Friday, December 19, 2014

What About Schumpeter's Process of Creative Destruction?

Having just returned from presenting a paper on corporate longevity at the Strategic Management Society's conference in Sydney, I am pleased with the very positive response to my research on common behaviors of 100-year-old companies. The academics, business executives, and consultants in attendance encouraged me to pursue publication and wider dissemination of the research saying "I think you're really on to something here." One of the reasons this response was so encouraging is that in the past I have often been challenged to justify why I would research old companies in the first place. Free market economists tend to dismiss the value of longevity: Doesn't the principle of creative destruction imply that the old need to die to make way for the new? That vanishing companies and lost jobs are inherent parts of a growing economic system?

My response to this question has often been that I'm not saying a company should live forever, just that most "die" prematurely, causing much more trauma to employees, customers, suppliers, and communities than is necessary. But I think former McKinsey managing director Ian Davis had a better response in his reflections on corporate longevity published in the September 2014 issue of McKinsey Quarterly:  "Up to a point, I support that [creative destruction] argument. But it needs to be examined and challenged constantly if the underlying idea is not to be abused. Not all destruction is creative, and not all creativity is destructive. The demise of a company is not damaging only for its stakeholders. Sometimes, it may also be an inefficient way of innovating in the economy or an industry, because it breaks up established and tangible assets, such as R&D know-how and strong consumer and supplier relationships. A company that learns to adapt and change to meet market demands avoids not just the trauma of decline or an unwanted change of ownership but also very real transaction and disruption costs. Corporate endurance should not be an end in itself. That said, in a very real sense, survival is the ultimate performance measure."

I couldn't agree more.

Tuesday, November 25, 2014

Old Companies Are Environmental Sustainability Leaders

Who knew? Being an environment sustainability leader is a distinguishing factor of old companies I didn't expect - in fact we didn't even ask about companies environment efforts in our research. We should perhaps have had a clue based on how committed the old companies are to their communities as well as the fact that they have an attitude of stewardship regarding sustaining their business. But the fact is, I came across this factor by accident.

One of the courses I teach is Managing for Environmental Sustainability. In prepping for the course I ordered a new book I thought would be good for our business students called "Green to Gold: How Smart Companies Use Environmental Strategy to Innovate, Create Value, and Build Competitive Advantage" by Daniel Esty and Andrew Winston. In the book they have a list of companies they consider forward-thinking in the area of sustainable business practices, which they call "wave makers." As I was reading through the list I recognized a number of them were also in my data base of 100-year-old companies! Most people (including me) assumed that a "green" strategy was something new and entrepreneurial rather than something embraced by old, established businesses.

The more I thought about this, the more sense it made: the stewardship attitude of leaders in the old companies means they see their role as one of preserving the firm for future generations. It's a logical extension of this behavior to include preserving the environment for future generations. Their environmental sustainability strategies likely flow from the old companies' sense of social responsibility to their communities (see previous blog post). It may also stem from these companies' frugality: "green" projects often require an up-front investment that saves money in the long run. Since these companies intend to be around for the long term, they know they will benefit from the investment.

Once I began looking for it, I saw this leading edge attitude toward environmental sustainability in almost every 100-year-old company I studied. When I visited the 200-year-old cruise ship manufacturer Meyer Werft last summer, their head of R&D mentioned that the company was working on the development of fuel cell technology to power ships. He said they didn't expect it to be viable for 20 years or so, but they were investing in the project because they felt it was the best way to address the issue of how to power big ships in an environmentally responsible manner. (He even hinted that it might lead to a new business for them if they could sell fuel cell 'engines' to other large ship manufacturers.) With a 20-year investment and just the belief that it is the best solution to an environmental issue, who other than a very profitable 200-year-old company would make such an investment? This is an amazing example of the innovative strategies of old companies: just because they are old doesn't make them dinosaurs; they innovate and change or they wouldn't have survived for so long. It is their strategy of stewardship that approaches innovation, including in environmental sustainability, in a manner that ensures their viability into the future. Not all creativity needs to be destructive.

More confirmation of the longevity and environmental sustainability connection came with the 2015 list of the "Global 100 Most Sustainable Corporations in the World," an index prepared by the Corporate Knights organization. Forty percent of the U.S. firms on this list are over 100 years old. Compare that to the fact that less than one percent of all U.S. companies are that old. Further if I define "longevity" as companies that are over 90 years old, 50% of the U.S. companies on this list are long-term sustainability leaders.

Monday, November 24, 2014

Company and Community, A Mutually-Supportive Relationship

Old companies see their local communities as an important partner in their ongoing success. Because company leaders see the firm as an integral part of a web of relationships (often connected to family history and reputation), their relationships within the local community are just as important as those with business transaction partners. These community relationships include support of social organizations as well as those with business and government groups.

