What makes a thriving business, a business with long-term success, a business you can pass down to your kids?
Even many businesses that are successful at first tend to lose that success as time goes on. In 1920, the average life span of a business was 67 years. This dropped to 15 in 2015 and is now down to 4 years. Top experts in major brands, ad agencies, business schools academia, technology and consultancies were asked what goes into long-term success and here’s what they said.
The Most Important Characteristic of a Successful Business
Nearly all of the experts surveyed said that speed and agility are the most important characteristic of a business that will be successful in the next 15 years. However, one outlier made a seemingly contradictory point.
Risk aversion and short-termism rule in the world’s board rooms. This attitude is entirely understandable. And entirely wrong.Sir Martin Sorrell, S4 Capital
Although they look like opposites, the most successful companies are able to be both agile and focused on the long-term. How can this be?
It All Starts with a Purpose
You, the business owner, need to sit down and think about the purpose of your business. It should go beyond the idea of making money, and beyond being the biggest or best in your industry. It may help if you think about why you started the business in the first place. Here are some examples from well-known companies to get you started.
- Patagonia – “We’re in business to save our home planet.”
- Amazon – “Our vision is to be Earth’s most customer-centric company.”
- Pedigree – “Everything we do is for the love of dogs.”
- Nike – “To experience the emotion of competition, winning and crushing competitors.”
- Wal-Mart – “To give ordinary folk the chance to buy the same things as rich people.”
- Disney – “To make people happy.”
The main job of the founder, owner and top executives is to infuse this purpose into everything that the company does strategically and into its people. The purpose gives the company a direction to go in to achieve long-term success.
What About Agility?
The agility is achieved by the people in the organization. Research shows that companies that are organized in a very hierarchical way are slow to react to market forces and therefore tend to fall behind their more nimble competitors. A flat organizational structure gives individual employees the agency to notice changes in the market, come up with solutions and confidently present those solutions to the executives.
A Word of Caution
Just to be clear, being agile is not the same as being distracted or panicked by every shiny new social network or trend. Being agile means being tuned into underlying customer needs and market forces. This includes new competitors or products, technology and economic issues. The company needs to ready to respond strategically, then tactically.
The two aspects, long-term vision and on-the-ground agility come together when senior management consistently reinforces its vision and then gives employees free rein to react as needed within that vision. This combination leads to the company’s long-term success as well as short-term gains. For marketing, this means that the ratio between brand building and short-term initiatives should be somewhere around 70/30.
Be sure to communicate your vision through both word and action to your employees but also through your marketing communication. Your vision is not only a motivator for your staff but also should be universal and compelling enough to motivate potential customers to do business with you.
Pro Creative can help you formulate and communicate a compelling vision or purpose both internally and externally. In times of upheaval, this shift may be what puts your company on the road to long-term success.