Have you considered the future of your company—the future that will happen decades from now? Here’s how to run a business that outlives you!
The Standard & Poor’s 500 (S&P 500) is a list of the most powerful companies on the American stock exchange, and includes companies like 3M, Apple, Google, Starbucks, and Visa. Over the years, the average company lifespan on the S&P 500 index has fallen dramatically—from 61 years in 1958 to just 15 years today—proving that no matter how big you are, change is imminent, and those who cannot adapt will be lost forever.
Technology Kills
Remember all the video rental shops that were so established around Bahrain a couple of decades ago? Many of them were huge before they disappeared completely in the face of new formats, which started off with DVDs and followed by Internet streaming. Basing your business in the highly fluid area of technology—without taking into account the next wave, and adapting to the rapid developments technology inevitably brings—means that you’re waiting for disaster to happen. This doesn’t just apply to traditional brick-and-mortar businesses. The phenomenon can hit Internet-based businesses much harder. To protect yourself, examine the real threat technology can pose—whether it’s disappearing technologies rooted at the core of your business, or new technologies that could cause your business to disappear altogether. Always keep an eye on new advances that could potentially affect your business, either directly or indirectly.
“Most successful companies that have survived for hundreds of years are extremely sensitive to their surroundings.
Environmental Sensitivity
Most successful companies that have survived for hundreds of years are extremely sensitive to their surroundings. They tend to adapt, and adopt strategies for change as much as possible. Trying to block change, or pretending it never happened, will only result in a harder fall. Think about how foolish Kodak was for not pushing the move to digital cameras. Instead, they chose to protect their lucrative film business. The only way to predict the future is to invent it. Kodak determined its own future by deciding to stick with a profitable past…until it disappeared. In recent years, we’ve seen Twitter apps with millions of users disappear one after another, simply because of a single policy change. Twitter decided it would set a maximum user cap on third-party apps, triggering the immediate destruction of thousands of startups.
Preserving an alternative route, even if it looks much smaller than the main products or services you offer, can be critical for the continued success and continuity of your business. That’s what inspired social media giant Facebook to acquire Instagram and WhatsApp. Similarly, Nintendo started with playing cards, then moved to electronic toys before dominating the video game market.
“The worst thing that can happen to your business is for it become a very fashionable brand for a short period of time.
Fads!
The worst thing that can happen to your business is for it become a very fashionable brand for a short period of time. Many fads quickly disappear after attaining unrealistic levels of coverage and fame. This can affect any industry, and it definitely impacts technology. The main danger is that an entire brand could become a mere fashion fad, like Crocs or Sanrio. Overexposure of your brand—and failing to diversify your product—can turn your company into a boring relic of ancient times.
Values and Principles
Many of the longest-lived companies in the world are Japanese, and most of them started as family businesses with strict, laser-sharp values. A notable example is a hotel called Nishiyama Onsen Keiunkan, which was founded in 705 A.D. and continues to operate 52 generations later, under the ownership of the same family. Once a basic core value is rooted in the heart of your business, it can easily outlive its founder and survive for years or decades. Even in the case of acquisition by a major player, a smaller company with strong principles can maintain its spirit and change the principles of the bigger fish. After all, a small animation studio called Pixar managed to change how Disney thinks and operates, bringing Disney back to box-office success after decades of flops.