Old companies tend to be much more active participants in their local communities than other firms, promoting the community and developing local networks for mutual learning and benefit. They believe these connections with people in other industries and across generations have a positive influence on the reputation of their firm and they also see the positive influence on their business that comes from the local community's good reputation. I have numerous stories from my case studies of companies investing in their community in projects such as revitalizing their downtown, building programs in local schools, supporting various non-profit organizations, giving employees time to serve on local government commissions, etc. Most of these efforts were long-term investments and most had little or no immediate (or even long-term) financial benefit to the organization. The old companies see this involvement as an obligation that comes with being a part of the local community, but they also believe that such investments pay off in non-tangible benefits to the organization in the long run. These benefits may show up as mutual learning around new technologies and opportunities outside the company's industry contacts, or building a reputation that helps attract the best employees, or in streamlined government approval for local infrastructure projects.

Local communities are often the first to see the adverse effects of a company's demise, whether through failure of the business or its acquisition by another firm. Loss of jobs, loss of tax base, and loss of support for local organizations can be devastating to a community.

Old companies recognize the value of the community outside their business or industry and invest time and resources in projects that develop and sustain them. They see themselves as important members of their communities and wouldn't even consider pulling out and moving to another state or country for a tax break or lower labor costs. They know that a vibrant local community benefits their company and the community understands that a healthy, successful company benefits them as well.

In my research, old companies scored significantly higher that other firms on every question in the survey relating to building relationships within their communities. Whether it was participating in business-related organizations such as the Chamber of Commerce, building personal connections with people in other industries, or being involved in projects that build and promote their local community, the older companies clearly see themselves and their communities as one.

Thursday, November 20, 2014

Are Your Suppliers True Business Partners?

Another piece to the mutually supportive network built by 100 year old companies is that of their suppliers. As with their relationship with customers and employees, old companies see their connection with vendors as something more than economic transactions and they believe the maintenance of these relationships with their suppliers from generation to generation is an important factor in their long-term success. This commitment to retaining suppliers requires investment on the part of both entities to each others' success: the old companies work with suppliers to develop capabilities that are necessary to continue to support their organization in the future, and in return suppliers share their new technologies and ideas. Mutual learning results in mutual long-term success. This only works if the two parties are true business partners. Knowing the company's intent to stay around for the long term eases any qualms a supplier may have about making investments in development of future products.

So what type of behaviors result from old companies' long-term relationships with suppliers? Besides communicating their intent to build long-term relationships with business partners, the old firms were significantly more likely than younger companies to share information about their business with suppliers. This includes information about their production and sales processes, about products and services, as well as information about customers and markets. Further, they make an effort to understand their suppliers' business strategy and processes.

Supplier relations is one area in our research where old U.S. companies showed weaker support than the old Japanese firms. Though 100 year old companies in both countries indicated a strong intent to build long-term relationships with their suppliers, Japanese firms were more likely to actually engage in the behaviors that would ensure such longevity. Though these behaviors were reported as important by old companies in both countries, old Japanese firms were significantly more likely to exchange information about production, sales, products, services, customers, and markets with their suppliers.

The importance of this web of interconnecting, mutually-supportive, long-term relationships between companies and their customers, suppliers, employees, and communities cannot be overstated when trying to describe the factors contributing to corporate longevity.

Tuesday, November 18, 2014

Long-Term Customer Relationships Are More Than Economic Transactions

As I mention over and over in this blog, relationships are at the core of how old companies operate. These companies truly believe they cannot maintain their success for a long period of time without the cooperation of their business partners.Today's focus is the relationship these firms build with their customers. The relationships the old companies build with their customers from generation to generation has a significant effect on the firm's ability to weather difficult times as well as to learn and adapt over time. The old companies understand that they are part of a large, interdependent system. This holistic view of their role in the value exchange leads the old firms to see their relationship with customers as something more than mere transactions or the trading of goods and services for financial gain. When customers become trusted business partners, both parties are willing to share information and do favors for each other that don't necessarily have any readily apparent financial gain attached. This willingness to share information, technologies, and ideas becomes a two-way street, resulting in mutual learning and mutual success. (I often describe this phenomenon in terms of Peter Senge's "Learning Organization.")

