Companies operate in an increasingly complex world: Business environments are more diverse, dynamic, and interconnected than ever—and far less predictable. Yet many firms still pursue classic approaches to strategy that were designed for more-stable times, emphasizing analysis and planning focused on maximizing short-term performance rather than long-term robustness. How are they faring?
To answer that question, we investigated the longevity of more than 30,000 public firms in the United States over a 50-year span. The results are stark: Businesses are disappearing faster than ever before. Public companies have a one in three chance of being delisted in the next five years, whether because of bankruptcy, liquidation, M&A, or other causes. That’s six times the delisting rate of companies 40 years ago. Although we may perceive corporations as enduring institutions, they now die, on average, at a younger age than their employees. And the rise in mortality applies regardless of size, age, or sector. Neither scale nor experience guards against an early demise.
We believe that companies are dying younger because they are failing to adapt to the growing complexity of their environment. Many misread the environment, select the wrong approach to strategy, or fail to support a viable approach with the right behaviors and capabilities.
How, then, can companies flourish and persist? Our research at the intersection of business strategy, biology, and complex systems focuses on what makes such systems—from tropical forests to stock markets to companies themselves—robust. Some business thinkers have argued that companies are like biological species and have tried to extract business lessons from biology, with uneven success. We stress that companies are identical to biological species in an important respect: Both are what’s known as complex adaptive systems. Therefore, the principles that confer robustness in these systems, whether natural or manmade, are directly applicable to business. To understand how, let’s look at what these systems are and how they function.
Stop breadboarding and soldering – start making immediately! Adafruit’s Circuit Playground is jam-packed with LEDs, sensors, buttons, alligator clip pads and more. Build projects with Circuit Playground in a few minutes with the drag-and-drop MakeCode programming site, learn computer science using the CS Discoveries class on code.org, jump into CircuitPython to learn Python and hardware together, or even use Arduino IDE. Circuit Playground Express is the newest and best Circuit Playground board, with support for MakeCode, CircuitPython, and Arduino. It has a powerful processor, 10 NeoPixels, mini speaker, InfraRed receive and transmit, two buttons, a switch, 14 alligator clip pads, and lots of sensors: capacitive touch, IR proximity, temperature, light, motion and sound. A whole wide world of electronics and coding is waiting for you, and it fits in the palm of your hand.
Have an amazing project to share? The Electronics Show and Tell with Google Hangouts On-Air is every Wednesday at 7:30pm ET! To join, head over to YouTube and check out the show’s live chat – we’ll post the link there.
Join us every Wednesday night at 8pm ET for Ask an Engineer!
Maker Business — Robotics manufacturer Anki shuts down
Wearables — Brace for fabric
Electronics — DRC Confusion
Biohacking — Senolytic Therapies
Python for Microcontrollers — CircuitPython 4 released, upcoming hardware, and more! #Python #Adafruit #CircuitPython #PythonHardware @circuitpython @micropython @ThePSF @Adafruit
No comments yet.
Sorry, the comment form is closed at this time.