Survival of the Fittest– Fortune 500 Companies Survival Rate is 12.2%: Core of Business Survival– Self-Attack…

Survival is the struggle to remain living, it’s self-preservation, its longevity… So is longevity really something to celebrate? Not according to Jim Collins; surely the point of being in business is to do something remarkable, not merely to survive? A lot of mediocre companies endure for many decades: What’s the point? Think about it…

If you compare the Fortune 500 firms in 1955 vs. 2014; 89% of the companies are gone and it’s probably all for the better, because of that dynamic called; ‘creative destruction’… In other words, only 12.2% of the Fortune 500 companies in 1955 were still on the list 59 years later in 2014, and almost 88% of companies from 1955 have gone– bankrupt, merged, or still exist but have fallen from top Fortune 500 companies (ranked by total revenues)

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That’s a lot of churning and creative destruction, and it’s probably safe to say that most of today’s Fortune 500 companies will be replaced by– new companies in new industries over the next 50 years, and for that you should be thankful. The constant turnover in the Fortune 500 is positive sign of the dynamism, innovation that characterizes a vibrant consumer-oriented market economy… and that dynamic turnover is speeding-up in today’s hyper-competitive global economy… According to Steven Denning; fifty years ago, the life expectancy of a firm in the Fortune 500 was around 75 years. Today, it’s less than 15 years and declining all the time… But; What separates the winners from the losers? The great from the failed? The successes from the also-rans?

According to Morten Hansen; it’s not luck, it’s not birthright, it’s not fast-paced technology  age, it’s not ‘innovation’, and it’s not– despite what everyone says– economic recessions…  But according to research; it’s leadership; it’s the winning leaders who follow a path of consistent pacing, i.e.; productive paranoia…

It’s being hyper-vigilant about the world and business environment around you, asking and probing question, such as; What are the threats? What are the opportunities? What are the disruptive competitive forces? According to Shellie Karabell; these are leaders with their sensors-up; they don’t know when, or in what form the bad times will come ,or in what shape, e.g.; it could be a collapse in demand, it could be regulatory change, it could be an industry recession, it could be a disruptive innovation… but, whatever the challenge they are prepared to self-attack…

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In the article Survival Of The Fittest by Jerry W. Thomas writes: What did Charles Darwin mean when he popularized the phrase– ‘survival of the fittest’? What he did not say is perhaps very revealing, e.g.: He did not say ‘survival of the toughest’, or ‘survival of the fastest’, or ‘survival of the biggest’, or ‘survival of the smartest’… No, he said ‘survival of the fittest’: What a strange word; ‘fittest’. One might tend to interpret Darwin’s ‘fittest’ as somehow related to physical fitness, or physical superiority, or ‘strength’… But, Darwin did not say ‘survival of the strongest’. He said ‘survival of the fittest’… So what does all of this mean for business; its strategy, its brand…?

Is survival of business akin in any way to survival of an animal, or plant, or bacterium…? Is it possible that success and survival in the wild might be analogous to success and survival in the business world? It means that the company and/or brand best ‘fitted’, or best ‘adapted’ to its environment (e.g.; its markets, its customers…) is most likely to survive, and most likely to flourish. It means that companies, or brands not well ‘fitted’ to their markets will not survive, long-term… making wise decisions based on factual reality and in-depth knowledge of– markets, customers… companies will thrive by being– ‘fittest’ of the ‘fit’…

In the article Survival Strategies: Innovate or Die by Pradip Sinha writes: Success is not a permanent achievement, it can be taken away by competitors at any time. Hence, it’s fundamental  imperative for companies to continuously innovate and evolve according to the ever-changing moods of markets, customers, technology… for survival and growth.  Typically, the bigger and more successful a business; the higher the hurdle to thrive, hence it’s incumbent upon the business to challenge status quo (self-attack), and continuously improve the way they do business. Today, business is nothing less than war; and victory is ephemeral. Sustaining a position in consumers’ mind is an on-going battle and victory can be snatched away with the blink of an eye…

The continuous battle for competitive leadership has forced companies to constantly innovate and stay relevant… These are companies with courage– to attack their own position in the marketplace… Continuous innovation and self-attack are at the core of competitive strategy for the 21st century companies… According to Jack Trout and Al Ries; best way to improve a company’s position is to constantly attack it… it’s all about changing the environment; it’s about breaking old rules and routine work pattern, and introducing new things with new standards. It means creating a sea change in the way consumers perform their day-to-day activities…

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In the article To Survive in Volatile World Businesses Must Build Resilience by Wayne Visser writes: In a changing world it’s not the fittest who survive; it’s the most adaptable… The world has this nasty habit of changing without permission, without notice… Hence, you might often find, suddenly, that you no longer are an agent of change but rather a victim of change… When change happens, you are left somewhere between mildly– confused, panicked, and battling for your very survival…

Hence, can you really afford to talk about long-term sustainability, when short-term survival is so hard to achieve? The sobering fact is that many companies face a future in which saving the world may have to wait, while they save themselves first… Hence, chances are that businesses must get down and dirty in the trenches to survive, and this is called ‘resilience’… According to Axel Lehmann; resilience is an absolutely key concept– the ability to bounce back from a set-back at least as strong as before, even stronger… it’s about adapting when everything around you is changing… Remember that preparing for change is not same thing as surviving it…

In the article Survival of the Fittest Companies by Harold L. Sirkin writes: It’s not often you think of companies or products as ‘species’, but perhaps you should. It might help to understand more clearly the reality of life-cycles… how some adapt and change while others go the way of the buggy-whip… In today’s global marketplace, the competitive advantage often belongs to companies with competitive advantage, e.g.; manufacturer with the lowest cost of production, the big-box retailer with the best supply chain, the company with the biggest nest egg, or the most nimble management… Hence, during tough times only the ‘fittest’– those with significant advantage– survive…

There are no safe havens any more, there are lessons learned that  business leaders must fundamentally embrace, e.g.; be flexible; be prepared to adapt, especially as you enter new environments; find what works for you in each market segment and go with it (but don’t expect it to work equally well everywhere)… Build on strengths and increase your ability to adapt, make your company more ‘fit’, better suited to new environments, and better positioned to win battle for survival of the ‘fittest’.  According to Willem P Burgers; business must be prepared to ‘attack’ and ‘destroy’ themselves before others do– self-attack means a constant innovation, examination…

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Companies must have the courage to attack themselves, repeatedly, and not be afraid of failure, since failure is the pillar of success, in the long run… But here is an interesting question: Is survival of a business akin, in any way, to survival of an animal, or plant, or bacterium? Is it possible that success and survival in the ‘wild’ might be analogous to success and survival in the business world?

Did Charles Darwin discover anything that might be relevant to business in the 21st Century? Although Darwin did not suggest it, but maybe you can think of nature and ecological systems as a vast ‘free market’ of perfect competition, where all living organisms are competing against each other for limited resources (i.e., sunlight, water, minerals…)?

Similarly, business and brands also compete with each other in a struggle for survival and collectively they tend to operate in ways analogous to the natural eco-systems…