This longevity factor of the long-term relationships with customers applies across industries. When I first started researching 100 year old companies, I thought there was a preponderance of retail organizations and it made sense that building good customer relations was an important factor in ensuring repeat business. But after building a representative data base of 100 year old companies, I discovered that the retail industry isn't represented at a higher rate than in the general business population and even manufacturing companies scored extremely high on issues of building long-term customer relationships. It may seem obvious that old companies are more likely to emphasize their corporate history, culture, and product "story" when working with customers. But it goes beyond the selling: the old companies were significantly more likely than younger firms to make every effort to see that their products were used in the best way. This involvement in how customers utilize the company's offering is what leads to learning opportunities for future changes and improvements. Thus the old companies are able to survive upheavals in their industry, advances in technology, and other environmental and social changes that leave their competitors behind. (When I attended IBM's 100th anniversary celebration as a guest speaker, I sat in the back of the room for the opening keynote address. As one of IBM's corporate leaders talked about the company culture that enabled them to survive for the last century, one item mentioned was their long-term relationships with customers that led to mutual learning. Without any prompting - or knowledge of who I was and what I did - the gentleman next to me leaned over and said "Our company has been an IBM customer for 80 years and I can tell you what she's saying is absolutely true. They work with us all the time on problems we have and help us find ways to address them.")

So what are the behaviors that the old companies engage in that help them build these long-term relationships with customers? Here are just a few of the old company behaviors that were significantly different from those of younger companies:

  • They work hard to gain an understanding of their key customers and their needs
  • They respond quickly to customer complaints and see customer service as an important opportunity to talk with customers (not just to fix the immediate problem)
  • They build long relationships with customers through after-sales services
  • They make every effort to ensure their products are used in the best/correct way and provide customers with useful information that will help their learning
  • They make a point of learning from their customers, but also collect information on customer and market needs in ways other than direct contact with current customers
  • They work hard at satisfying and retaining existing customers, but also work at developing new customers for the future

By viewing their relationship with customers as something more than mere economic transactions or simply the exchange of goods and services for financial gain, old companies have built a supportive network with their customers that reaps great benefits in the long run and has helped ensure not only  survival, but success, for over a century.

Friday, November 14, 2014

Want Your Company To Survive for the Long Term? Develop Leaders from Within

In previous posts I have mentioned the emphasis 100-year-old companies place on employee retention. They believe long term employees bring a wealth of "institutional memory" to address issues and opportunities that arise. After years with the company, employees identify very closely with the firm's goals and develop an ownership attitude - it's their company. This is a powerful advantage for a business. But it also makes it very difficult for executives brought in from outside the company to be successful. At best, employees take a "wait and see" attitude: Will this new leader take the time to learn the company patterns of behavior or come in with the attitude that s/he has a better way? It can take a very long time for an old company to accept an outsider who comes in at an executive position. It takes a special executive to be willing to pay the dues necessary to be successful as an "outsider." As a result, most old companies only bring in an outsider to fill an executive position as a last resort.

One of the distinguishing characteristics of the 100-year-old companies is how much time and effort they spend developing leaders from within. One CEO expressed that identification and development of his successor was his most important task - and he wasn't anywhere close to retirement age at the time he made this statement. Most old companies reported having a systematic process for leadership succession: they like future leaders to first have experience in other companies, but they must then work from the ground up, including hands-on experience in company operations. After leadership candidates understand the business inside and out and have built their own personal networks, then they are expected to think for themselves rather than blindly following tradition.

The majority of 100-year-old companies report that they have already identified who their next leader will be and are working very deliberately to develop him or her (along with other upper level managers). Can your firm say the same? This appears to be one of the key differentiating factors in sustaining a business for the long term: these companies are concerned not just about reaping the crop for today's harvest, they are cultivating the ground for the future and this factor is especially apparent in the area of leadership development.

Tuesday, November 11, 2014

How Do You Teach Relationships?

When I am explaining my research on the behaviors of old companies to people I often remark that the secrets to corporate longevity aren't exactly what we teach students in business school. Not that what we teach is unimportant - leaders in the old companies need to understand the basics of good management the same as every other business leader. It's just that what sets these old companies apart - and what appears to have resulted in their ability to thrive over the long term when others have failed - isn't the focus of most business courses: Relationships.

When I meet with leaders of the "corporate century club" they readily identify with this factor (I was even told by one CEO that I didn't emphasize it enough in one of my papers). But when I present my findings to academic peers at professional conferences, this is the factor on which I receive the most push-back - they are skeptical and sometimes downright dismissive. When I show them the research results, they question my methodology. Prior to obtaining data from 100-year-old U.S. firms that confirmed this factor, the most common response was that the "relationship" factor was a cultural anomaly of Japanese firms. Why this resistance to accepting the fact that 100-year-old firms survive because of their relationships? Perhaps it's time to instill more psychology and social science into our business courses. Business, it appears, is not a purely quantitative science. Yes, it requires technical knowledge, but that has to be supplemented with an understanding of people and society.

