"Remember, the unmoored boat floats about."
Who typically lives longer?
A business or individual? 1
The average lifespan of a U.S. S&P 500 company has fallen by 80% in the last 80 years (from 67 to 15 years), and 76% of UK FTSE 100 companies have disappeared in the previous 30 years.
According to the U.S. Bureau of Labor Statistics, two out of every three businesses with employees will last two years. About half will last five years.
Smaller businesses dominate the commerce landscape. But, according to the BLS, nearly 20% of those businesses fail within the first year of opening. Then, after five years, half of those size companies go out of business--and only about 30% make it to year 10, as reported in Forbes Magazine.
Most giant corporations have a lot of inefficiencies. The English economist, E. F. Schumacher, pointed toward this factor in his book, "Small is Beautiful." That may contribute to their disappearance as they are bought out, merged, or bankrupt.
McKinsey & Company estimates that by 2027 75% of the companies currently quoted on the S&P will be gone.
Yet there's hope.
Organizations, big and small, can be around for decades. Some reach the 100-year mark, such as Coca-Cola, UPS, L.L. Bean, and Kellogg's. Or smaller enterprises such as Seaside Inn, Casewell-Massey, or Pensacola Hardware, which began in 1851.
In addition to having the right people, products, or services and favorable market conditions, researchers have identified two "incongruous" practices carried out simultaneously for a long life:
First, have and preserve a stable core, an unchanging organizational purpose.
The second step is to have a disruptive edge, which involves bringing in outside expertise and learning from other sectors (even the ones that have nothing to do with yours).
Along with other vital factors, including luck, those who achieve longevity appear to balance the radical and traditional to stay on top of their respective fields. 2
What's in the core?
Much has been written about Chick-fil-A, the 55-year-old family-owned business with 2,700 restaurants across 47 states, Washington DC, Puerto Rico, and Canada. Franchise Times reported systemwide sales totaled $16.7 billion in 2021.