I am not talking about me turning 25, as that happened many more years ago than I care to remember. Our company, The Daniel Group, started business 25 years ago this past September. We are having a celebration with our employees to mark the occasion.
Having our firm turn 25 caused me to consider two things. First, just how long-lived are companies? The statistics are sobering. Only about half of new businesses survive their first 5 years, and just a third survive 10 years or more, according to data from the US Bureau of Labor Statistics. So, getting lift-off is perilous. And staying alive isn’t easy either. A 2012 study by Richard Foster at Yale University found average tenure of a company on the S&P 500 index has dropped from 61 years in 1958 down to only 18 years in 2011.
The second thing it caused me to think about was what does it take to be a long-lived company? Arie de Geus, the author of the The Living Company, lists several things. I am going to borrow a few and add some of my own based on our experience:
- Being able to adapt to your environment is critical. Mr. de Geus makes note of this and I agree. We started out as a very small consulting firm (basically my wife and I). In the early 2000’s we began to focus more on customer service as our clients were talking as much about customer retention as they were about finding new clients. This led to the development of our ServiceConnect offering.
- Companies survive and grow because they are willing to learn and develop new skills. This is a trait that infuses the company and is not just a trait of the CEO.
- Having employees who are committed to the work of the business. They have an “outside-in” view of the business, and they constantly think about how their business’ actions with clients can have a more positive and sustaining impact on the client.
- Be certain to hire people who want to make a difference, have fun and, yes, make some money. All of these traits matter, and it is important to keep their order in mind. If it’s only about money then you create a mercenary organization. If it is only about making a difference or having fun, then the organization cannot sustain itself.
As I reflect back on our 25 years there have been ups and downs but far more of the former than the latter. Thanks to all our loyal clients and our great employees for helping us to get to 25. Now, on to 50!