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    You are here Home » strategy

    The Best Run Companies are the Sustainable Companies

    Last updated on Nov 27, 2019 by Dan McCarthy · This post may contain affiliate links

    Guest post
    from Sam Hua and Nan Hua:
    Business
    people talk all the time about wanting to build ‘hundred-year companies’. But a 
     
    hundred years of what? A hundred years of growth? A hundred years of
    development? Or a hundred years of survival?
    The
    key should be survival, so the company will be alive and kicking in a hundred
    years, passed on across generations. This is the ultimate achievement in
    business. As for a hundred years of growth – well, no company has yet managed
    to do that.
    Most
    public companies see their strategy as being entirely dictated by growth.
    Balance sheets, income statements and cash flow statements are

    cranked out
    every year. And so, we’ve gotten to the point where public companies can’t even
    look beyond the current year in their ‘strategic vision’.

    Now
    let’s talk about development.
    What
    is development? Growth means more money; development means more capabilities.
    Development is the process of gaining the capability to survive in the future.
    When
    a company’s revenues reach a peak, it could very well be the eve of its
    destruction. Why? Because this year’s success is the result of inertia from the
    past. If you don’t develop the ability to continue to survive next year, you
    might be gone by then. If you have piles of cash on hand but your company faces
    the risk of failure, that shows you don’t have a scientific outlook on
    development – all you’re focusing on is growth. This was Nokia’s problem.
    Many business people, the most
    successful ones, often say that their companies are 6-18 months away from
    failure. These people are said to be ‘always focusing on the next crisis’.
    Sometimes they’re accused of faking it to keep their employees in line. But
    it’s really none of these things. They are not guarding against sudden crises,
    they just have a clear understanding of how companies survive and develop –
    everything a company has today is the result of good decisions yesterday. But
    if good decisions aren’t being made today, then the company won’t survive
    tomorrow. It’s a cause and effect dynamic.
    What’s
    an even higher achievement than development? Survival. When we talk about
    building a 100-year company, we don’t mean the company is going to grow for 100
    years, we mean the company will still be around in 100 years. The ultimate
    achievement in business is sustainable operation – the company always survives
    and never disappears. How do you do this? By always having new cards in hand.
    If you never want to be left behind by society, you need to be always useful to
    it so that it keeps you around. You have to always think about your killer
    products, authoritative expertise and dreams come true for the next year, next
    five years, next decade. This is the foundation of our strategy.
    Sam Hua and
    Nan Hua
    are  founding partners of
    Shanghai H&H Marketing Consulting

    Company and the authors of SUPER
    SIGNS: Taking Your Brand To The Ultimate Level
    .

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