Becoming a unicorn (company valuation above 1 billion USD) as soon as possible is the greatest achievement for an start up. And indeed it is. However, there is another rare phenomenon that deserves celebration as well and it is not named after any mythological animal: being a centennial company. Behind centennial companies, there is a story of resilience and change embracement. They have reinvented themselves many times to stay relevant.
If I ask you to name one innovative company, possibly some of the names that come to your mind are Amazon (1994), Google (1998), Apple (1976) or Tesla (2004). No doubt those are innovative companies. They are typically shortlisted as part of the most innovative companies in the world and although they are not newcomers, they are not that old. Corporate lifespan has declined dramatically in the last decades. Taking as a reference S&P 500 list, the average company lifespan in the 70s was above 30 years. According to Innosight, it is forecasted to shrink to 15-20 years this decade. Markets and technologies move so fast now, that although it is really difficult to get to the top, it is hard as well to stay there for more than 20 years and very rare, as unicorns are, to turn 100.
Are centennial companies innovative? Definitely, there is something they have done right to be still on the track after a century. One of the ingredients of this immortality recipe is innovation. Let’s talk about these companies, survivors by nature.
Successful Centennial companies
Kodak (1892). Kodak business model was based on the film and the photo processing. They held a monopoly position for a century, due to a great invention that democratised photography: the roll film. However, the digital camera technology was the beginning of the end of Kodak. Which is ironic, since Kodak invented a hand-held digital camera technology before anyone else but they decided to discard it. Kodak was afraid of cannibalising their core business. When they reacted it was too late, the digital camera business was already very competitive and they failed. Was this the end of Kodak? Not really, actually they are back. They have reinvented themselves for the drug ingredients industry.
Bosh (1886). Bosh was founded as “Workshop for Precision Mechanics and Electrical Engineering”. Their takeoff came with an improved magneto ignition device and their international expansion that positioned Bosh as the most relevant player in the automotive industry. Later, they jumped into the diesel engines because they realised this trend was jeopardizing the company’s existence. Many other innovations came afterwards, such as hand-held tools for use in manufacturing and the ABS, just to mention some of them. Nowadays, Bosh innovation moves forward very efficiently through the accelerator programme, where new ideas are explored, either disruptions or ideas coming from existing business.
Proctel and Gambel (1837). P&G was founded as a joint venture of a candle maker and a soap maker. They invest strongly on innovation and they do it efficiently. A truly customer centric company, paying serious attention to customer research. They have also complemented the internal innovation efforts with open innovation from 3rd parties.
All these are success stories based on innovations, smart and creative ways to anticipate and adapt a company to the changes. However, innovation is a challenge itself, this is true for any kind of company but for centennial corporations, there are two aspects that make a difference: the legacy and the size.
Pros and cons of legacy and size in centennial companies
The legacy is the business you have already in place, the technologies you use, the investment you have done, your company culture, your historical success and your failures. A new company starts from ground up and this is challenging as well, but it gives you a lot of freedom too. On the contrary, legacy in centennial companies is huge and increases the complexity of any change. Although legacy may be felt as a heavy burden, it can be a source of valuable learnings and assets as well. Legacy is a strength if centennials manage to leverage it to contribute to the company’s growth, and not to limit it.
Size does matter too. A corporation is big and complex, and if it is a centennial corporation the inertia may be massive. As legacy is, size can be a strength, if you find the right levers and keep focus, a centennial company can be unstoppable. Their size in terms of resources, partners and knowledge can accelerate exponentially any initiative.
The secret of immortality of centennial corporations
Not a single recipe fits all, but there are some common ingredients among succesful centennials:
- Master the now & look for what next, centennials exploit their current business, find ways to make it more profitable but look for new paths as well. A perfect combination between what they are and what they want be in the future.
- Embrace the change and be humble. Centennials know change cannot be avoided, it is an inherent part of their business. So instead of fighting against the change, they learn how to anticipate and discover the opportunity behind. Centennials are humble as well to recognise that at some point their kingdom may be over and they are alert even after decades of oligopoly. Otherwise, they know there is a risk to not foreseeing the change coming and it may be too late.
- On board people. Trying to enforce an innovative culture without the complicity of your people is doomed to failure. Employees at all levels should understand and buy in the vision, feel they are part of it and key contributors.
- Cooperate with others to incorporate innovations that happen outside the corporation. Centennials choose the right partners, all sizes, from start-ups to other corporations or academia. Doesn´t matter how big you are, you cannot innovate efficiently alone.
Centennials are business living history, they can be a great reference to learn. After all, experience counts and if entrepreneurs are valuated by the learnings from their failures, imagine how many failures a centennial have faced and overcome to resist.
