Will your business still be around in 2020?

18 April 2009

In the 1980's we were impressed by the companies listed in In Search of Excellence, yet by the 1990's many of these were gone. By Stephen Manallack

Why do apparently good companies fail? If you think failure is not possible, consider that this was almost certainly also the belief of those who did. In the 1980's we were impressed by the companies listed in In Search of Excellence, yet by the 1990's many of these were gone.

How many companies make the Fortune 500 and vanish within a decade? Average corporate life expectancy in Europe and Japan is a frighteningly short 12.5 years.

Are you immune?
If you are a leader today, a core part of your role is to constantly monitor the health of your organisation, to ensure it does move from survival to long-term success. To be on the lookout for failure, you will need a new set of eyes.

Many thousands of words have been written about corporations in trouble, but few have addressed the core question: how do seemingly well-run companies get themselves into strife? The answer for institutionalised bad behaviour is almost always that there is no one person at the board level who acts as the corporate conscience.

Lest those of us in business start feeling superior, it has to be said that few chairpersons and few boards have the support of a ''conscience keeper'' or as I would prefer to put it, a ''reputation guard'' - a fearless and independent voice that understands that corporations live or die by their reputation.

Few senior executives and directors have the ability to compare organisational perceptions with real world views. Their biggest mistake is to believe their own propaganda.