In 1961, the life expectancy of a firm in the S&P 500 was around 61 years. Now it’s less than 18 years.
On top of this, only 12.2% of the Fortune 500 companies in 1955 were still on the list in 2014. Meaning that 88% of the companies have merged, gone bankrupt or have simply fallen off the list. What is the secret sauce that this small number of successful companies possess, and where do the others fall down?
Our world is constantly changing. Companies can only deal with a certain amount of change unless they build a climate that thrives on disorder. Doing so allows them to weather whatever storms and challenges they encounter. Those who don’t are left in the dust.