When I talk about "relationships" I mean a firm's relationship with employees, customers, suppliers, local communities, and even the environment. In all these areas the old companies were significantly more likely to emphasize the importance of long-term relationships and to engage in behaviors that would build and maintain these relationships. In case studies it was apparent that the old companies cherish these long-term relationships in a way that often didn't make short-term financial sense: continuing to carry products in their offering that long-term customers wanted, even when they lost money on the sale; keeping employees on the payroll even when there isn't any work for them to do (one firm lent employees out to local non-profits when orders were down); working with long-term suppliers to help them learn new technologies so they could continue to be a business partner on a new venture; investing in local community enhancement projects that had no apparent short-term (or even long-term) return to the company; engaging in leading-edge environmental sustainability practices simply because they believed it was the right thing to do, not because they could prove a return on investment. How do we teach such things?

It is my belief that leaders of these companies see themselves as stewards of the business who have been entrusted with protecting and building it for the next generation. (One likened his role to that of the servant in the parable of the talents). These companies also clearly see their firm as one player in a web of interconnected relationships that depend on each other to survive, through mutual learning and support. They have been practicing "stakeholder theory" long before it became a term for considering more than just the owners or investors when making business decisions. And they have proven the success of this approach through survival over a period of time when most of their competitors have long disappeared.

Monday, November 10, 2014

It's All In the Secret Sauce

Whether we're talking literally about a secret sauce (such as with the McInhenny Co. and their Tabasco sauce) or using the term to refer to a particular technical specialty or core competency, most of the companies that have survived for over 100 years attribute their success to the accumulation over time of some specialized knowledge and skills. They believe these company "secrets" or special methodologies make their organization unique and not only differentiate them from the competition, but make it difficult for others to imitate, thus giving them a sustainable competitive advantage. 

The belief held by the old companies that their products or services were difficult to copy and that their offerings had a strong appeal other than price wasn't significantly different that that of many younger firms. However, the old firms were more likely to indicate that they build on their unique characteristics in every aspect of their business - into the fine details of their offering, how they train and educate new employees, how they work with suppliers, and how they convey this uniqueness to customers as part of the sales process.

Another area where management of core strengths was unique among the older companies was how they build on their strengths over time. They report having some things that do not change in product quality, raw and processed materials, and production and sales methodologies; but they also report constantly working to improve their operations and develop their core competencies, even in the best of times.

Members of the "corporate century club" know they are special, and not just because they have managed to survive world wars, economic depression, huge advances in technology, globalization, and major shifts in social and cultural preferences: they know what is unique in their DNA and they cherish, protect, and build upon it.

Friday, November 7, 2014

Culture Is Everything

In previous posts (such as The Profit Paradox), I've talked about the importance of an overriding mission that describes the purpose or reason for old companies being in business. Strongly related to this characteristic is the importance of culture for the ongoing survival of 100-year-old companies. Though their cultures vary (the only common factor we found was that of financial conservatism), old companies' emphasis on maintaining the culture that they believe has led to the firm's continued success is significantly different than that of younger firms. Not only is this commitment to their culture shown in the time and effort the companies take to teach employees (and customers and suppliers) about their values and beliefs, the importance of their corporate culture was also seen in the way old firms placed more emphasis on brand identity and consistency in how their brand is evidenced in products, services, and facilities.

The values and beliefs that form a company's culture function as the fundamental guidelines for how the firm operates and provide the core ideas around which employees identify. In many of these old companies, the values and beliefs that formed the company's culture were developed by the founder and passed on through the generations. Though the style and content of the old company cultures differ from company to company, current leaders consistently confirmed the importance of their unique culture as a primary factor in the long term success of their company.  These values and beliefs form the fundamental culture of the company and are used to enhance employee identification with the business, thus integrating organizational and individual goals and objectives and building strong employee loyalty.

Current leaders of old companies in both the United States and Japan showed a significant commitment to managing the company according to the culture that had been developed over the past century. Top managers in the old companies were significantly more likely to be personally involved in teaching the culture to employees than were leaders in younger companies. And leaders in the old firms strongly indicated their intent to see that the culture continued on to the next generation through careful development of managers and selection of future leaders who understand and are committed to operating the company with the same values and beliefs.

Tuesday, November 4, 2014

Old Companies Survive By Being Financially Conservative

Frugal, lean, little (or no) debt - all of these terms describe a majority of the businesses that have "lived" for over 100 years.  They survive by saving up money during good years to help weather the lean ones and also to fund new opportunities when they arise without depending on external sources of financing. They finance new initiatives internally whenever possible, even if this means slower growth. Managers in these old companies tend to see themselves as stewards or custodians of the business and feel an obligation to manage the firm in a way that ensures its survival into the future rather than making a name for themselves through bold, risky actions. (One CEO gleefully told the interviewer how he ignored the advice a Lehman Bros. consultant had once given him about leveraging his business more.)

