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A disturbing long-term trend may be observed around the world: corporations are struggling to survive. Analysis according to Politician shows that corporations have been losing their lasting strength since 1965. An evaluation of corporations included in the Standard & Poor’s 500 index in 2020 found that the average lifetime of a company was 21 years, a stark contrast to the situation 55 years ago when it was that’s an average of 32 years. The statistics platform then said the number was likely to proceed to decline in the 2020s.
Some EY report in 2023 shows that, in fact, the average lifespan of an American S&P 500 company was once 67 years and is now just 15 years. The report shows that even some of the best-prepared corporations have no guarantee of survival, which is worrying. These numbers made me wonder how you may build a business that will last much longer than a hundred years.
Part of a century-old company that was passed down to me as a fourth-generation heir in 1993, Kowloon Motor Bus Company (KMB), founded by my grandfather in 1921, will officially have fun its 104th birthday in 2025. In the current climate, and having survived the Japanese occupation during World War II, the global financial crisis, and most recently the 2020 pandemic that shook the world, I’m proud that we have reached such a milestone. Based on my personal experience and further research, I have identified key characteristics that will help corporations survive for a hundred years and beyond.
1. “Adapt or die”
Charles Darwin’s famous words, recorded in Origin of species in 1859, are true even here in the business world. Staying relevant in an ever-changing world requires corporations to adapt to customer needs and market demands through deep evaluation, teamwork and rational considering. I find the example of LEGO staying relevant quite inspiring and many would agree that this is a company that will reach its centenary status in lower than a decade.
Founded by a Danish carpenter in 1932, LEGO began its building blocks with wood and then plastic, making it a brand synonymous with kid’s toys. However, LEGO almost faced bankruptcy due to over-innovation at the turn of the millennium, as technological advances created countless other flashy competitors. It was then that the iconic company analyzed its own mistakes. Instead of making recent ideas, he began to adapt. He modified existing prototypes, but with recent collaborations with movies akin to Harry Potter and Star Wars.
Eventually, he entered the film industry with them. The adaptability of LEGO jogs my memory of how KMB has dealt with crises in the past. Just a few years after its founding, World War II broke out, rendering most of the fleet useless. As a part of the purchase of alternative buses, existing routes were supplemented with trucks that served as temporary buses. For over ten years, KMB has consistently applied this principle of adaptation to evolve with the times.
2. Balance innovation with stability
In business, innovation often means taking risks, and sometimes it requires venturing into the unknown. Without innovation, you lose your competitive advantage in the market. However, too much innovation risks spreading too widely and potentially losing out to competition. So how can innovation change into a part of the 100-year plan? The art is to balance progressive ideas with the smooth running of the business.
When considering progressive measures, a thorough, data-driven risk evaluation ought to be applied. The company culture ought to be based on innovation, but on a continuous basis, so that good ideas are continuously delivered and used wherever possible. A great company leadership strategy also needs to include a collaborative approach to approaching progressive ideas. You should work internally with your team, in addition to leverage external resources and customer insights, to ensure continuous, consistent improvement. And consciously – never innovate for the sake of innovation.
3. Be socially responsible
Business is about people – whether or not they are your team members, customers, or the broader community with which the company interacts. Having clear social goals inside a company is its raison d’être, clearly signaling that the organization is there to survive long-term and serve the people around it, not only its shareholders.
It makes sense for a company to take on social responsibility as well, so that customers will be willing to pay a premium for the goods and services of a company that is perceived as doing good for society. This point aside, clients also look for corporations that are accredited for social responsibility.
AND questionnaire conducted by Sezzle shows that among respondents, greater than half of whom are millennials, 81% said it is vital to them to buy from brands that align with their social values. Not all B-Corp corporations are recent either – Gibsons Games is a 104-year-old puzzle company that has survived and thrived since its inception, leveraging its commitment to serving families around the world since its inception.
It jogs my memory of the ethos of my very own company. From the very starting, KMB stood out because it remained a private company offering public transport without any state subsidies. Personally, I’m proud to say that we’re helping 2.8 million people get around Hong Kong, while continuing to make commuting reasonably priced, accessible and accessible to all. As a part of our commitment to society, I also helped found it Friends of KMBHong Kong’s first volunteer group organized by a public transport company to encourage civic engagement.
But in fact, social responsibility is an innate characteristic that ought to be built into the company from the very starting and should have a far-reaching, sincere and long-term impact.