A. Build a portfolio of new strategic options. Without a lot of exciting new options, managers will inevitably opt for more of the same. That’s why renewal depends on a company’s ability to generate and test hundreds of new strategic options. There’s a power law here: Out of 1,000 crazy ideas, only 100 will merit serious consideration. Of those, only 10 will be worth a serious investment, and out of that modest bundle, only 1 or 2 will have the power to transform a business or spawn a new one. Google gets this. Within its core search business, the company tests more than 5,000 software changes a year, and implements around 500—this according to BusinessWeek. The fact that Google has thus far managed to maintain its overwhelming lead in online search is in large part the result of this blistering pace of innovation. In the end, the pace at which Google, or any other company, is able to adapt and evolve is a function of the number of new strategic options that it is able to generate and test.

B. Build a magnet for great ideas. In the quest to expand the option set, it’s important to cast the innovation net as broadly as possible. IBM did this in 2006 when it hosted a worldwide Innovation Jam.  The online conversation was designed to help IBM identify new ways of using its resources to help address some of the world’s toughest challenges. More than 150,000 experts, vendors, employees and clients participated in two 72-hour brainstorming sessions that generated 46,000 postings. IBM distilled this torrent of ideas into ten major new growth initiatives, and set aside $100 million to pursue them. Dell* has done something similar with Ideastorm, a website, where customers post suggestions for new features, products and services. The battle for renewal is, at least in part, a battle to capture more than your fair share of the world’s great ideas.

C. Minimize the cost of experimentation. A company can’t explore a lot of new options if it costs millions of dollars (or even thousands) to test each one. Problem is, big companies aren’t very good at quick-and-dirty. Yet to outpace change, every organization is going to have to master the art of rapid prototyping. Here the goal is to maximize the ratio of learning over investment–to find the sweet spot of demand for a new product, or perfect a nascent business more rapidly and inexpensively than your competitors. Listen to Google’s CEO, Eric Schmidt, on this point: “Our goal is to have more at bats per unit of time and money than anyone else.” Your goal should be the same.

For now, a question: What’s the one thing your company could do to lessen the gravitational pull of the past?

– Gary Hamel