Why are there so few businesses that live to be 100+ years old? Is longevity due to leadership, good business practices, or just luck?
In every industry, there are graveyards full of once-good companies with good ideas and good workforces that did not survive. In the auto industry there is Packard, Oldsmobile, DeLorean—all good companies, all dead and buried. Yet, Ford, Chevrolet, and Chrysler have survived to see their centennial celebrations. Huge retailers such as Woolworths, Ben Franklin, Coast-to-Coast, and Kresge’s are forgotten names. Others like J.C. Penny and Sears might not be far behind.
Interestingly, the oldest company in America is not a giant company. It is Tuttle’s Red Barn, a farming operation in Dover, New Hampshire, which is located between the tidal waters of the Bellamy and Piscataqua rivers on Dover Point. Tuttle’s has been operating continuously for 381 years. The oldest nonfarm business in America would be The Seaside Inn (formerly the Seaside Inn & Cottages), a small inn in Kennebunkport, Maine, which has been in continuous operation under the same family since 1667, making the inn the grand old age of 346. Not surprisingly perhaps, the oldest industrial/retail company in North America is Hudson’s Bay Company (Canada, 1670), and in the US it would be Towle’s Silversmith (New Hampshire, 1690).
There are also many examples of big companies and organizations that have survived to become centenarians. One such notable is IBM. A hundred years ago the company made punch cards, scales, and clocks. Today, its supercomputers can beat human chess champions or solve mind-bending business problems. Its valued at $100-195 billion, just under Microsoft at $200 billion and well ahead of Google at $165 billion.
Some nonprofit companies have also succeeded in reaching the century mark. These companies are not based upon products but on mission and services to fellow man, animals, the arts, and culture. One example is Goodwill Industries, founded in 1902 in Boston by a Methodist minister, Edgar Helms, who wanted to help the impoverished of South Boston and the large number of immigrants that arrived on the shores of America hampered by disability, language, or skills. Today, the mission continues and there are over 200 Goodwill agencies throughout North America and in many other nations around the world.
How is it that some companies and organizations survive to become 100 or older and most just fade away and are buried in business graveyards? Our research cites five pretty commonsense practices:
Leadership is vital, and succession planning and leadership development is vital if a company wishes to get to be 100. Old companies scored significantly higher in every aspect of developing future leaders and succession planning. The continuation of mission and service, it is believed, is all about successful succession in leadership.
Centenarian companies have a solid and ongoing focus on their relationship network. Old companies put much more emphasis on their relationships with suppliers, customers, and local communities. Successful older companies realize that they have an obligation to support their community as well as their stakeholders and customers. They grow old because they know how to give of their resources.
Centenarian companies are open to change, but at the right pace. As might be expected, old companies focus much more on tradition and improving what they see as their core strengths. However, they are ever mindful that change is inevitable, and welcome their own evolution. Significantly, however, when large-scale change is necessary, they admit to taking a long time to plan and implement such change. In other words, they practice careful innovation.
Business old agers specialize in conservative financial practices. Successful old companies are solid planners that pride themselves in having conservative fiscal practices. These companies seek profitability over sales volume and are reluctant to borrow money, opting instead to grow conservatively with cash in hand.
Purpose and Values
Long lasting companies have a strong sense of purpose and values. They weigh decisions based upon those values and build leadership that can align themselves to the values and ethics that the company was founded upon. They have the ability to move into new businesses without abandoning core tenets, and quickly align the new business ventures with the established core principles.
Leadership is more than a good idea, hard work, and some luck. The ability to thrive and survive depends upon building strong leadership throughout your company, from the ground floor to top floor and from young to old. Care to see these principles in action? Plan a visit to Tuttle’s Red Barn in New Hampshire sometime soon and see why this company is pushing 400 years old.
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