1,400 years and counting
Can the world’s oldest companies survive much longer?
Ford Motor Company, General Electric, Chevron and Boeing are household names – and with good reason. In 1988, these companies were part of the Fortune 500 list, and they are still there today. They were there then people were born, so it’s no surprise they are here today.
But in 2017, only 25% of the top 30 companies were still there. Most of those were dominated by oil/petroleum, gas and car makers, which as the headlines will tell us, are organisations that are due for a huge shakeup over the next decade as people demand access, not ownership when it comes to cars, and our sources of fossil fuels run low.
Today, a huge percentage of the worlds largest organisations are, in relative terms, new – only emerging in the last few years. Apple, Amazon, Google and Facebook were created in our most recent memory. So what exactly does it take to survive in business over the long term? Could Google last 1,000 years?
With climate pressure, new ways of working, the emergence of AI, it would be fair to think that organisations today face grave challenges if they wish to thrive into the future. Most will need to move to entirely new industries, re-invent markets, and even cannibalise their own businesses that made them who they are today.
But can a business really transcend time?
Kongō Gumi is one such business. It’s a construction company based in Osaka, Japan, and has been building temples and buildings for some time. It was the company tasked with building the 16th-century Osaka castle, and has been a family run business for over 40 generations, dating back to 578 AD, making it 1,441 years old.
It was the longest, continuously operated business in the world – until 2006, when it sadly went into administration and became just another construction company that couldn’t make ends meet.
In 2008, the Bank of Korea looked at 41 countries around the world, to try and find businesses that had been operating continuously for more than 200 years.
Of all these companies, nearly 71% of them are from Japan. A survey in Japan found that there are currently over 21,000 organisations that have been in continuous operation for more than 100 years. There is something about Japan that makes organisations live through the ages.
Of all the companies older than 200 years in the survey, 3,146 are from Japan. 837 from Germany, 222 in the Netherlands and 196 in France. It is easy to guess why this might be the case. These cultures probably kept good records, and their cultures have stayed mostly intact for a long time. It would also be worth guessing that the survey data simply didn’t include companies in China, The middle east and Africa, for which many organisations have no doubt existed for just as long.
Of the oldest companies, dating back over a thousand years, Hotels and Pubs make a big appearance. France’s Chateau de Goulaine has been producing wine since 1000 AD, and Beer has been made in brewery’s in Germany for roughly the same time. Confectionery companies have done well, mostly in japan, but the longest trends in all of them come down to two things.
What to put in our mouths, and where to stay.
Given the introduction of Airbnb, trying to disrupt the hotel market, and the idea that Amazon wants to deliver all our groceries to our door the same day we order them, what does the future hold for organisations that wish to build lasting businesses that go beyond the next few years.
An obvious reason these businesses will live on is the fact they already have. A restaurant that has been around for over a millennium is no doubt an experience that goes beyond how good their braised lamb shanks are. We see value in history, so those businesses will surely be fine. We visit the pyramids not because we like stone, but because of their story.
But what is the secret sauce that makes these businesses keep going? Is it possible for a technology company to go the distance?
A uniformly common trait in most of them is this – family. Most of these companies were family enterprises, passed down, perhaps begrudgingly, to the sons and daughters to carry on the story into the future. A big part of this longevity must come down to expectations, and how family ties and bonds have been strongly focused on obedience to our parents throughout the ages. I hate to imagine the stress on the family members running Kongō Gumi, when it went into administration after nearly 1,400 years. The sadness in that moment must have been incredible.
So why do family owned enterprises do so well?
Huge Whittaker, from Oxfords Nissan institute of Japanese studies says that of all the businesses in Japan that thrived, they aimed to balance two conflicting forces. “Continuation, and innovation.”
“Family-owned enterprises are always going to have a lot more persistence,” Weinstein says. “They continue in the same sense that the name continues.”
To last the distance, these family enterprises know that you want someone with a vested interest in the longevity of the companies name, a child of yours perhaps, but you also need new ideas. This is why these companies have tried to attract talent and keep evolving, while remaining true to their values and sense of generational custodianship.
Japans oldest companies have long been family owned. Sumitomo and Mitsui, both centuries-old, family run businesses, merged to became Japan’s second largest bank, SMBC. Even Nintendo, which began its story making playing cards in the 1800’s became the tech giant it is today, while still being run, at least to a degree, by family members.
The big question then, is how can we create the kinds of organisations today, that carry that same sense of perseverance that a family run business might impart, and absorb some of that persistence without having to be a family run dynasty?
Grit, a trait Professor Angela Duckworth, winner of the MacArthur Fellows “Genius” Program Grant, outlines in her book, Grit, the sheer importance of gritty people, and how they play a role in success.
When staff members simply do not buy into the long game, it’s easy to work on activities knowing that one day, you’ll be gone, and the fallout won’t be your problem. But when your family name is on the building, you tend to think more long term. Perhaps this is why we see infrastructure and city planning projects in places like the middle east, have much grander ambitions, and longer views of the world than we do in democratic countries.
A prince in Saudi Arabia has the chronological stability to make plans for a city that will be run by his grandchildren. Whereas a senator in congress hardly knows if he’ll be around by the time the next iPhone comes out. Most of us are in situations like the senator. We think our world will change with such regularity that it’s unwise to plan too far out. But we know a few things for sure. Our children will want to eat good food, and they will certainly need places to stay. Some things simply do not change all that much.
It’s inspiring to see that some of the worlds oldest, and biggest organisations, have persevered through the ages, and passed custodianship from family members to ensure there is someone there to sail the business into the future. It makes a good case for succession planning, and perhaps sets the bar just that little bit higher for us all.
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