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Second-wave companies are in the business of getting bigger. Size is their religion. Third-wave companies are more interested in finding a better way.

This leads to a primary third-wave goal: to make yourself and your own products obsolete. No one should be more competent at that than you. Our Macintosh replaced the Lisa; Apple IIgs was designed to replace the earlier Apple IIs. What we do is find ways to give people a growth path * upgrade * to the next product, to the future, not abandon customers who have bought the now-obsolete product. The way we renew ourselves is to supply our customers with meaningful differences. In second-wave companies, the product objective is generally meant to give customers better sameness * an improved version of their same old product.

This is a very contrarian's idea. Second-wave companies* do everything they can to defend what is already theirs. They will spend more and more money to do so or acquire a company to control the competition.

Second-wave people are motivated by promotion, salary, and bonuses. Third-wave people are motivated by commitment to an ideology, by the chance personally to change the world, the chance to grow as a person. The second-wave company does not offer this as a possibility, not in the promise of lifetime employment and the lure of a pension. As a result, third-wave people are more likely to take risks, to court failure. They are playing according to a different standard * their own, not the company*s. Their attitudes are based on the possible rather than the actual. They must, as a result, be given high rewards for their high risk, especially in stock options.

In this new wave, quality takes on a broader definition. It doesn*t apply only to the product; instead, quality is pervasive throughout every part of the organization. Quality, without compromise, is expected in every function and every department, from finance to sales. It's everyone's job. And it's defined by anyone who wants to compete * not just who is bigger and has more clout.

That's one of the reasons why so many American companies fell into trouble. They measured quality in terms of what was affordable, rather than insisting upon perfection at the start. The proof of this is in some of the gains traditional corporations have registered in quality since the early 1980s; the increases are shocking not for their improvement but because thy reveal how bad things actually had got.

So what does all this mean? The differences between second- and third-wave companies required vast revolutions in attitude and behavior. These differences are worth nothing during the time of transition we are in currently. The third wave is a model we would do well to being implementing.