Sobering thoughts for the New Year?

I read recently that the earliest share certificate dates back to 1288 when Stora Enso granted Bishop Vateras 12.5% of a Swedish copper mountain. Stora Enso, by the way, is still trading as a pulp and paper manufacturer!

Intrigued, I discovered that the world’s oldest company  is claimed to be a hotel  in Japan, founded in 705, and according to the credit rating agency, Tokyo Shoku, there are more than 20,000 Japanese companies over 100 years old.

Founded in 705

And yet when researchers, Arnold King and Nick Schulz reviewed, the 1957 Fortune 500 list against that of 1997 they found that just 40 years on only 74 companies remained! They called this Creative Destruction.

Further investigation led to a paper by Professor Richard Foster of Yale who found that the average lifespan of an S&P 500 company has decreased by more than 50 years in the last century, from 67 in the 1920’s to just 15 today!

                                      Just 15 years

The Japanese believe the secret to corporate longevity is to stay small, avoid takeovers and mergers, and to have a belief that their mission is not just the constant pursuit of profit.

King & Schulz however think it’s about keeping up with innovation.

                                                                         Role of Innovation

I’m not sure that staying small and making profit a secondary objective is the sort of advice that is appreciated from consultants!

 But focusing on Innovation………….that’s a different matter, but then I would say that wouldn’t I!