Business’s longevity requires good leadership
The ability of a company to weather change and compete over decades, or even longer, is a primary criterion for determining its long-term success. Every organization is different, and there is no exact formula for running a successful firm for the long haul.
In general, however, businesses that survive for an extended period do so by providing products or services that consistently meet client demand, employing subtle growth plans, and having a thorough awareness of the competitive environment. Of course, this is easier said than done. A small number of companies on the Fortune 500 list have been in operation for more than 100 years, which is unusual. What organizational qualities do you believe are responsible for the company’s 100-year existence?
Companies that have been in operation for more than 100 years, particularly very profitable ones such as those on the Fortune 500, have maintained their viability in one of a few ways.
First and foremost, the organization is a chameleon. That is to say, the company had transformed to meet the needs of a changing market environment. Cigna is an excellent example of this. It is one of the oldest companies on the Fortune 500 list, but the job it does today is substantially different from the work it did when it first started. For example, initial plans called for it to be set up as an investment fund that would serve as an annuity to the investor who lived the longest (Cigna Global Health, 2014).
Between then and the worldwide healthcare conglomerate that exists today, there was a maritime insurance company that later expanded to include fire, property, life insurance, and other products. However, the corporation had to alter its business strategy because of shifting customer demand.
Another method of achieving old age for businesses is identifying a niche and sticking with it. This is, without a doubt, the most popular method. Companies such as Colgate-Palmolive, Lockheed Martin, Pfizer, Coors, Edison, Ford, Western Union, and Deere have all discovered a niche market that is unlikely to see a reduction in demand in the foreseeable future. Although their product offerings may change, the overall nature of their industry has stayed constant.
Last but not least, there is the absorption approach. Companies acquire other businesses, and hence a company that is exceptionally profitable now may have its origins hundreds of years ago due to a merger with another business.
It is uncommon for companies in the Fortune 500 to be more than 100 years old. So it may be true that it is unusual for a company that appears in the 500 to make it to 100 years.
However, according to my calculation, 183 companies are more than 100 years old as of 2018 (Rapp & O’Keefe, 2018). That is 36.6 percent of the 500 companies created before 2022, so I would hardly call that a rare occurrence.
A study of organizations with that kind of tenacity would be pretty interesting to follow, for example, how many years they have appeared on the list, what they did during their lower profit years, and so forth.
Finally, because the factors and decisions that influence the longevity of a business are so numerous, companies may find it beneficial to seek the assistance of those with specialized knowledge and services to assist them in adapting to change, mitigating risk, and making critical strategic decisions. Chase has a proven track record of offering firms unique opportunities. These industry-specific financial solutions help them position themselves for long-term growth and success.
Cigna Global Health. (2014, October 31). Global Health Benefits. Retrieved from Cigna: https://web.archive.org/web/20141031074506/http://www.cignaglobalhealth.com/why-cigna/global-expertise/global-expertise.html
Rapp, N., & O’Keefe, B. (2018, May 21). See the Age of Every Company in the Fortune 500. Retrieved from Fortune: https://fortune.com/longform/fortune-500-through-the-ages/