The genius of the 'and'
Zero sum thinking and the shortened average lifespan of S&P 500 Index companies
|Sep 11, 2019|
In the days following the birth of my newsletter, a series of chats with friends and tech folk made me realise there's a misconception about social enterprise and profit (did your eyes just gloss over?). Unglaze them and let's dive in.
The Task(s) at Hand: 1.There's a common belief profit is a zero sum game (hi tyranny of the 'or'). 2. The average lifespan of companies has decreased from 33 years in 1964 to roughly 24 years in 2016 and steadily declining. What's happening?
The Solution Proposed: Three words: Built. To. Last. In the management classic by Jim Collins, he shares why only some businesses manage to stand the test of time. Apart from having a cult-like culture and homegrown management, a key success factor is how well a company preserves its core values (a philosophy beyond making money) and stimulates progress (strategies, goals, etc.).
Example? Sam Walton encouraged employees to experiment aggressively with Walmart's stores but only if they were first and foremost serving the customer.
This is the genius of the 'AND' and it's lacking in many companies of today that are so easily swayed by external factors. There's no denying progress is being made but they've forgot to establish a core (platform and responsibility).
"...continuity and change, conservatism and progressiveness, stability and revolution, predictability and chaos, heritage and renewal, fundamentals and craziness. And, and, and. A visionary company doesn’t simply balance between preserving a tightly held core ideology and stimulating vigorous change and movement; it does both to the extreme.” -- Jim Collins
What's your company's 'and'?