Some advice for established firms and what they can do to stay competitive.
Professors Charles A. O’Reilly of Stanford University, and Michael L. Tushman of the Harvard Business School, have long studied what makes businesses tick. For over a decade they have worked directly with a variety of business leaders through their consulting practice, Change Logic—an agency geared toward helping old firms learn new tricks. Too many established companies begin to flounder in their matures stages as a result of complacency, they’ve found—a fatal flaw that usually leaves them unprepared when start-ups enter the scene and begin edging into their markets. So how can successful companies avoid falling prey to market disruption? Easy: build disruption into the business model.
Such is the advice that O’Reilly and Tushman offer in their new book, Lead and Disrupt. Drawing on years of experience in both consulting and academia, as well as case studies from some of the world’s leading companies—including Amazon, Walmart, and Apple—O’Reilly and Tushman describe how executives at premier firms implement a two-pronged strategy that focuses, on the one hand, on exploiting and improving existing business models, while on the other hand, aggressively exploring new market opportunities. This ambidextrous logic has the power to foster innovation in mature companies, giving them the edge over new business rivals, and ensuring that they stay competitive.
In the following video, Charles A. O’Reilly answers our questions and offers practical insights into this ambidextrous explore-and-exploit model, pointing out its successes as seen in the business strategies of Netflix, IBM, and Google:
On getting company leaders on board with the innovation agenda—a case study from IBM.
THE AMAZON MODEL
The retailer-turned-tech firm exemplifies a powerful two-pronged approach to innovation.