Wednesday, August 27, 2014

Legacy and Longevity

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In an interesting prologue from The Living Company run on Businessweek, there are some insightful musings on why most companies fail prematurely. The author cites research covering Japan and Europe that shows the average age of any business is 12.5 years. For Fortune 500 companies, it’s 40-50 years. People live comfortably longer lives than companies. And we are flesh and bone. I think there’s some truth in this observation:

“Companies die because their managers focus on the economic activity of producing goods and services, and they forget that their organizations’ true nature is that of a community of humans. The legal establishment, business educators, and the financial community all join them in this mistake.”

Business Insider picked up on this theme recently by creating a list of the world’s oldest companies. Working through it the themes for success aren’t surprising. Aside from the most basic of business principles – offering quality goods and services people want – for many it’s a commitment to a legacy that pushes them to consistently deliver.

The first, and oldest, company on this list sums up how the drive to ensure a legacy leads to longevity. Japan’s Nisiyama Onsen Keiunkan opened in 705. It’s the oldest running hotel in the world, operated by the same family for 52 generations, with staff whose families have held the same posts for generations. Remarkable. Success takes hard work. Longevity requires management to dream of a legacy that every employee wants to be a part of.

Check out the full list here.

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