Incumbent-Challenger Dynamics: Mamdani, Transformation Architecture, and the Problem of Transcendence
In 2020, Mahmood Mamdani published Neither Settler nor Native: The Making and Unmaking of Permanent Minorities. The book examines how colonial powers created a structural binary between settlers and natives, and how that binary outlasted the empires that built it.
It’s a work of political theory and historical analysis. It’s about colonialism, apartheid, the Holocaust, and the Sudan.
It’s also, unexpectedly, the most precise description I’ve encountered of what happens inside organisations during any major transformation.
The pattern Mamdani identifies (how binaries form, why they persist, why the three obvious solutions fail, and what transcendence actually requires) maps directly onto the incumbent-challenger dynamics that define corporate transformation, market disruption, and institutional change.
This article traces that mapping. Not as metaphor, but as structural analysis.
The Framework
Mamdani’s argument proceeds in stages.
The Binary
Colonial systems created a structural division between settlers (those who built or benefited from the colonial architecture) and natives (those who were excluded from or disadvantaged by it). This wasn’t just a social distinction. It was embedded in the architecture itself: legal systems, property rights, institutional access, economic structures.
The architecture produced the categories. The categories reinforced the architecture. Over time, the distinction became so deeply structural that it persisted even after the system that created it was formally dismantled.
The Persistence
Here’s Mamdani’s key insight: ending the formal system doesn’t end the structural binary. Apartheid ended in 1994. The legal architecture of racial classification was dismantled. But the economic architecture (who owns what, who has access to what networks, who holds institutional knowledge, where infrastructure exists) remained substantially intact.
Thirty years later, the structural binary persists in economic outcomes even as the political binary has been resolved. The architecture outlasted the policy that created it.
The Three Failed Approaches
Mamdani identifies three approaches that societies have tried to resolve the settler-native binary. Each fails for structural reasons.
Approach 1: Maintain the existing order. Protect the current architecture. Minimise disruption. Allow gradual evolution.
This preserves the binary. The architecture that created the distinction continues to reproduce it. Formal equality coexists with structural inequality. Those who benefit from the current architecture retain their advantages. Those who don’t, don’t.
Approach 2: Reverse the binary. Replace settlers with natives in positions of power. Redistribute resources from one group to the other.
This inverts the binary without transcending it. The categories remain. The architecture still operates in terms of the distinction. And the reversal often destroys institutional knowledge, economic capacity, and social trust in the process. Zimbabwe’s land reform is Mamdani’s example: reversing the settler-native land ownership binary without redesigning the agricultural architecture produced economic collapse rather than equity.
Approach 3: Create parallel systems. Build new institutions alongside old ones. Let the two architectures coexist.
This avoids confrontation but never integrates. The old system continues unchanged. The new system operates in a separate space. Eventually, one absorbs or marginalises the other. The binary persists in practice even if it’s formally bridged.
The Proposed Solution: Transcendence
Mamdani’s argument is that the only sustainable resolution is to redesign the architecture so that the settler-native distinction itself becomes irrelevant. Not to maintain it, reverse it, or work around it, but to build structures in which the categories no longer determine outcomes.
This is architecturally profound. It means the problem isn’t who occupies which position. It’s the architecture that makes those positions produce categorical outcomes.
The Business Parallel
Now read the framework again, substituting “organisation undergoing transformation” for “society undergoing transition.”
Every major organisational change creates its own incumbent-challenger dynamic.
Incumbents are those who built or benefited from the current architecture. They know the existing systems. They hold institutional knowledge. They have the relationships. They occupy senior roles. Their expertise, networks, and influence are products of the current architecture.
Challengers are those brought in for the new architecture. Digital natives. External hires. Transformation consultants. Next-generation leaders. Their skills, perspectives, and approaches are oriented toward a different architecture.
The transformation is supposed to shift from old to new. But watch what actually happens.
The Binary Forms
What begins as a functional distinction (people working on legacy systems and people working on new ones) hardens into an identity. “Legacy team” and “transformation team.” “Old guard” and “new blood.” “Business as usual” and “future state.”
These categories start as descriptions of what people work on. They become descriptions of who people are. Once that happens, every decision becomes political. Resource allocation, project prioritisation, leadership appointments. All are read through the lens of which side they favour.
The Architecture Persists
Meanwhile, the incumbent architecture persists for the same reasons institutional architectures persist. It’s load-bearing. Real transactions flow through it. Real customer relationships depend on it. Real revenue comes from it. You can’t simply turn it off.
The result is that the new architecture must be built alongside the old one, drawing resources from an organisation that depends on the system being replaced. The incumbents control the current value stream. The challengers are asking for investment in a future value stream. The structural advantage always lies with the present.
The Three Failures Repeat
And the three failed approaches play out in miniature.
Maintaining the existing order: “Digital transformation” that digitises current processes without changing the architecture. New technology layered on old structures. The incumbents stay in charge. Nothing fundamental shifts. The organisation announces transformation while the architecture reproduces the status quo.
This is approach 1. The binary is preserved. The architecture that produced it continues to operate.
