How Many Years Can A Business Survive?

On the average, a company survives more than thirty years. However, there are exceptions of ... 700 years

 During the last years, experts in Europe and America who are preoccupied with the average time of a company's survival, have proceeded in systematic researches. They have reached the conclusion that a typical business does not exceed the twenty years of living. However, it is clear that perennial exceptions exist. Consequently, Stora, a Swedish company, has survived for 700 years. This is a world record, very difficult to be broken.

 But which are the elements that differentiate the companies' lifetimes? According to the results of a recent research, which was realized by a mixed team of professors and executives, with Arie de Geus (a former top executive of Shell) at the head, most business "die" young because their policy and practice are determined, exclusively, by their economic results. In these companies, executives focus their interest and action on production and disposal of products or services and they forget that businesses are "communities" of people who work in order to keep them "alive".

On the contrary, the top executives of "living companies", companies that survive for many years, consider themselves and their colleagues the living cells of companies. Their priorities and their attitude reflect their commitment to secure the company in a radically changing environment. They believe that profit is of vital importance for a company as oxygen is for human beings. It gives life. But they do not stop there. They constantly search for new ideas in order to improve the company's functions, they create opportunities for their personnel, they always train their staff, they cultivate good communication and harmonious cooperation and they are eminent for the excellent quality of the products and services that they offer.

Companies with this kind of characteristics and executives, are going to survive in a world where survival and success depend on learning capacities, constant training and adjustment in the fluid environmental conditions instead of depending only on economic results and efforts for improvement. It is a common knowledge that efforts for constant increase of production and profit cause strain and can have negative effects in a company's function. This dimension was spotted by clever businessmen many years ago and therefore they have changed their policy towards their human resource.

Last years, great importance is attributed to the so-called "communication of change". Since companies are aware of the fact that nothing - neither life nor activity - lives forever, it is necessary to proceed to profound changes before facing the danger of getting out of the market. This is vital for their survival. These changes though, should be accepted and supported by the staff. Otherwise the danger of fatal unrest exists. Thus, the challenge for a company, which wants to survive for many years is the way it treats its personnel in a professional and social level. 

Into that context a company should answer the following crucial questions:

• Which person will assume the responsibility of transmitting the change in the company and which are the qualifications he/she should have?
• Where do the most significant arguments that legalize change lie?
• By which way do employees prefer to be informed for the changes and for which reason they reject certain techniques of communication and information?
• What do employees have to know in case of dismissals and which communication policy is being adopted in that case?
• How can whispers, inside and outside the company, be confronted especially when changes involve the downsizing?

From these, it becomes obvious that a company's longevity depends on several factors and human attitudes. We could say that a very determinant factor is the avoidance of the routine and its addiction and, consequently, the application of a vivid and participating policy on human relations.

As far as the latter is concerned, they do not develop and produce when they are imposed by abstract notions, but when they derive from direct and vivid contact between the company's leadership and the staff.