It’s true. The Boston Consulting Group recently published a study which analyzed 35,000 companies, publicly listed in the US from 1950 to now, and what they found was that the total life span of companies and the length of time that their shares are publicly traded have plummeted significantly. The average age of a company today is 30 years, and according to the study this average life span is nearly half of the average life of a company 30 years ago.
The report also notes that companies “…are also more likely to perish at any point in time… Today, almost one-tenth of all public companies fail each year, a fourfold increase since 1965. The five-year exit risk for public companies traded in the US now stands at 32 percent, compared with the 5 percent risk they would have faced 50 years ago.”
Our world is evolving quicker than ever before. Often times, when companies find their niche, their competitive advantage or their “golden goose”, the success leads them to develop patterns of work which are comfortable. Too often we rely on comfort and depend on what is currently working or what worked in the past. The “if it’s not broke, don’t fix it”, way of life might have been an obvious resolution in the past, but because of the fast pace of the business world today, if you don’t refresh and revolutionize even the things that are working today, somebody else, somewhere else is already thinking of a way to make it better, and if you don’t act on it, they will.
When change occurs, we as humans are wired to react negatively. This is due to our innate response to view change as a stressor and a threat which has helped us survive throughout our evolution as a species While that has been good for our survival it does have consequences. When companies are trying to innovate and make positive changes most people often resist and that slows the whole process down to a crawl. According to this Forbes article, a study by Towers Watson has found that only 25% of change management initiatives are successful.
The good news is that it doesn’t have to be this way. Once people become aware of their natural tendency, they can combat it by controlling their mindsets and developing resiliency. Organizations that invest in training their people to have a more adaptive mindset are building a culture that allows their people to not only respond more favorably to change, but also to create positive change.
According to TRACOM’s Vice President, David Collins, “Enhancing your workforce’s mindset to be agile, and adaptive is the key to operating a successful business today. When we have achieved our goals and objectives we like to sit back and ride that wave for as long as we can to reap our just rewards. Unfortunately with the pace of business today, companies no longer can afford such a luxury.”
Learn more about TRACOM’s Resilience training here.