Though the old companies don't share similar cultures, there are some common behaviors that stem from this financial frugality. Many of these companies do not pay their employees high base salaries, but most of them share the wealth with employees in good years through bonuses or some other method of profit-sharing. Though they may not have the deep pockets of larger businesses in their area, these companies provide great support to local organizations such as the Little League, Rotary, Boys & Girls Club, etc. with time and donations.  Products and services offered by these firms tend not to be at the low end of the industry's price range, yet customers feel they receive good value. Suppliers seem to understand that the value of having a long-term customer is more important than getting the highest price. When they do need to go for outside financing, they don't usually have any trouble getting it (and at a favorable rate).  Perhaps their frugal tendency is also one of the reasons so many old companies engage in environmental sustainability efforts - they see these investments as a great way to save money in the long run.

Wednesday, October 29, 2014

Henokiens Members are 200-Year-Old Family Firms

If you want to read a profile of some pretty amazing companies, go to This is a newly redesigned website of the Henokiens International Association of Bicentenary Family Companies. Currently the Henokiens Association consists of 44 members from Europe and Japan. Though there are very few U.S. companies over 200 years old that are still being run by members of the founding family (three, by my count), my hope is that soon one of them will be added to this list of current Henokien members:

AKAFUKU (1707)
AE KöCHERT (1814)


C.HOARE & CO (1672)





HOSHI (717)
HUGEL & FILS (1639)

JEAN ROZE (1756)
J.D. NEUHAUS (1745)


MONZINO (1750)

OKAYA (1669)

POLLET (1763)

REVOL (1768)


TORAYA (1600)


Wednesday, October 22, 2014

I'm A Long-term Employee, But Will You Love Me Tomorrow?

Building relationships with employees so they stay with the firm for a long time was consistently listed as a key longevity success factor by 100-year-old companies. They clearly believe it is a differentiating factor. It may be important, but it does not appear to be statistically significant when compared to philosophies reported by younger companies. 

In our theoretical model of corporate longevity built from a number of case studies of old companies in both the U.S. and Japan, developing and retaining employees for the long term was one of the key factors.  This importance was confirmed in surveys of old companies in both countries through answers to items dealing with efforts to retain employees and investments in training and developing employees.  However, when testing the longevity model with young companies, they also indicated these things were important - though to a lesser extent than old companies, it was not a statistically significant difference.  The only statistically significant item was the effort old companies take to teach employees about company history and traditions (likely because younger companies don't yet have much history or many traditions).

Possible explanations for the lack of significant difference in old and young companies self-reported behavior toward employees is that young companies realize retaining well-trained employees will be of great benefit to their business. Another possibility is that younger companies report intending to operate this way, but have not yet been tested as to whether they will actually keep employees on the payroll during tough times the way the older companies have actually done.  Either way, it is clear that companies surviving for over 100 years believe long-term relationships with employees is a very important factor in their success.

Thursday, October 16, 2014

When It Comes To Change, Slow and Steady Wins the Race for Old Companies

Yes, old companies change and even innovate - they wouldn't have survived for over 100 years if they didn't. However, my research shows that the change process they use is quite different than that used by younger companies. Many might say they are too slow to change, but in the long run this seems to work to their advantage.

In his book The Living Company Arie de Gues explores behaviors of very large, very old companies. He says these companies are tolerant of "experiments on the edges," meaning corporate headquarters doesn't try to control or drive all the change within the firm.  When one of the "experiments" proves to have value, then it can be implemented on a wider basis.  This idea is similar to Peter Sims idea of "little bets" explained in his book Little Bets: How Breakthrough Ideas Emerge from Small Discoveries. In a recent article on corporate longevity in the McKinsley Quarterly former managing director Ian Davis observes: "A company that learns to adapt and change to meet market demands avoids not just the trauma of decline or an unwanted change of ownership but also very real transaction and disruption costs."

The vast majority of 100-year old companies are small to medium-sized firms that may not have a lot of room for experimenting on the edges or the capacity to support many little bets. So how do they go about innovating and changing? Many have different products from when they began and some are in completely different industries. Those that have stayed with their core product or service have still had to adapt to quantum changes in technology, global competition, vastly changing social and cultural mores over the last century. First, they constantly seek small, incremental improvements and adaptations. Second, they keep abreast of trends both within and external to their industry. Then, when it is determined that major change is needed, they take their time to carefully plan and implement the change.

My research indicates that old companies take a significantly longer time to plan a major change than do younger firms.  The reason they take time when making moving the company in a new direction is that they want to bring their constituents along with them, so they make the effort to explain the need for change to employees, suppliers, and customers in order to convince them of the necessity for the new approach.  In the process of explaining the need for change, the leaders are mindful of honoring all that was good about the past even though that may not be what is needed for the future. Leaders also make clear that, though what they do as a company - or the the way that they do it - may change, the core values of the firm will not change.

