In the 1920s the average lifespan of an S&P 500 member company was around 65 years. Today, according to Professor Richard Foster of Yale University, that average has fallen to just 15 years.
Over time, businesses come and go. Some run out of money, lose their customers, make bad choices or just become obsolete. There are a few who manage to celebrate centenaries – and some who even get along to 150 years – but that’s rare. Business is more often conceived and nurtured in a window of opportunity that is bound by fashion, economics, science, tradition, technology and the changing forces of demand and expectation in society.
Those that survive their first five years are usually fairly solid businesses. But it’s these very same businesses that may fail further down the line when they meet – not some canny competitor – but that frightening uncertainty called ‘change’.