A Business’ Life Expectancy Has Less to Do with Today than Tomorrow
According to a recent report by Deloitte, the life expectancy of a Fortune 500 went from an average of 75 years a half century ago to 15 years today. That’s shocking. But, when you consider Google’s $3 billion sale of Motorola to Lenovo that it had purchased for $12.5 billion from IBM, you begin to understand how so many large corporations can find themselves on the block.
Why do businesses fail so often?
If they are being run as if there will be no changes in their clients’ interests and behaviors or that the internal operations will never need to change, time can catch them by the tail and throw them out of the ring.
Take Blockbuster video stores. Remember them? They sure came and went quickly didn’t they. Why? Because their then-CEO was simply convinced he knew what was the right direction and didn’t invest one dime into studying new scenarios, so the inevitable kicked in. People started downloading and streaming movies, and he found his company on the outside looking in.
When it comes to strategically planning for the future, there is one absolute question that any company of any size needs to answer. What is our next stage of growth, and how are we going to get there? Assuming you won’t get there is far safer than assuming you will. If not, you put your entire company at risk.
Ignoring a problem doesn’t make it go away; usually it makes it happen faster.
Here are a several ways to frame your next stage of strategy:
- Invest in your tomorrow, not today’s overhead. P/L statements tell you where you’ve been, not where you’re going; yet most CEO’s swear by their monthly reports. It makes them feel good reading about how well their company did (note that’s past tense), which keeps them blind to what might happen next. That’s why investing in your strategic planning and researching your clients and markets is so essential. Without it, you’re flying blind and have an equal chance or greater of failing.
- Hire for tomorrow; don’t just fill today’s slots. Yes, I realize how ridiculous this sounds but think about it. Let’s say you lose an outstanding employee in an area of your company. Can you think of a better time to rethink that area? Who knows, maybe you’ll come up with a new way of doing things that will transform your company in a way you never imagined.
- Be flexible in your schedule and everyone else’s. Talk about being counterintuitive! But the reality is that most employees will work as hard as they want to regardless of what you say. So the best you can do is hire by character, not by skills, unless we’re talking about a technical position like a DNA research director. But even then, hiring by character is still an excellent solution if you can find someone who also is technically expert.
Having researched hundreds of companies over 30 years, I have to admit there are some CEOs who can guess their way through their entire careers and do quite well. But the vast majority are not that lucky and need to do their homework on not only what’s going on today but also what is going to happen in the future.
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Tom Marin is the Founder and President of MarketCues, Inc., a national consulting firm. He has worked for some of the world’s largest corporations and middle-market firms. Tom’s focus is to help CEOs drive their strategy shifts and strategic growth programs. Follow MarketCues on Twitter. Tom also welcomes emails new LinkedIn connections or calls to (919) 908-6145.