In the space of a few months in 2023, diametrically opposite news was published in different print and digital media: a giant Japanese company invests several hundred million dollars in a leading Ecuadorian fishing industry company, a construction company turns 50 years old and found itself among the largest companies in the country; while the barely two-year-old airline had to shut down its operations.

It is an unquestionable fact that companies do not have a bought life and as they are born and grow, so they die. McKinsey found that the average lifespan of companies that appeared in the Standard & Poor’s 500, an index that measures the performance of the 500 companies with the largest market capitalization on various stock exchanges in the United States in 1958, was 61 years, and today it is less than 18 years. . It is therefore important to try to answer the question: what determines whether a company will last over time?

The first answer lies within the company: six years of study and more than 700 interviews with CEOs led James Fischer to publish his findings in the book Navigating the Growth Curve, he found that money and processes are easy to manage compared to the dynamic impact that people bring, delegation and commitment of collaborators, as well as acceptance of the vision. The gravitating factor is the ability to proactively address internal challenges as the company grows, the complexity resulting from more collaborators, systems and structure increases.

Another answer comes from the environment, from changes in markets, customers and technology. For example, another study conducted by Michael Felton and published in The New York Times shows that new technologies are increasingly being adopted by the majority of the population in less time, the telephone was adopted in 15 years, the Internet in less than 10 years, artificial intelligence (AI), which emerged strongly in 2023, will surely be used by everyone in less than five years.

However, research from Harvard Business confirms these two trends, pointing out that only 13% of the reasons for revenue losses in companies are external factors: regulatory measures, economic slowdown, geopolitical changes, labor market inflexibility, among others. And contrary to what many think, 87% is under the control of CEOs (CEOs) and their management teams, when the company does not have a differentiated competitive position, poor management of innovation, dependence on key customers, mismanagement of diversification, among others.

This study agrees that governments and their public policies are not decisive for the success or failure of businesses. Of course, these are important variables to consider when conducting analysis and making key decisions such as defining the clients to serve, value proposition, and revenue generation methods. What it shows is that companies that last do so because of strategic planning, effective management and great visionary leaders behind them. (OR)