5 essential factors to the 100 year family
Did you know that the average lifecycle of corporations is 12-15 years, whereas in the 1920s, the average lifecycle was 67 years? What accounts for the difference?
Victoria TenHaken, Professor of Management at Hope College, writes in Crain’s Detroit Business that part of the reason may be the objective of the entrepreneur. They may set out on a journey to exit whereas others may set out to build an ongoing culture. TenHaken notes that in the short history of the United States there are more than 700 companies with 100 year histories. She notes, along with her colleague Makoto Kanda of Meiji Gakuin University, five essential factors for success:
- A strong corporate mission and culture. Companies that last 100 years have strong cultures and work to preserve those cultures. That creed is meticulously passed down in writing or in retelling the story again and again.
- Change management. Long term survival comes from continuous efforts to evolve and adapt to the changing landscape while remaining steadfast to core values. It the balance between tradition and change.
- Deep relationship with partners. They keep their stakeholders at the forefront. One-hundred year “companies develop close-knit, mutually supportive relationships that enable the type of trust and learning necessary to navigate the changes and challenges faced by a company over the years.”
- Employees Feel Like Family. Long term employees build on innovation while building on the corporate memory. As TenHaken notes, employees who stay with the company a long time feel trusted and supported.
- Active in the Community. Successful companies contribute into the communities in which they live. Those contributions yield a loyal workforce as well as a loyal customer base.
TenHake’s 5 essential factors can be applied to the 100 year family as well. The 100 year family:
- A strong vision and culture. The enduring family has a unique identity, a set of values, that govern the tribe. Those values and the underlying stories of the tribe get communicated from generation to generation.
- Adapt to the changing times. While families must adhere to a set of values, they must adapt their implementation of those values into a changing world. For instance, in today’s world a family must guard the intrusion of technology into the family space while realizing its benefits to enhance communication particularly for those geographically separated.
- They build community. Family is not an isolated affair. We need relationship and community with other families. Those relationships help remind us that we are sharpened in the company of others.
- Thriving individuals is the goal. A successful family realizes that its greatest assets are not the accomplishments of the families but instead the health and well-being of the individual. When we build into the individual lives of family members, we insure at the same time the health of the family.
- They live generously. The thriving and enduring family recognizes that it is not about them. They exist to be fruitful and productive members of society who give back with their time, their financial resources and their individual skills, gifts, talents and abilities.
So what do you think? Are you building a 100 year family?