Written by Sean McPheat |
The average life expectancy of a multinational organisation is approximately 40-50 years.
So says Arie De Geus in his book ‘The Living Company’ (Boston, Harvard Business Press).
He based this premise on a survey of corporate births and deaths, and it shows the massive changes that business and organisations go through during their relatively short life-times.
In fact, he also found that fully one-third of businesses that were around in 1970 had disappeared by 1983.
So, what did De Geus and his researchers find created longevity in businesses, some of which were over 200 years old?
He introduced four factors, and these are very relevant to us as individuals as well, especially if we want to stick around for some time in today’s massively-changing environment.
Sensitive to their environment.
De Geus stated that ‘companies who thrive manage to respond in timely fashion to the conditions of society around them’.
By observing and, in some cases, driving the changes in social communications, companies are able to keep pace with what is required to build a solid customer base and keep the lines of communication open.
Similarly, individuals who want to do more than survive today need to be driving with the social changes that are taking place.
By doing so, you keep up with the ever-expanding expectations of customer and clients who want more and more, and want to pay less and less.
Cohesive, with a strong sense of identity.
Again, De Geus said that ‘each management generation in a company was part of a link in a long chain’.
He stated that successful, abiding companies looked within for people to promote, and it created a sense of loyalty to the business as people identifies with their overall purpose.
Individuals today should identify what they want to stand for, what their legacy would need to be with clients and prospects alike, and how they want to build their own specific brand.
Everyone is, effectively, a brand in that they create a sense of emotional connection with their customers.
Your ‘brand’ will prove either long-lasting or evaporate in a fleeting moment of time.
Stretch their understanding of possibilities.
Any company that doesn’t drive and keep up with changes in their market environment will be quickly overtaken by competitive forces.
The only factor that will keep them ahead is the ability to thrive in the changing environment, offering more to consumers than they knew existed and driving the market opportunities into the unknown.
Individuals need to be aware of what possibilities they can offer to clients and live by the maxim that everything can be and get better.
Small, incremental improvements are easy to adopt if the mindset is one of ‘how can we do this better?’
Flexibility and independence of action.
When companies are frugal with their investments and ensure they don’t fritter money away, they become adaptive to the changing environments and increase their understanding of the information that is available to them on a daily basis.
By living flexibly and with an adaptive mindset, you are able to see what changes need to be employed to invest wisely in terms of your money, time, efforts and knowledge.
Just as a sailor will immediately tack his boat in a different direction to match the ever-changing wind conditions, we need to be aware of what the market expectations are doing to our services.
In fact, if you are still presenting solutions that same way as you did a year ago, you’re out of date and being overtaken continuously by your competitors.
These four components were and are the foundation for growth of the long-lasting companies.
They can also prove to be beneficial for us an individuals to adopt as we attempt to build a legacy for ourselves over the long term.
Originally published: 6 October, 2016