Consistency Proves Successful Over Decades
We are always prone to think that the economy or outside external forces are the major cause of a company’s success or demise. But history has proven otherwise. Success or failure and the longevity of most companies are NOT primarily because of external forces but what a company has done to itself internally. That’s right — companies fall first and foremost because of what they do to themselves.
Case in point, two major retail companies – Ames and Wal-Mart – with the exact same business model experience the same economic effects of a declining economy – lower demand, sales and profit during the 2001 recession. Yet, one emerges stronger from adverse market conditions while the other becomes history and is out of business. Why?
Wal-Mart stayed the course of its strategy of slower organic, opportunistic growth. Ames deviated from its business strategy – sought mergers, and other “immediate shareholder boosts” to drive-up stock prices without realizing it was “creating” its own demise.
Companies that have prevailed in the last 100 years, or gone from good to great over the last several decades have one important thing in common: They have realized it depends more on what you do to yourself than what the world economy does to you. Bethlehem Steel once ranked as high as number eight on the Fortune 500 faced the same global competition as its rival American steel manufacturers. Today, Bethlehem Steel no longer exits while American manufacturers like US Steel survive. Throughout history, the greatest companies have used hard times to grow stronger and profitable.
It’s true that eventually all products, services, and niches can eventually become obsolete. But great companies have proven that they themselves do not have to as well. Great companies take responsibility for their own success or failure instead of attributing it to “boom and bust times.”
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