What’s that ticking noise…?

In 1958, the average lifespan of a business in the American S&P500 index was 61 years. Today, it’s 18 years. By 2028, it will be nearer 11.

In fact, according to a study by the Yale School of Management, it’s likely that around three-quarters of the companies in the S&P500 today will have disappeared from it altogether in ten years’ time.

No wonder CEOs are jumpy.

They know that, if they don’t keep reinventing their business, it won’t be one of the 25% that survives beyond the ten-year mark.

But they also know that, if they don’t hit their short-term targets, they probably won’t be around long enough to make the changes anyway.

With operating costs already cut to the bone, those targets are getting harder and harder to hit, which means there’s very little margin for error.

And that’s precisely where the problem comes.

When you’re looking for creative ways to reinvent your business, the surest path to failure is to play it safe. A little bit of incremental change here, an extra blade on your safety razor there. These are not the things that will save your business when a disruptive new competitor rips up the rule book and starts eating your lunch.

But, when your primary business focus is on delivering short-term results, you’re unlikely to have a culture where people embrace risk and failure.

It’s far more likely to be a culture where people stick rigidly to the processes and ideas that worked last time. A high-compliance culture, where contribution is measured only in numbers. And where nobody wants to admit that something hasn’t worked.

That’s not an environment where new ideas are likely to flourish. And, unless you can do something to change it, your business will inevitably suffocate and die – sooner rather than later, according to the Yale study.

So, what can you do? How do you take a workforce of people conditioned to be compliant process-followers and turn them into agile entrepreneurs?

Well, the bad news is that there’s no process for it. There’s no template to follow. No lever to pull.

The only way to do it is by changing the culture of your business. And the only way to do that is if you – and every other leader in the business – really wants to.

Everything else – launching a new purpose and values, polishing your employee value proposition, setting up a ‘creativity lab’ – is just a more or less interesting way of avoiding the issue.

You hear that ticking noise?

That’s time running out.

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