This month Smart Business Pittsburgh features a performing arts organization that is 107 years old — the Mendelssohn Choir of Pittsburgh — and a contractor that just celebrated 60 years in business — W.G. Tomko Inc.
Business longevity itself may not be something to celebrate. The mission of the organization is not just survival after all; rather you want to accomplish something remarkable for your customers, your community and the world.
It’s still nice, though, to think that you’ve created something larger than yourself — an organization that lasts for generations and remains successful long after you’re gone. But like so many things, it’s easier said than done.
We’ve all heard the statistics. More than half of startups fold within five years, and about one-third survive 10 years or more, according to the U.S. Bureau of Labor Statistics. And the average lifespan of a company in the Standard & Poor’s 500 index is only 15 years, according to research by Richard Foster, a Yale School of Management lecturer.
Running a successful business isn’t easy — if it was, everyone would do it.
Tips from the master
I recently read a blog post by Walter Chen, CEO of iDoneThis, who shared three interesting lessons on business longevity from the oldest company in the world, Nishiyama Onsen Keiunkan. This Japanese hot spring hotel has operated for 1,300 years under 52 generations of successive ownership within the same family.
According to Chen, Nishiyama Onsen Keiunkan always puts its employees first, before growth or stockholders. It has found an industry with relative stability, while still being flexible enough to change with the times.
The hotel also, like many Japanese companies, focuses on serving the domestic market, which builds customer loyalty and takes advantage of the country’s system of intergenerational patronage.
“While it’s hard to quantify the quality of service in Japan,” Chen writes, “compare the Western saying, ‘the customer is king’ to its Japanese counterpart: ‘the customer is god.’”
Use the right measuring stick for success
These lessons seem to be reflected in a 2008 study by The Bank of Korea, which investigated 41 countries and found that 89.4 percent of the companies with more than 100 years of history employed fewer than 300 people.
That same report discovered that 56 percent of the companies in that world that are older than 200 years are Japanese.
This makes me wonder if we focus too much on building something big here in the U.S. Growth is so often how we look at business success, but I’m not sure if it is the right measuring stick for every instance.
I guess that business longevity and growth don’t always have to go hand in hand — you just need to decide which one is more important to you.
