The Living Company by Arie de Geus
The Living Company by Arie de Geus
More armchair hypothecations... Shell did not publicly publish their study of Fortune 500 mortality and survivorship. De Geus claims that adaptability saves companies from the slaughter, however many firms fail to adapt. To show that, I would expect some metric of adaptation, perhaps a breakdown of where revenue originated, tracking that over time should reflect adaptation.
It could be that some long-lived firms just make a particular wine or cheese and people's consumption patterns wrt their product haven't changed in 500 years. Also, what portion of Fortune 500 still exist however do not have current Fortune 500 scale? Only a select group of companies will have revenues that scale with the components of macroeconomic growth (labor, capital, technology).
He (Arie) introduced me to the famous study done at Royal Dutch/Shell, where he was the coordinator of planning worldwide, which found that the average life expectancy of Fortune 500 firms, frrom bith to death, was only 40 to 50 years. The study also found many companies over 200 year old. Arie convinced me that most corporations die prematurely -- the vast majority before their fiftieth birthday. The majority of large corporations, he said, suffer from learning disabilities. The are somehow unable to adapt and evolve as the world around them changes. big jump from mortality to pathology... any autopsies done?
Why do companies fail?
Theory 1: Managers are stupid.
Theory 2: We can see only when a crisis opens our eyes.
Theory 3: We can see only what we have already experienced.
Theory 4: We cannot see what is emotionally difficult to see.
Theory 5: We can see only what is relevant to our view of the future.
A company like Royal Dutch/Shell, in short, has its own ladder (don't ask) of personae, looking something like this:
Society
Corporation
Company
Division
Work Group
Team
Individual
... each unit is conscious of itself pathology sounds increasingly worth exploring