Because old companies take time to make major change, the casual observer often may not even notice that they are changing.  Perhaps this is why so many people think of old companies as dinosaurs - watching the fast development of entrepreneurial firms is far more exciting.  Well, the old companies may be slow-moving, but they definitely are not dinosaurs. And old companies may not be as exciting as new start-ups, but many more of them will still be around decades from now. To once again quote Ian Davis: "Survival is the ultimate performance measure."

Tuesday, October 14, 2014

The Profit Paradox

GBC Summer logo 7cm

I just returned from the Innovation Institute's Global Business Conference in Dubrovnik, Croatia where my presentation on the "survival" strategies of 100-year-old companies received a great response.  (Dubrovnik is a gorgeous city, by the way, and I highly recommend both the venue and the conference.)  One of the practices of old companies that received the interest of the conference attendees was the tendency for these companies to look at profit as the necessary fuel to keep their companies operating rather than as the goal or purpose of their business.  Don't get me wrong - these companies are profitable; they wouldn't have survived for over 100 years if they weren't.  And if they have to choose between profit and growth, they will choose profit.  They just don't confuse needing to be profitable with the purpose of their business.


Corporate mission statements are very popular today and you can see them on almost every firm's website. These old companies have been talking about the purpose of their business in "missional" terms for decades, though they might not call it a Mission Statement.  Whether it's to make great places to work (office furniture manufacturer), enhance human life (pharmaceutical company), or provide a bit of sunshine to every customer's day (candy store), the purpose of these old companies is clear and meaningful.  They talk about their purpose all the time - with employees, with customers, with suppliers, their local community, academic researchers, and pretty much anyone who will listen. They love what they do and it shows. Their mission statement is not just words developed for their website because some management consultant told them they needed one.  The mission of these old companies is real, and it is what has driven them to success for over a century.

The profit paradox is this: though these companies do not talk about maximizing profit as their goal or purpose (many don't really like to talk about it much at all), they are very profitable firms.  In Japan (where my research partner was able to obtain profitability data, even from small privately-owned firms) companies over 100 years old were twice as profitable as the average Japanese firm. I have not been able to obtain such data from U.S. companies, but I suspect they are also more profitable than average.  This is what has enabled them to weather tough times to survive for over 100 years.  They don't focus on profit as the purpose for being in business, yet they are very profitable.  As one CEO reminded me, profit is the result of doing well what they do as a company, not their goal.


Over the next month I will be posting other behaviors/strategies/principles exhibited by members of the corporate century club.  These are statistically significant, cross-cultural behaviors based on ten years of research in both Japan and the United States. I hope you find this information as interesting as do I.


Thursday, September 18, 2014

Companies Turning 100 in 2014


Businesses "living" long enough to celebrate their 100th anniversary are rare and apparently getting ever more scarce.  Yale lecturer Richard Foster says the average lifespan of companies on the S&P 500 has decreased by more than 50 years in the last century: while successful companies lasted an average of 67 years in the 1920s, they typically exist for only 15 years today. So we should celebrate those firms who do make it to their 100th anniversary.  They have survived world wars, economic depression, huge advances in technology, globalization, and major social/cultural change to continue to serve their customers, provide a living for their employees, and contribute to their communities.

Here is my list of U.S. companies that reached the century milestone in 2014.  If you know of others, I would love to hear from you.

American Licorice Company
American Pop Corn Company
California Casulty
George P. Johnson
Johnson Smith Co.
Mechanical Devices Co.
Mine Safety Appliances
RS Lewis Funeral Home
Russ & Daughters
Utility Trailer Manufacturing Co.
Vogue Tyre & Rubber Co.

Friday, September 12, 2014

New Michigan 100 and Corporate Century Club Member: George P. Johnson (GJP)


George P. Johnson may have invented the field of experiential marketing. Though starting out in 1914 as a flag-making and sail-repair business in Detroit, it quickly established itself as a trade show and events management firm for Detroit's automobile industry. In the last few decades it has expanded to become a private multinational firm specializing in experiential marketing and brand management. Headquartered in Auburn Hills, Michigan it now operates 29 locations throughout the world.

Tuesday, September 9, 2014

New Corporate Century Club Member: American Pop Corn Company

When buyers offered Cloid H. Smith less than he wanted for the corn he grew on his farm land in Sac County, Iowa he decided to cut out the middlemen and in 1914 the American Pop Corn Co. was born in Sioux City where they have been for the last 100 years.  Sold under the brand name Jolly Time, the company is still in the Smith family, with 4th generation cousins running things.

