Company lifespans are dwindling, with the average lifespan of a Fortune 500 company dropping from 75 years in the 1960s to just 15 years today. The key to prolonging a company’s life lies in its ability to continually innovate and adapt. Companies must recognise the three stages of company life – birth, adolescence and adulthood – and the different challenges each stage presents.

The birth stage is characterised by risk-taking and innovation. In adolescence, the company must balance growth with establishing processes and systems. In adulthood, the company must avoid complacency and keep innovating.

Companies can fall into a ‘success trap’ in adulthood, becoming too comfortable with their current success and failing to innovate. Instead, they should adopt a ‘beginner’s mind’ approach, constantly questioning and seeking new ways of doing things.

Additionally, companies should foster a culture of learning and encourage employees to take risks and learn from their mistakes. This can be achieved by creating a safe environment for risk-taking and rewarding curiosity and exploration.

Finally, companies should be aware of the ‘bozo explosion’ – a phenomenon where mediocre employees are hired as the company grows, leading to a decline in overall quality. To avoid this, companies should invest in hiring and retaining top talent.

In summary, to prolong a company’s lifespan, it must continually innovate, foster a culture of learning, and invest in top talent.

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