Reversing the binary: Wholesale leadership replacement. Fire the old team, hire new talent. Bring in a transformation-oriented CEO who cleans house.
This is approach 2. It destroys institutional knowledge, customer relationships, and operational continuity. The new team inherits an architecture they don’t understand and can’t maintain. The reversal often produces a period of chaos that discredits the transformation itself, leading to a counter-reversal (the “back to basics” phase) that restores the previous architecture.
Creating parallel systems: The innovation lab. The digital unit. The skunkworks project that operates independently from the core business.
This is approach 3. The parallel system succeeds in its protected space but never integrates with the core. The old architecture continues unchanged. Eventually, the parallel system is reabsorbed into the mothership (losing its distinctive capabilities) or spun off (abandoning the core business to its legacy architecture).
Why the Failures Are Structural
These aren’t failures of execution. They’re failures of architectural logic.
Approach 1 fails because the current architecture reproduces the current distribution of outcomes. If you don’t change the architecture, you don’t change the outcomes. Process improvements within the existing structure produce incremental gains at best.
Approach 2 fails because it conflates the people with the architecture. Replacing incumbents with challengers doesn’t change the structures, incentive systems, or information architectures that produced the current state. New people in old architecture produce surprisingly similar outcomes.
Approach 3 fails because parallel systems don’t exert architectural pressure on each other. They coexist without integration. The core business has no incentive to adopt the new approach because the parallel system absorbs the transformation energy without requiring the core to change.
Each approach addresses the symptoms (who’s in charge, what tools are used, where innovation happens) without addressing the architecture that produces the incumbent-challenger binary in the first place.
What Transcendence Looks Like in Business
Mamdani’s transcendence, redesigning the architecture so the binary dissolves, has a direct business translation. It’s harder than any of the three alternatives, but it’s the only one that produces lasting change.
Redesign the System, Not Just the Roles
Don’t ask “who should be in charge?” Ask “what architecture would make the incumbent-challenger distinction irrelevant?”
This means redesigning the structures that produce the binary. If the incentive system rewards tenure over capability, change the incentive system. If the information architecture gatekeeps knowledge, open the information architecture. If decision rights are concentrated in roles that only incumbents occupy, redistribute decision rights based on capability domains rather than hierarchical position.
The goal isn’t to advantage challengers over incumbents. It’s to build an architecture where the distinction between them stops mattering.
Create New Positions, Not Just New Occupants
The generational bottleneck I’ve written about in the South African context, where a pre-1994 cohort occupies senior positions while a post-1994 cohort queues below them, exists because everyone competes for the same fixed set of roles.
The architectural solution isn’t to force incumbents out (approach 2) or to wait for them to retire (approach 1). It’s to grow the pyramid. Create new leadership positions through business expansion, new capability domains, new business lines. Dilute the binary by creating space that neither side currently occupies.
In the South African economy, this means GDP growth and MSME development creating new senior positions, not just redistributing existing ones. In a business, it means growth strategy as talent strategy. When the organisation is expanding, the incumbent-challenger tension resolves itself because there are enough new positions for both.
Build Bridges, Not Walls
The most successful transformations pair incumbent knowledge with challenger energy. Not as a collaboration workshop. As an architectural design choice.
Incumbents know where the bodies are buried. They know which processes are actually load-bearing and which are just legacy habit. They know the customer relationships, the regulatory nuances, the operational edge cases that no documentation captures.
Challengers know where the value is going. They understand the new technologies, the emerging customer expectations, the architectural patterns that will enable the next phase.
You need both. An architecture that structurally integrates them (through cross-functional teams, shared accountability for outcomes, joint ownership of capabilities) dissolves the binary by making the distinction non-functional.
Change the Architecture’s Logic
This is the deepest level of transcendence.
If the information architecture gatekeeps knowledge, new leaders are as constrained as old ones. Change the information flows.
If the financial architecture allocates resources based on historical performance, new initiatives can never compete with legacy revenue streams. Change the allocation logic.
If the governance architecture gives veto power to functions that benefit from the status quo, no transformation proposal survives intact. Change the governance design.
If the career architecture promotes based on time-in-role, challengers can never catch up to incumbents. Change the promotion logic.
Each of these is an architectural intervention, not a policy intervention. They change the structures that produce the binary rather than trying to override the binary’s effects.
The South African Evidence
South Africa provides a 30-year case study of what happens when political transformation occurs without architectural transcendence.
Political equality was achieved in 1994. The franchise was universal. Legal racial classification was dismantled. The constitution enshrined equality.
But the economic architecture (land ownership patterns shaped by the 1913 Native Land Act, corporate ownership structures accumulated over a century, educational quality gaps produced by decades of differential funding, infrastructure distribution designed for the apartheid geography) remained substantially intact.
The result, three decades later, is precisely what Mamdani’s framework predicts.
Formal equality coexists with structural inequality. The Gini coefficient remains among the highest in the world. The top 10% hold over 80% of wealth. Household income gaps between racial groups have narrowed but remain at approximately 4.7x.
