The decreasing life expectancy of Fortune 500 companies is no secret – from about 75 years half a century ago to 15 years now! Martin Reeves’ TED talk “How to build a business that lasts 100 years” becomes all the more interesting in this context.
On the one hand, there is the day to day pressure of meeting business goals (read metrics) while on the other, there’s really no telling what black swan event in the business’ landscape might happen. As the thinking goes, the business would have to monitor changing consumer needs and ‘disrupt’ itself before others do the job for them.
The Four Horsemen seem to have an ability to balance these two forces quite well. Microsoft is now reviving itself. That would explain why they are now pretty much platform monopolies who increasingly have only each other as competition. Most other businesses focus predominantly chase growth, with efficiency as a key driver and corresponding metrics as score keepers.
In Douglas Rushkoff’s “Throwing rocks at the Google bus”, which I highly recommend (not throwing rocks, just reading the book), I found a fantastic nuance on growth. To summarise, growth is usually treated as a scalar, with a singular aspect like revenue or profits being the only factor of interest. What if instead it were treated as a vector – with not just magnitude, but direction. Essentially, velcity of growth and not speed of growth.
These would allow focus on not even just revenue-related aspects like profitability and customer satisfaction, but also allow an organisation to invest and work on areas that would pay off only in larger swathes of time. The argument is that the skill sets and perspectives developed through these activities would benefit the organisation more in existential crises than the tunnel vision that efficiency breeds. The agility and redundancy to survive a ‘black swan’, maybe even thrive.
The buzzword is ‘digital transformation’, but the more I think of it, the more I figure it is just the above. At an operational level, the ability to spot trends, test quickly, and scale even while carrying an entire organisation forward. It’s just that digital provides a vast array of tools to do this. And what does it remind me of? Evolution. The definition of life might have changed from unicellular organisms to us and in future, will be something I can’t fathom now, but life continues even after several attempts at itself! And there’s a seemingly simple process that has ensured this – differentiate, select, amplify. Organisations designed for evolution, where growth is defined better, maybe that’s the secret of long life.
Bonus Read – The soft bias of under specified goals