52% of the 500 largest companies in the USA (included in the S&P 500 index) disappeared from 1955 to 2016. That might be surprising, but what’s really interesting (and worrying for our corporate giants) is that they’re disappearing faster than ever before.
In 1965, the average S&P 500 company lifespan was 33 years. But by 1990 this was down to 20 years… and by 2026 it’s expected to drop to just 14 years. The biggies appear to be a dying breed. But why? Let me share some reflections and tips on how to avoid becoming one of them.
Dying businesses are not thinking fast
Our world is accelerating. Markets, trends, customer behaviours and needs constantly evolve, meaning we have to too. In addition, we face challenges of huge complexity and scale, with the climate, energy costs, uncertain macroeconomic outlooks and the war on our continent to mention a few. In a polarised world it is even more important to understand the nuances of truth, in order to conduct informed choices and in order to understand who you are talking to.
Do we have the right sensors out there to understand and adapt to this changing environment? Do we know the challenges, opportunities and tasks facing our existing and potential customers? Can we give them what they really need?
… they are not minding the gap
Innovation is key. We need to speed up developments to stay relevant. That’s true of the way we work, what we offer to customers, the way we use data and more – innovation is the key to unlocking future success.
Although large corporations are innovating, there’s a gap between their developments and the needs in the “real world.” This is the sum of the product-market-fit-gaps. And to fill it we should focus on diversity, inclusion and belonging.
Why? Well, let’s boil it down to three dimensions where innovation and diversity intersect: adaptability, desirability and flexibility.
… neither are they focused on Adaptability
Our sensors must be capable of understanding the changing needs of our existing and new customers.
So, how do we pick up as many relevant changes as possible? By widening the range of diversity in our teams as much as possible. Our sensors must be capable of understanding the changing needs of our existing and new customers. With a wide range of perspectives in the room, we have a wider range of sensors out there in society.
Still, sometimes we hire people that might look different, but that are more or less the same as us (read: you don’t have the sensors). Or we do recruit diversely, but we don’t create that safe environment where everyone dares to be themselves (read: you haven’t turned on your sensors).
Tip: Start mapping what you have in your team today with regards to diversity. Then ensure you fully utilise those perspectives you already have access to and start identifying what kind of perspectives could be widened in the room.
… nor are they seeking Desirability
We want to truly understand what the customer needs. However, we often build our user insight and research based on our perceptions, world-views and biases – aiming to confirm our own beliefs. It is an outside-in perspective when it comes to understanding some segments.
Tip: First of all, we need to be aware of our biases when we do the research, then we need to ensure we don’t ask leading questions (but rather open questions). Finally, we should involve people within the different segments in the project work in order to understand the context.
… and definitely not focusing on Flexibility
We love structure and routines. We love to hang out with the same people. We call the same people when we develop a strategy, or things are challenging. We more or less do the same things every day. This hampers innovation.
Challenge: Surprise yourself every day! Meet new kinds of people, call a new colleague to test your idea, speak to someone you have never spoken to in the office, explore new areas at work, ask people new questions. Expand your inner circle.
Result: Meeting the unknown will make you more flexible in terms of meeting new trends. Furthermore, this flexibility will make you stronger in terms of understanding needs other than your own (or the usual people you hang out with).
In these times, we simply can’t risk being less adaptable to change; we need to understand the real desires of our customers and we need to make ourselves flexible to meet the unknown every day.
So, get all kinds of different sensors, place them everywhere, and make sure they are turned on. Life expectancy may be falling for some companies, but by being open to new influences and perspectives we can stay healthy and prosper! At least you have some sort of insurance – to stay relevant and not be part of that 52% that didn’t make it.