Within-group inequality now exceeds between-group inequality. This is the most striking finding from recent research. The emergence of a substantial black middle and upper class, real and significant progress, has been accompanied by persistent poverty for the majority. Class stratification within racial groups has become more significant than the racial binary that policy is designed around.
Research identifies at least six distinct class positions that cut across the racial binary: a settler-origin bourgeoisie, a settler-origin working class (including approximately 44,000 white South Africans in absolute poverty), a native-origin bourgeoisie (the BEE beneficiary class), a native-origin middle class (growing significantly, driven by employment in professional and public sector roles), a native-origin working class, and a native-origin precariat (the structurally unemployed).
The racial binary (settler vs. native, white vs. black) no longer adequately describes the economic architecture. But policy and public discourse remain organised around it. The architecture has evolved past the framework being used to reform it.
Policy interventions achieve real but structurally limited results. Employment Equity has shifted senior management from 74.9% white to 61% white over 18 years. BEE has created a new economic elite and expanded procurement access. These are genuine accomplishments. But the pace is set by architectural constraints (the generational cohort timeline, the narrow employment pyramid, the concentrated ownership structure) not by policy ambition.
Burger and Magruder’s research demonstrated this precisely: when you decompose the racial wage gap into its generational, discriminatory, and educational components, the policy effect is more modest than the headline numbers suggest. Much of the convergence is structural (generational turnover) rather than policy-driven.
The lesson isn’t that the policies are wrong. It’s that policies operating within an unreformed architecture produce results at the architecture’s pace, not the policy’s pace.
The Transformation Architecture Synthesis
Bringing together Mamdani’s political framework, the South African evidence, and the business transformation parallel, a synthesis emerges:
Every major transformation creates an incumbent-challenger binary. Whether the transformation is political (colonial to post-colonial), economic (industrial to digital), or organisational (legacy to modern), the same structural dynamic appears. Those who built or benefited from the current architecture occupy one side. Those oriented toward the new architecture occupy the other.
The binary hardens unless the architecture dissolves it. Without structural intervention, the categories become identities. The identities become interests. The interests become conflicts. The transformation degrades from architectural change to territorial negotiation.
The three obvious approaches (maintain, reverse, separate) all fail. Each addresses the symptoms without changing the architecture. Maintaining preserves the binary. Reversing inverts it. Separating avoids it. None transcends it.
Transcendence requires architectural redesign. Not changing who occupies the positions, but changing the structures that make the positions produce categorical outcomes. Not redistributing resources within the current architecture, but redesigning the architecture so distribution follows capability rather than category.
This is the hardest approach. It requires engaging with the architecture directly (the incentive structures, information flows, governance mechanisms, career systems, resource allocation logic) rather than managing the human dynamics that sit on top of the architecture. Most leaders default to managing people because it feels more actionable. But managing people within an unchanged architecture reproduces the same outcomes with different faces.
Implications for Transformation Leaders
If you’re leading transformation of any kind (organisational, digital, strategic, institutional) Mamdani’s framework offers a diagnostic:
Which approach are you actually using?
Are you maintaining the existing architecture while announcing transformation? (Approach 1, the most common failure mode in corporate transformation.)
Are you replacing incumbents with challengers and hoping the architecture changes with the people? (Approach 2, the most dramatic failure mode.)
Are you building innovation labs, digital units, or transformation offices that operate separately from the core? (Approach 3, the most polite failure mode.)
Or are you redesigning the architectural structures (incentives, information, governance, career systems, resource allocation) that produce the incumbent-challenger binary?
What would transcendence look like in your context?
Not a world where challengers have won and incumbents have lost. Not a world where the two coexist in separate structures. But a world where the distinction between them no longer determines outcomes. Where capability, not category, drives advancement. Where the architecture enables continuous evolution rather than periodic revolution.
Are the people who feel like incumbents and the people who feel like challengers building the new architecture together?
Transcendence can’t be imposed by one side on the other. It requires both sides to participate in designing the architecture that makes their current categories irrelevant. This is difficult, politically charged, and slow. It is also the only approach that produces lasting transformation.
The Connection to Dynamic Capabilities
In David Teece’s Dynamic Capabilities framework, the third capability, after sensing and seizing, is transforming. The ability to continuously reconfigure assets, structures, and capabilities.
Mamdani’s transcendence is the political theory equivalent of Teece’s transforming capability. Both describe the same challenge: how to redesign the architecture of a complex system while that system continues to operate.
The organisations that develop genuine transforming capability, the ability to redesign their own architecture without crisis, are the ones that transcend the incumbent-challenger binary. They don’t need to choose between approaches 1, 2, and 3 because they’ve built the architectural flexibility to continuously evolve.
This is rare. In business, in politics, and in institutions. Most systems oscillate between maintaining, reversing, and separating until an external shock forces genuine architectural change.
The aspiration, for organisations, for institutions, for societies, is to build the capability for architectural transcendence before the shock makes it unavoidable.
The Question
In your current transformation, whatever its scope, are you changing people, or are you changing architecture?
Are you maintaining, reversing, or separating? Or are you transcending?
And would the people who feel like incumbents and the people who feel like challengers agree on the answer?