From Two Tracks to Waves of Value

New Waves of Value

“The best way to predict the future is to invent it.”
— Alan Kay

When I first created the Two Track Transformation model, it solved a fundamental problem: how to run your business while changing it simultaneously.

The parallel tracks metaphor helped thousands of leaders visualize this dual mandate.

But as I’ve worked with more CEOs navigating AI-driven disruption, I’ve evolved the model.

While I still think of parallel tracks, I now visualize the core business with a wave of new value creation on top.

I see it as successive waves of value creation, each one a new experiment in finding future business models.

It’s not just “innovation” running alongside, it’s successive waves of value creation in the track above.

Key Takeaways

Think successive waves of experimentation and value creation on top of your core business
Waves create rhythm and portfolio of options, not just a single innovation track
Some waves may enhance your core, others explore entirely new territory
Implement quarterly waves: Launch (Q1) → Build (Q2) → Crest (Q3) → Next Wave (Q4)
Move from single innovation track to multiple concurrent experiments

Overview Summary

The Evolution Two Track Transformation solved how to run and change your business simultaneously through parallel tracks. Waves of Value reveals the next insight: transformation doesn’t run alongside your core—it builds on top of it in successive waves that compound value.

The Framework While Two Track shows Track 1 (Core) and Track 2 (Innovation) running in parallel, Waves of Value visualizes the same concept differently: your core business as a foundation with waves of transformation stacking on top: Modernization → Resilience → New Models. Each wave makes everything below more valuable. It’s not replacing Two Track—it’s another lens for understanding how transformation and core business interact.

The Advantage This stacked approach creates compound returns (not linear improvement), lower risk (building on proven foundations), cultural alignment (enhancement not threat), and customer continuity (evolution not disruption). You move from Bimodal to Multi-Modal operations.

The Implementation Organize transformation in quarterly waves with natural rhythm. Create wave teams that include core business members. Measure both individual wave impact and compound value creation. Your core business becomes the launching pad for infinite innovation.

The Transformation Trap Every Leader Faces

You know the meeting. The board wants aggressive innovation. Your CFO wants predictable returns. Your best operators warn that transformation could break what’s working. Your innovators say incremental change means death by a thousand cuts.

You’ve tried everything:

Innovation labs that create cool demos but never scale
Digital transformation initiatives that become IT projects
Acquisition strategies that destroy value through integration
Separate ventures that compete with your core for resources
“20% time” that becomes 0% time when quarters get tough

Meanwhile, you watch startups with 1% of your resources eat your market share. You see tech giants enter your industry with business models you can’t match. Your best talent leaves for companies that “get it.”

The real trap: Every model you’ve been given forces a false choice:

Protect today’s revenue OR invest in tomorrow
Serve current customers OR explore new markets
Maintain stability OR embrace chaos
Optimize the core OR fund experiments
Think quarterly OR think long-term

Your investors want both. Your customers need both. Your survival requires both.

But everything in your organization—from KPIs to comp structures to meeting cadences—is built for “OR” not “AND.”

This is the transformation trap:

knowing you need parallel paths but having only single-track tools. Two Track Transformation gave you permission to run both.

Now Waves of Value shows you how they amplify each other instead of competing for oxygen.

Understanding New Waves of Value Creation

Track 2 is about exploring and experimenting to create NEW waves of value.

These might be completely separate business models, new markets, different customer segments. They don’t have to build on or compound with Track 1 at all.

Let me be precise about what I mean by “waves of value” in Track 2:

Waves Are Experiments, Not Enhancements Each wave represents a distinct experiment in value creation – a new business model, market, or capability you’re testing. They’re not necessarily building on your core. They might:

Target completely different customers
Use entirely different business models
Compete with your core offerings
Have nothing to do with your existing business

Why Waves Matter The wave metaphor captures what “innovation track” misses:

Rhythm – Waves come in cycles, you launch multiple experiments over time
Portfolio – Multiple waves can be at different stages simultaneously
Learning – Each wave teaches you something, even if it fails
Optionality – You’re creating options for the future, not commitments

The Freedom to Explore Track 2 waves need protection from Track 1 metrics. A wave exploring subscription models shouldn’t be judged by your core’s transaction-based KPIs. A wave targeting Gen Z shouldn’t be constrained by your enterprise customer requirements.

Some Waves Might Amplify, Others Won’t Yes, some waves might modernize or enhance your core – AI augmentation, digital channels, new capabilities. But others might be your next business entirely – different market, different model, different everything. Both are valid Track 2 waves.

The Foundation: Two Track Transformation

Before we explore waves, let’s ground ourselves in the Two Track model:

Two Track Transformation / Bimodal Business

Two Track Transformation

Track 1: Run the Business – Your core business that generates today’s revenue, serves current customers, and maintains operational excellence.

Track 2: Change the Business – Your innovation track where you experiment with new business models, explore new markets, and create future value.

The tracks run in parallel, with different:

Metrics (profitability vs. learning)
Time horizons (quarterly vs. multi-year)
Risk profiles (predictable vs. experimental)
Teams (operators vs. innovators)

This dual-track approach solves the “OR” problem by creating an “AND” architecture.

Now here’s the evolution: Instead of thinking of Track 2 as a single innovation track, visualize it as successive waves of value creation…

The Evolution: From Two Tracks to New Waves on Top

The original Two Track model shows innovation running alongside your core business. This works, but it misses a crucial insight:

Your future business doesn’t just run parallel to your current business—it builds on top of it.