The word "innovation" may not quickly come to mind when thinking about popcorn, but American Pop Corn Co. exhibits the dedication to protecting and developing unique technology seen in many companies that have survived over a century.  Beginning with the patented popcorn cribs Cloid designed that "put Jolly Time Pop Corn above the rest in terms of popability" (moisture content is essential to popping performance) and continuing to their patented cleaning, drying, and sorting process called "volumization," their technology focuses on obtaining a "guaranteed pop."  The company also reports innovations in packaging from the tin popcorn can to a pail (which they claim sparked the idea for the beer can), and was the first ever food brand to receive the Good Housekeeping Seal of Approval.  Whether you are a classic "BlastOButter" fan or prefer one of the other versions of their popcorn, chances are you have tasted this company's product.

The company reports having contracts with several multi-generational growers, exhibiting another characteristic of the Corporate Century Club: long-term relationships with suppliers.

Welcome to the Corporate Century Club!

Monday, September 8, 2014

French Paper Company



Established in 1871, French Paper is a 6th generation family-owned company in Niles, Michigan. One of the last small, independent mills in the country, French Paper exhibits the qualities adhered to by many of the "Corporate Century Club" - including a commitment to the environment.  It has been 100% hydro-electric powered since 1922, using power from a small hydro-electric power plant at the Niles dam.


Friday, September 5, 2014

Michigan's Century Club

I've been working at updating the list of Michigan's companies over 100 years old. Below is the most accurate data base I can put together at this time. The good news is that there are over 130 companies on the list. However, I may still be missing many small businesses, so if you know of a company that should be in Michigan's Business Century Club, please let me know.  Here's the list:

