100 over 100 on Twitter

In June I stated a new line on Twitter, #100over100, to highlight Michigan companies that are over 100 years old.  I started with companies in West Michigan and should make it up to 40 with these.  Then I will branch out to other Michigan companies until I reach 100.  Right now, however, I only have around 75 Michigan companies in my national data base of companies over 100, so if you know of any please let me know.  It is particularly difficult to identify small, privately-owned companies unless you live in the area and are familiar with them.  When I'm finished, I plan to contact our governor to see if I can convince him to start the kind of "Century Club" that is in place in some other states. (Each year the governor in these states holds a ceremony for all companies over 100, with a special welcome to those just hitting the centennial mark.)

I love seeing new companies start and entrepreneurship is certainly an important part of our state's economic recovery.  But I also want us to recognize the amazing achievement of those firms that have survived world wars, economic depression, globalization, huge changes in technology, and major socio-cultural changes to serve their customers, provide jobs, and add vibrancy to their local communities for over 100 years.  So check out my twitter (@vtenhaken) and see how many companies you recognize - some are well-known public companies, though most are small, family-owned firms.

100 Year Old Companies Are Built on Relationships

One of the results of our research on old companies in Japan is the emphasis they place on relationships.  They value and work at maintaining long-term relationships with employees, customers, suppliers, other business partners and their local communities. Whenever presenting this information at conferences, the response we often received was "Well, that's Japan...it's a cultural thing." There was much skepticism about whether we would find similar results in other cultures.  However, when talking to CEOs of U.S. companies that have survived for over 100 years they echoed the importance of relationships, so we decided to use the same survey administered in Japan to find out how old U.S. companies responded.  We have now collected enough surveys, completed our initial analysis, and are in the process of writing up the results.  My research partner, Makoto Kanda, will be coming to the U.S. in August so we can discuss the statistical data and draw conclusions.  Stay tuned.

In the meantime, I have started to tweet a list of local companies that have thrived for over 100 years (#100over100 @vtenhaken if you're interested).

65 Surveys Completed

Thank you to all those 100-year-old U.S. companies that have filled out surveys for my research!  We are now in the process of tabulating the responses and will compare them to responses from old Japanese companies.  So far it looks like there are many similarities, but we will need to conduct statistical analysis to test for significance.

What Is Unique About Old Companies?

My research partner in Japan, Makoto Kanda, recently completed a study of over 1,000 companies to test our theoretical framework regarding the behaviors of old companies that have enabled them to survive for over 100 years.  By comparing the survey results from 'young' companies with those from companies founded before 1911, he came up with several statistically significant items which indicate we are on the right track with our hypothesis regarding longevity factors.  Here are a few of the results:
* Old companies scored significantly higher in every aspect of developing future leaders and succession planning
* Old companies put much more emphasis on their relationships with suppliers, customers, and local communities
* As might be expected, the old companies focused much more on tradition and improving what they see as their core strengths; when large-scale change is necessary, they admit to taking a long time to plan and implement such change
* The old companies have conservative financial practices (emphasize profitability over sales volume; are reluctant to borrow money)

The complete results have been published in the IMDA book "Global Competitiveness in a Time of Economic Uncertainty and Social Change: Current Issues and Future Expectations" (ISBN: 1-888624-11-6).

A Theoretical Framework for Corporate Longevity

Makoto Kanda, my research colleague in Japan, has completed his research of shinise (revered Japanese companies that have remained in business for a very long time).  The first phase of his research was to conduct in-depth interviews in 17 companies out of which he built a theoretical framework describing common factors observed in these companies that have survived well over 100 years.  He then developed a survey to test the five factors identified in this theoretical framework.  It is this survey that we are using both in Japan and in the United States to test our hypothesis: In Japan he is comparing survey results of shinise and non-shinise to see where there is a significant difference on these factors; then we will compare results of 100-year-old U.S. companies to those of Japanese shinise.  Since we are now ready to begin reporting some of our results, I thought we should start with an explanation of the five factors that form the theoretical framework we are testing.

Our hypothesis is that there are five factors which together result in unique corporate behaviors leading to longevity.  These factors are:
1.  Building corporate identity through careful management of organizational culture
2.  Protecting core/unique strengths through a balance of maintaining tradition and continuous improvement and innovation
3.  Strong relationships with business partners (customers and suppliers)
4.  Investments in developing employees, with a particular emphasis on leadership succession
5.  Strong relationships with the local community

Future postings will explain the results of our research: check back to discover what behaviors are unique to long-lived firms!

Surveys of 100-Year-Old Companies Beginning

Now that I have returned from a semester teaching in England I am re-starting my research on 100-year-old U.S. companies.  (I was interviewed last month by the BBC for an article on corporate longevity.) My student researchers and I are starting with small to medium sized companies, only because I suspect it will be easier to contact a person within the firm who is willing to work with us on completing our survey.  The survey itself has been developed by my Japanese colleague, Makoto Kanda, who has used the instrument to gather information on behaviors and strategies of old Japanese companies.  Once we obtain enough information on U.S. companies, we are planning to do a comparative analysis.  If you work for a 100-year-old company or know of someone who does, please email me at tenhaken@hope.edu. The survey only takes a few minutes to complete and all individual company information will be completely confidential.  I look forward to posting the results of this research in the future - it will all be in consolidated form, with individual companies identified only with prior permission. We hope to work with many interesting old companies to discover their 'secrets' to living a long life!

3 Principles of Corporate Longevity

I came across a study by Zenlin Kwee from the Erasmus University in Rotterdam that discusses some strategic principles of long-lived firms.  As with most other studies of old companies, this one focuses on a very small data set. In fact, Kwee's work is an in-depth study of just two firms in the same industry: Shell and BP.  The three principles of "sustained strategic renewal" which he identifies are interesting:

1. Manage the internal rate of change to match or exceed the external rate of change
2. Optimize the principle of self-organization (this principle implies the delegation of decision making to the lowest possible level and maximizing capabilities at every level of the organization)
3. Engage in concurrent exploitation of existing capabilities and exploration of new opportunities (this involves balancing innovation and knowledge creation with improvements in productivity process, efficiency and product extensions and enhancements)