Here’s how I now whiteboard transformation for executives:

The Foundation Layer: Your Core Business

This is your bedrock—the profitable engine that funds everything else. It requires operational excellence, efficiency, and reliability. This isn’t going away. It’s the platform for everything else.

The Transformation Layer: Waves of New Value

On top of your foundation, you create successive waves of value:

Wave 1: Modernization – Update your core with cloud, AI, and digital capabilities
Wave 2: Resilience – Build adaptability and anti-fragility into your operations
Wave 3: New Models – Create entirely new business models and revenue streams

Each wave doesn’t replace what’s below—it amplifies it.

Why Waves Change Everything

The waves metaphor reveals three critical insights that parallel tracks miss:

1. Value Compounds (Sometimes) Some waves of innovation make your core stronger – like AI augmenting your business model or digital transformation amplifying your reach. But other waves explore entirely new territory. The power is in having both options.

2. Timing Becomes Natural Waves have rhythm. Within your innovation portfolio, you might sequence certain waves (can’t digitize before you modernize), while other waves run independently, exploring markets that have nothing to do with your core timing.

3. The Core Never Goes Away Your core provides the funding and stability for exploration. Whether waves enhance it or explore beyond it, the foundation remains your economic engine. Your accumulated expertise, customer relationships, and market position become advantages, not baggage.

The New Operating System: Quarterly Waves

In my framework where “the quarter is the new year,” each quarter represents a new wave:

Q1: Launch the wave (experiment, explore) Q2: Build momentum (validate, scale) Q3: Reach the crest (optimize, harvest)
Q4: Prepare the next wave (learn, plan)

This creates a predictable rhythm of innovation while maintaining stability in your core.

From BiModal to Multi-Modal

While Two Track Transformation created BiModal operations (run + change), Waves of Value enables Multi-Modal:

Foundation Mode: Operational excellence
Modernization Mode: Systematic upgrades
Resilience Mode: Building adaptability
Innovation Mode: Creating new value
Transformation Mode: Reinventing the business model

You’re not just ambidextrous—you’re orchestrating multiple modes of value creation simultaneously.

The Stacking Advantage

When transformation stacks rather than runs parallel, you get:

Compounding Returns Each wave multiplies the value of previous waves. AI on top of digital on top of cloud creates exponential rather than linear improvement.

Lower Risk You’re building on proven foundations rather than betting everything on untested models. Each wave de-risks the next.

Cultural Alignment Instead of “us vs. them” between core and innovation teams, everyone sees how new waves enhance rather than threaten the foundation.

Customer Continuity Your customers experience evolution, not disruption. They grow with you through successive waves rather than being abandoned for new markets.

Making Waves: The Implementation Guide

Start with Foundation Assessment Before adding waves, ensure your core is solid. Can it support what you’re building on top?

Design Your Wave Pipeline Map out 3-4 waves over the next year. What value does each create? How do they build on each other?

Create Wave Teams Unlike separate innovation labs, wave teams include people from your core business. They’re building on top of, not apart from, your foundation.

Measure Wave Impact

Foundation metrics: Efficiency, profitability, reliability
Wave metrics: Value multiplier, adoption rate, capability increase
Compound metrics: How much each wave amplifies the previous

Celebrate Compound Wins Show how Wave 2 made Wave 1 more valuable. This reinforces the stacking model and builds momentum.

The CEO’s New Mental Model

Stop thinking about transformation as a parallel track that might someday merge with your core business.

Start thinking about transformation as successive waves that build on top of your foundation, making everything below more valuable.

Your core business isn’t the old model to be replaced. It’s the platform for infinite waves of value creation.

Visuals for Thinking in Waves of Value

Here are a handful of visuals I either whiteboard or share when helping leaders with new value creation:

New Waves of Value Creation

Your Future Business Today

Your Firm Foundation

Firm Foundation

How to Use This Today

Step 1: Map Your Foundation (This Week)

Assess your core business strength: Can it support waves of innovation?
Identify your top 3 competitive advantages to build upon
Document what must remain stable vs. what can evolve

Step 2: Design Your First Wave (Next 2 Weeks)

Pick ONE modernization initiative (AI, cloud, digital) that amplifies your core
Define success metrics: efficiency gain, capability increase, value multiplier
Assemble a wave team: 70% core business, 30% innovation talent

Step 3: Launch Your Wave Pipeline (Next 30 Days)

Map 3 waves for the next year (one per quarter, keeping one in reserve)
Create your wave calendar: Q1 Launch, Q2 Build, Q3 Optimize, Q4 Plan Next
Set up weekly wave reviews: momentum, learning, compound impact

Quick Start Option: Tomorrow morning, identify one process in your core business that AI could amplify 10x. That’s your first wave. Start with a 2-week experiment. Measure the multiplier effect, not just the improvement.

The 90-Day Proof: Run your first wave for one quarter. Document how it strengthened your core while creating new value. Use this success to fund and justify your full wave pipeline.

Final Thoughts: The Compound Power of Stacked Transformation

Two Track Transformation taught us to run dual operations. Waves of Value teaches us to build compound value.

In the Age of AI, the winners won’t be those who abandon their core for something new. The winners will be those who use their core as a launching pad for successive waves of innovation, each one making the previous more powerful.

The question isn’t whether to run your business OR change it.

The question is: What wave of value will you stack on top of your foundation today?

Your next wave is already forming. The only decision is whether you’ll ride it or watch it pass by.

For the foundational concepts behind this model, see Two Track Transformation for Modern Innovation.

Two Track Transformation for Modern Innovation

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