The secret to staying the distance lies in your company’s ability to simultaneously exploit and explore markets.
American aerospace manufacturer Goodrich started off making rubber conveyor belts, but switched to tyres when cars and aeroplanes arrived on the scene. Then, when World War II cut off the supply of natural rubber, it developed synthetic rubber and started making products for the defence industry. The business survived because it was “able to take its assets and capabilities and move into new businesses”. But not all companies manage to do this.
What makes some companies thrive for generations while others wilt and die? In their new book, Lead and Disrupt, Charles O’Reilly and Michael Tushman study 27 companies with an average age of 130 years, looking for the clues to sustained success.