such influence that they will generate extraordinary long-term shareholder returns.

We cannot predict the winners of the e-races any more than we could have foreseen in 1948 that the McDonald's Corporation would push the globe into a fast-food frenzy, or in 1975 that the Nucor Corporation would eventually humble Bethlehem, Armco, LTV and Inland. We can be sure that the winners in this race will be few and the losers many; in the races that created the American automotive industry, only three of thousands of startups survived. Hence, even if the world's financial markets are correctly valuing "e" in the aggregate, they are overvaluing most companies - the eventual failures - while significantly undervaluing the few companies that will succeed in changing the world.

By studying the companies that tried to "break out" from the competitive pack and redefine their industries, and then by adapting their experiences to the Digital Economy, we believe we can both understand the rules of this race, and handicap the Dots and established Giants during this current, first leg. Through research of attempted breakouts in 55 industries in the United States from 1965 to 1995, and interviews with 45 successful breakout innovators (i.e., those that have achieved shareholder returns in the top decile over one or more decades) in the United States and Europe, we have identified four rules for breaking out to win an economic race.