Richard Du, Agorafy, Inc.Flipping through history, there are some companies that have survived it all. You name it: recessions, world wars, the Industrial Revolution as well as the advent of the Internet and connectivity. These are the real troopers, but most importantly, these are the successful adapters.
Some businesses seem to have been with us forever. It is an exclusive group of organizations that have surpassed a century of development, operations, team management and most importantly, the generation of revenue.
For example, here are some of the oldest companies in the United States: Exxon Mobil Corporation (1870), General Electric Co (1982), Chevron Corporation (1979), Wells Fargo & Company (1852), Xerox Corp. (1906), The Washington Post Company (1877). As you can see these are family household names; everyone knows them.
Most recently, in 2011, IBM reached its 100-year mark. Its chairwoman, CEO and president, Ginni Rometty, said something of utmost importance regarding the success of the company. “IBM’s long-standing mantra is ‘Think.’ What has always made IBM a fascinating and compelling place for me, is the passion of the company, and its people, to apply technology and scientific thinking to major societal issues.”
This is a very powerful quote because it confronts key concepts that make IBM, and all of the 101-year-old companies, set themselves apart from the rest. What do they have in common? How are those accomplishments translated into business? A quick analysis brings us to seven common features:
1. Endurance.
2. A successful repeatable business model.
3. Supply and demand.
4. “Customers First” Approach.
5. Solve society’s biggest problems.
6. Community building.
7. Multiple avenues to be profitable and grow.
Furthermore, when we see companies like Facebook that have not yet achieved longevity, we can’t avoid analyzing its current path to success. As its founder and CEO Mark Zuckerberg said, “My goal was never to just create a company. A lot of people misinterpret that, as if I don’t care about revenue or profit or any of those things. But what not being just a company means to me is not being just that–building something that actually makes a really big change in the world.”
Have these 101-year-old companies always been right? Have they always been successful? No. These companies have prevailed against adversity. Therefore, if we look at a more in depth analysis to what has contributed to the achievements of these companies, we cannot ignore the four “M”’s. These are the important concepts and practices throughout their history that have always been a critical part of their progress: market, management, money and momentum.
First, ‘Market Size’
According to Industry Week: “Lifespans of companies are shortening, concludes a recent Insight study of the S&P 500 index. The consulting firm’s research showed that in 1958, the average tenure of a company in the S&P 500 index was 61 years. The average had dropped to about 25 years by 1980 and was down to 18 years in 2012.”
When you analyze the performance of these exclusive groups of successful companies, adaptability and market dominance have been critical components of their businesses.
Companies that stand the test of time are able to do so because they change with the times. Moreover, while these long-lasting companies may take a misstep from time to time, or pull back in the face of harsh economic conditions, they also demonstrate a resiliency, so being both adaptable and resilient is essential.
Walter Kiechel III, author and business journalist said, “The secret to success is being able to churn out the same product over and over, with uniform quality.” It is very important to have the ability to do the same thing in new markets and with new products. How so? Bringing simplicity, consistency and clarity will produce continuous improvement and allow a company to rapidly adapt to change without feeling overwhelmed by complex issues.
Organizations with repeatable business models understand what their customers want, translate their strategy into clear principles that can be easily understood and adopted by employees and leaders from all levels of the organization. The simplicity and consistency means that everyone in the company is on the same page—and no one forgets where the success is coming from.
Second, ‘Management Team’
It has been stated many times: I would rather have an A+ team working on a B+ idea, than a B+ team working on an A+ idea. What are the characteristics of the A+ team? Consistent and shared vision; Determination with a distinctive end game; Flawless execution; Unwavering quality control: never overlook the basics of the company; and Team oriented / customers first.
Third, ‘Money’
A 101-year-old company – basically a multi-billion-dollar idea – doesn’t become a multi-billion-dollar company without the funds needed to purchase capital, hire the right team and capture the attention of customers. Furthermore, to be successful and remain in business, both profitability and growth are central and indispensable for a business to predominate.
When you look at these long lasting organization, profitability and growth have gone hand in hand in regard to their business success. Why? Profit is key to financial survival as a corporate entity, while growth is key to profit and long-term accomplishment.
Fourth, ‘Momentum’
Everyone has their own definition of momentum. Merriam Webster defines as, “the strength or force that something has when it is moving, the strength or force that allows something to continue or to grow stronger or faster as time passes. For an object moving in a line, the momentum is the mass of the object multiplied by its velocity.”
What does this nebulous term have to do with a 101-year-old business? What exactly is momentum? Typically, this is the stage when a company moves forward and grows; knowing exactly when and how.
What do all of those companies have in common when it comes to momentum?
1. Assertive leadership and unwavering vision.
2. Strategic planning and execution.
3. Reliability.
4. Credibility / Reputation.
Interested in building a 101-year-old company?
Be ready to persevere and endure. Always put the customer first in product quality. Don’t forget the community that will be directly connected to your product or service. Always remember that there isn’t one way to do something. If you hit a snag, there will be other routes to success while you adapt to the needs of the consumer and adjustments in the market. Build communities and act! 101-year-old companies understand the communities they build for their products. As Jack Ma, Alibaba’s founder and CEO says, “If you want to grow, find a good opportunity. Today, if you want to be a great company, think about what social problem you could solve.”
Richard Du is founder of Agorafy, New York, N.Y.
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