Acme Mfg.                                        1910                            Auburn Hills
American Seating                              1886                            Grand Rapids
Armstrong Int’l                                  1901                            Three Rivers                 5th gen
Atkins Hardware & Furniture       1905                            Vassar
Bahle’s (dept. store)                          1876                            Suttons Bay                             
Bauer’s Jewelry                                 1891                            Saginaw
Bissel                                                 1889                            Grand Rapids
Bond Decorating                                 1891                            Iron Mtn.
BorgWarner*                                       1880                            Auburn Hills
Brammal Industrial Supply                  1873                            Benton Harbor
Buckley’s Shoes                                  1894                            Bad Axe                       4th gen
Buis Mattress                                      1913                            Holland
Bulman Products                                 1905                            Grand Rapids              
Butzel Long                                        1854                            Detroit
Carhartt*                                            1889                            Dearborn
Carlson’s Jewelry & Gifts             1894                            Cadillac
Cascarellis Restaurant                         1909                            Albion                          4th gen
Central Michigan Paper                        1885                            Ada
Chelsea Lumber Co.                             1908                            Chelsea
Chelsea Milling                                    1901                            Chelsea
Chelsea State Bank                              1897                             Chelsea
Chris Engel’s Greenhouse                     1883                             Detroit
CMS Energy*                                        1890                             Jackson
Corbishley’s Clothing                           1876                             Bad Axe                       4th gen
Crandill Funeral Homes                        1902                             Fremont, White Cloud
Daniel Orr Sons Hardware                     1875                             North Branch
Dekker’s Jewelry                                  1882   (in NL)                Zeeland
Detroit Store Fixture Co.                       1898                             Detroit
DeVries Jewelers                                   1901                             Grand Rapids
DeWitt Barrels                                       1893                             Marne
Dickenson’s Hardware                            1876                             Fennville
Diltrich Furs                                           1893                             Detroit
Doncker’s Candies & Gifts                1896                             Marquette
Dow Chemical*                                       1897                             Midland
Dykstra Funeral                                      1900                             Holland
Ebonex Corp.                                          1878                             Detroit Area
Edge-Sweets (ESCO)                                1887                             Grand Rapids
Eikenhout, Inc.                                       1894                             Grand Rapids
Federal Mogul*                                        1889                             Southfield
Feigi’s Interiors                                       1854                             Saginaw
Ford Motor Co.*                                       1903                             Dearborn
Frankenmuth  Brewery                             1912                            Frankenmuth
Frankenmuth News                                  1906                            Frankenmuth
French Paper Co.                                     1871                             Niles                             6th gen
Fris Office Outfitters                                1900                            Holland                          5th gen
Fritz Family Restaurant                            1902                             Richville                        5th gen
GB Russo & Son                                 1905                             Grand Rapids  
General Motors Co.                                  1908                             Detroit
George Jerome & Co.                        1828                             Roseville
George P. Johnson                                    1914                             Auburn Hills
Getz Dept. Store                                      1880’s                           Marquette
Gilbert Chocolates                                    1900                             Jackson
Golden Shoes                                            1905                             Traverse City
Gordon Food Service                                 1897                             Grand Rapids  
Graafscap Hardware                                  1860                             Holland           
Groskopf’s Luggage                                   1881                             Grand Rapids
Harley Ellis Devereaux                               1908                             Southfield                    
Heidi’s Old Village Flowers & Gifts     1905                             Plymouth
Henry the Hatter                                       1893                             Detroit
Herman’s Boy (Coffee Roaster)                  1901                             Rockford
Herman Miller Inc.*                                    1905                             Zeeland                       
Herter Music                                              1903                             Bay City
Hoekstra’s Hardware                                  1867                             Kalamazoo
Homer Monumental Works                          1889                              Homer
Holland Peanut Store                                  1902                             Holland                        5th gen
Independent Bank Corp                               1864                             Ionia
Irwin Seating                                              1908                             Grand Rapids
Jesperson’s Restaurant & Pie Shoppe   1903                             Petoskey
Johnson’s Studio Camera                            1892                             Cheboygan                   4th gen
Keep & Martinson Lumber                    1905                             Tekonsha
Kelloggs*                                                    1906                             Battle Creek
Kindel Furniture                                         1901                             Grand Rapids
Koeze Co.                                                  1910                             Grand Rapids
Kositchek’s                                                1865                             Lansing
Krzyske Bros Co.                                         1890                             Monroe, Waltz
Langeland- Sterenberg Funeral                   1860                              Holland
Lokers Shoes                                              1913                             Holland
Lovewell’s Corner Store                              1905                             Lupton
Mapes Furniture                                         1892                             St. Ignace
Martins Shoe House                                    1846                             Monroe                                   
Masters LaLonde Shoes                               1879                             Alpena
MBT Financial Corp                                     1859                             Monroe
McClellan’s Frankenmuth Woolen Mill          1894                             Frankenmuth
McKee Monument & Mercantile            1901                             Marshall
Metcaff & Gonkhoff Funeral                1894                             Grand Rapids               5th gen
Michigan Ladder                                         1901                             Ypsilanti
Milkins Jewelers                                         1905                             Wyandotte                   4th gen
Model Drug & Apothecary Shop            1908                             Holland
Moore & Carter Lumber                      1904                             Sandusky,  Croswell
Mosher’s Jewelers                                     1898                             Port Huron                   4th gen 
Murphy & Caris (Law Firm)                 1905                             Fremont                                  
Oliver Products                                         1890                             Grand Rapids              
Padnos                                                      1905                             Holland                        4th gen
Palmer Auto Svc.                                       1912                             Frankenmuth
Perrigo                                                     1887                              Allegan
Pewabic Pottery (non-profit)                      1903                             Detroit
Pomeroy Funeral Home                              1890                             Croswell
Power’s Clothing                                        1892                            Jonesville
Raymond Hardware                                   1850                             Port Sanilac
Reusch Jewelers                                        1885                            Cheboygan                   4th gen
Rogers Sterling Jewelers?                           1910                            Chegoygan
Schaefer Bierleen Cars                               1852                            Frankenmuth              6th gen
Sempliner’s Bride & Formal                 1873                            Bay City
Sieb Plumbing, Heating & A/C             1868                            Monroe            
Siegel Jewelers                                          1889                            Grand Rapids
Skaff Carpet & Furniture                     1911                            Flint
Smith Floral & Greenhouse                  1903                            Lansing
Staffan-Mitchell Funeral Homes                  1853                            Chelsea
Star of the West Milling Co.                        1848                            Frankenmuth
Steelcase*                                                  1912                            Grand Rapids
Steven’s Van Lines                                     1905                             Saginaw          4th & 5th gen
Sunnyside Florist                                        1894                            Owosso
Superior Sports Store                                  1909                            Holland                   4th gen 
Standard Supply & Lumber                   1904                           West Michigan            
The Yale Expositor                                      1882                            Yale
Vail Rubber Company                                  1904                            St. Joseph
VanPoppelen Bros. Inc.                               1904                             Bay City
Varnum                                                      1888                             Grand Rapids        
Vortuba Leather Goods                               1876                             Traverse City
Vredeveld Shoes                                         1909?                             Fremont
W.B. Hayden & Sons Hardware             1886                             Cassopolis
Webber’s Floral & Gift                         1905                             Sault Ste. Marie
West Branch Flour Mill                                1892                             West Branch   
West Michigan Printing (?)                           1886                             Ada
Westbrook True Value Hardware                 1888                              Croswell
Whirlpool*                                                  1911                              St. Joseph                         
White Insurance Agency                              1873                             Fremont
Willis Sausage Co.                                                                           Frankenmuth
Winglemire Furniture                                  1858                             Holly
Wm. B. Eerdmans Publishing                       1905                             Grand Rapids
Wolverine Worldwide*                                1883                              Rockford         
WW Fairbairn & Sons                           1890’s                           Alanson
Yaeger’s Shoes                                           1846                              Monroe                        5th gen
Yale Expositor                                            1882                              Yale
Zeeland Print Shop                                     1908                              Zeeland                       4th gen