Living Forever: What’s the Secret to Business Longevity?
The world seems to be spinning at a quicker pace than ever. But is this really the case? In the business world, this definitely seems to apply. Globalisation, faster technology and shortening lines of communication really does affect the lifespan of businesses, as recent news has highlighted.
The average lifespan of a company listed in Standard and Poor’s 500 index of leading US companies has decreased by more than 50 years in the last century, from 67 years in the 1920s to just 15 years today. The damaging effects of companies of this size failing can be disastrous, as we have witnessed. So what is the secret to business longevity in this age of burn bright and burn out?
I was surprised to hear that Japan, known for it’s juxtaposition of slick cutting edge technology and ancient respect for tradition, has on it’s records more than 20,000 companies that are more than 100 years old- with a handful more than 1000 years old. They even have a word, shinise, which describes long-lived companies. People who have studied this phenomenon say the key to their longevity is keeping it small, keeping the relationships close, and focussing on a central belief that is not solely tied to making a profit. A far cry from the ‘slice and dice’ culture of the West.
There is, however, not only one rule of survival. When considering the toolbox for longevity and considering larger commercial businesses that have lasted the longest, success most definitely consists of innovation and reinvention. Companies that move and change with the times, responding in an agile and flexible fashion, are the ones that survive. Not always easy if your shareholders aren’t interested in long-term rewards, but the maintenance of day to day housekeeping and the deliverance of strategic vision is not an easy balancing act.