Wednesday, December 23, 2009

Can We Increase Company Longevity?

Humans have learned what behaviors increase longevity: a balanced diet, regular exercise, monitoring blood pressure and cholesterol, etc. By identifying, monitoring and acting on the right factors, the average human life span has increased over 80 percent in just one century. (According to a 2004 publication by Hewitt Associates, life expectancy was 40 in the early 1900s and 75 years at the turn of the century.) If the life expectancy of a person can increase through the identification of longevity factors, why can't a company's?

Various studies indicate the average life span of firms is 12 to 15 years, that 40 percent of all newly-created companies last less than 10 years, and of those who survive the first 10 years the average life expectancy is 40 to 50 years. Yet some companies "live" one hundred years and more. Perhaps a reason for so many premature deaths is that corporations have not identified and cultivated the factors needed to increase longevity. If we can identify common factors that old companies share, might young companies who want to "live long and prosper" also incorporate these practices?

No comments:

Post a Comment