How to achieve business longevity

The average lifespan of top global businesses has decreased to just over a third of what they were sixty years ago. Those who evolve to meet the changing needs of their customers will stay competitive, according to Dr Martyn Davies, chief executive of Frontier Advisory. In the 1950s the top 500 companies had an average lifespan of 45 years, by the early 1970s companies lasted an average of 26 years, and today they are expected to have a lifespan of 13 years, according to Davies. Richard Foster, conducting a study for Yale University, said recently: “By 2020, more than three quarters of the Standard & Poor 500 will be companies we haven’t heard of yet.” Presenting case studies of the top five global companies, their lessons learnt and what they did right in terms of customer centricity, Davies touched on Red Bull which took on the soft drink giants and cornered a large chunk of the market through creative advertising and marketing. “Red Bull spends 30% of its budget on marketing and the company wasn’t afraid to disrupt the status quo of what customers had, until then, perceived cold drinks to be,” he said. Apple is an example of innovative thinking, giving customers something they didn’t need and making it such an invaluable part of their everyday lives that they now demand it, said Davies. ”Furthermore, Steve Jobs was a strong, powerful personality who publicly drove the success of the company to be the most valuable public company in history,” he said. According to Davies, in 2000 Apple was worth US$9 billion. By 2012, the company was worth $623 billion. Davies says that good business practices are not restricted to companies but are equally applicable to countries. He uses the example of Singapore which was a global nonentity when it gained independence in 1965. “Under the leadership of Prime Minister, Lee Kuan Yew, Singapore is now the world’s fourth wealthiest country and the Singaporean economy is known as one of the freest, most innovative, most competitive and most business-friendly,” said Davies. The top three things successful, competitive companies do right are: 1. Having a disruptive business model and being unafraid to take risks. 2. Understanding the importance of innovation and a sense of purpose. 3. Strong personalities (individuals) often drive the success of a business. INSERT It's not just companies but countries such as Singapore that achieve success on the back of a strong personality. – Martyn Davies