Nobody needs to be reminded that technology is advancing at a breakneck pace, and the world is changing rapidly. As a result, businesses need to be able to adapt to evolving situations, in addition to staying sharp and competitive.

In this segment from the Rule Breaker Investing podcast, Motley Fool co-founder David Gardner talks about the importance of evolution in successful businesses -- being willing, if it comes down to it, to turn your business on its head in order to adapt to something new.

Make sure to check out the other parts of this series:

Businesses That Win Trait #1: Create Value for All Stakeholders

Businesses That Win Trait #2: Solve Real Problems

Businesses That Win Trait #3: Long-Term Thinking

Businesses That Win Trait #4: Not Afraid to Adapt

Businesses That Win Trait #5: Be Fun!

A full transcript follows the video.

This podcast was recorded on Oct. 21, 2015.

David Gardner: Trait number four: companies, institutions that evolved. We talked about this a few weeks ago. In fact, I think it was podcast No. 15, titled Netflix, Amazon, and the Future, just a few weeks back. If you're new to the podcast, I recommend you go back and listen to that one where I'm talking about how technology is accelerating. I told the story of Ray Kurzweil's view of history, and where we are today. And I highly recommend that you acquaint yourself with that material, because it's so relevant, especially for Rule Breaking.

Warren Bennis, the author of the book "On Becoming a Leader," he said the number one trait he looks for in leaders, the most important single trait he believes that we as leaders need to have is what he calls "adaptive capacity." You need to be able to roll with the punches. You need to have your eyes out. You need to see how the world is changing. You need to be ready. You don't want to have your eyes closed or your head buried in the sand. There are those organizations, too. Some of them are for-profit companies that don't do so well over the long term.

But companies that can evolve, just such a critical trait. So, the businesses that win are ready, sometimes, to shoot their own business model in the foot, to turn on a dime, and to do something different when circumstances call for it. And like most of these other traits, it's hard to do. When I think of a couple examples of companies that are clearly evolving, I think about Tesla. And I think about Alphabet.

Now, Tesla, a lot of us have heard of. It's Tesla Motors today. I wouldn't be surprised, though, as things continue to evolve, if Tesla drops the word "motors" from its corporate name. Alphabet is a name less well-known to people, but of course, it is how Google chose to rename itself, the holding company overseeing Google, among other things, and the other enterprises, the other start-ups and things that are all part of that overall that company today. It's called Alphabet. Still has the same ticker symbol, GOOG, or GOOGL. I don't like the companies that are doing this, splitting their stocks and creating new classes and new ticker symbols. It adds a lot of confusion to my life, personally. But, such is as it is. And these companies, Tesla and Alphabet are very much ready about and creating, frankly, evolution in the world at large.

I just saw a headline the other day, I was thinking about that Kurzweil podcast from a few weeks ago, and the headline was, "A Genetically Engineered Virus Improves Efficiency of Solar Cells." Now, I can't exactly tell you what's even happening there. I did read the first two paragraphs. It does come out of MIT. It sounds impressive. But this is a sign, clearly, to me, that technology is, in fact, proceeding apace, and evolution is happening. When we're starting to genetically engineer viruses to improve the efficiency of solar cells, the world is getting a little bit crazy weird, I think in a good way. 

And again, it's the businesses that's win that are making that happen, the ones that evolve.

Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. David Gardner owns shares of Alphabet (A shares), Alphabet (C shares), and Tesla Motors. The Motley Fool owns shares of and recommends Alphabet (A shares), Alphabet (C shares), and Tesla Motors. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.