Companies are dying faster than ever before. Covid-19 as a Black Swan event is only accelerating it.
Between 2000 and 2015, 52% of the Fortune 500 were merged, acquired, went bankrupt, or fell off the list.
At the current rate, research predicts 50% of the S&P 500 will be replaced within the next 10 years. Maybe sooner.
Our curiosity led us to investigate why some companies die, and why others survive. We believe the answer boils down to how they define their business.
What business are you really in? Knowing the answer is no longer ‘nice to know,' it’s do or die.
Traditionally, companies have defined the business they are in by their flagship product (e.g. a soft drink company), their enabling technology (e.g. a motor vehicle company), their competitive category (e.g. a telecommunications company), or their business or distribution model (e.g. a luxury goods retailer).
Traditional definitions of a business limit an organization’s ability to predict or adapt to external change. These definitions are often tied to static views of industries, business models, culture, and technologies. They can also contribute to a failure of vision, as they don’t provide a clear north star for action.
Nokia was at its heart a mobile hardware company. Profoundly underestimated the importance of mobile software, including the apps that run on smartphones, to the experience of using a phone.
Future-proof companies have a different way of defining the business they are in. They define themselves based on a lasting benefit they bring to the world. A benefit that often transcends technology, business models, and even core product offerings. And they bring it to life through concrete actions.
Take Domino’s. It isn't just a pizza company. But a technology company that delivers pizza. This redefinition helped Domino's re-focus on customer needs, be an early adopter of technology and realign internal operations to fulfill its 30 minute delivery guarantee. Today, Domino's controls 70% of India’s pizza market by value-- holding its own against delivery aggregators like Swiggy and Zomato.
At Studio Jigsaw, we believe the key to surviving - and thriving - is for companies to define, or redefine, precisely what business they’re in, beyond the products and services they offer - and organise around it.
The rate of change in the business world is increasing. Cycles of innovation are getting shorter. Consumers are quicker to evolve their needs — and quicker to abandon a brand. Competitive landscapes are changing faster: every year new companies enter the market providing appealing alternatives to the business models, customer experiences, and brand purposes of legacy companies.
Organizations need to determine a clear and generous purpose and reinvent their businesses around this lasting benefit they bring to the world. We know this unique approach drives innovation, focus, and relevance.
Do or Die is our modern survival-skills platform for leadership teams seeking to drive growth and ensure longevity in this unprecedented time of disruption.
Get in touch to learn more.
