The idea of quick wins seems to be the goal in burgeoning businesses with #trends moving at the speed of light. But could this fast-paced, mechanical approach be the reason that recent years have seen as many business fall as those that rise? According to research conducted by Yale University on the S&P 500 Index, the average lifespan of a business has decreased by more than 50 years in the last century, with each business typically surviving for an average of only 15 years. So the question is, have we been thinking about business growth all wrong? According to the Director of the BCG Henderson Institute, Martin Reeves in his TED talk, How to build a business that lasts 100 years, that’s exactly the case.
When asked by a tech CEO, “what do we have to do to make sure that our company lasts 100 years?” Martin’s inability to answer quickly sent him into a research rabbit hole to find the answer. Reeves suggests that the measuring stick for success should be longevity and endurance and that many companies who have crumbled, had their eyes on the wrong prize. “We need to think more modestly and subtly about when and how we can shape, rather than control, unpredictable and complex situations. It’s a little like the difference between throwing a ball and releasing a bird. The ball would head in a straight line, probably towards the intended target, and the bird certainly would not.”
So who should we take our cues from? Companies like Kellogg’s, Coca-Cola, and Cadbury are industry veterans who have blown out 100 candles on their birthday cake and have managed to adapt through various economic and social climates – even surviving two World Wars.
Here, Martin explains how he, along with Simon Levin, a professor of Biology and Mathematics at Princeton University researched the human body and found that the key to surviving the cut-throat world of business can be directly compared to the human immune system.
Their research found that all veteran companies (and even religious institutions for that matter) have key characteristics that have helped them survive: redundancy, diversity, modularity, adaptation.
Our suggestion? Have your note-taking tools at the ready:
Read more about businesses that are made to last in Issue 42, on sale now.