All companies hit rough patches from time to time. But only a few manage to survive decade after decade—some of them in a form that bears no resemblance to the original organization. Nokia began in 1865 as a riverside paper mill along the Tammerkoski Rapids in southwestern Finland. In the late 1880s, Johnson & Johnson got its start by manufacturing the first commercial sterile surgical dressings and first-aid kits. And in 1924, the founder of Toyota came out with his company’s first invention—an automatic loom.
What explains the longevity? Stanford Graduate School of Business professor Charles O’Reilly calls it “organizational ambidexterity,” the ability of a company to manage its current business while simultaneously preparing for changing conditions. “You often see successful organizations failing, and it’s not obvious why they should fail,” O’Reilly says. The reason, he says, is that a strategy that had been successful within the context of a particular time and place may suddenly be all wrong once the world changes.
Staying competitive, then, means changing what you’re doing. But the change can’t be an abrupt switch from old to new—from print to digital distribution, say, or from selling products to selling services—if that means abandoning a business that’s still profitable. Hence the call for ambidexterity. You can’t just choose between exploiting your current opportunities and exploring new ones; you have to do both. And the companies that last for decades are able to do so time and time again.
Continue reading the rest of the story on Quartz