Teaching Old Companies New Tricks

Some advice for established firms and what they can do to stay competitive.

an interview with CHARLES A. O'REILLY

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.

Lead and Disrupt » explains how shrewd organizations achieve success and longevity through innovation.

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:

Start reading Lead and Disrupt »

Charles A. O’Reilly III is the Frank E. Buck Professor of Management at Stanford University’s Graduate School of Business and co-author of Winning Through Innovation and, most recently, Lead and Disrupt: How to Solve the Innovator’s Dilemma. He and Michael L. Tushman are co-founders and co-directors of Change Logic, a consulting practice that helps firms, CEOs, and senior teams innovate and thrive.