Only 13.4% of the companies listed in the inaugural
Fortune 500 rankings in 1955 still appear there today. Whether by bankruptcy, merger, or fall from
relevancy, 433 of the original Fortune 500 companies are now non-existent.
One of the relatively few companies that still remains
one of the 500 largest 57 years later is Boeing. During WWII, Boeing was the largest producer
of military bomber aircraft for the US armed forces. As soon as the war ended, this effort came to
a complete halt and 70,000 people lost their jobs. If the company decided to remain focused on
military aircraft it surely would have succumbed to the complacency that
destined the overwhelming majority of its competitors to irrelevance. But Boeing, at its core, was never just a
military aircraft company. It was a
company aligned with developing technologies that no one else ever deemed
practical or possible. As the war wrapped
up, Boeing began an ambitious period of growth, developing America’s first commercial
jet airline, the 707. It also continued
developing highly advanced military technologies such as short-range guided missiles
that were purchased in droves by the US government during the Cold War.
If AT&T remained true to being the “American
Telephone and Telegraph Company,” present-day conveniences like the World Wide
Web and mobile communication wouldn't be as common place. If 3M didn't ask its employees to innovate
around the office-place, the company would have went down the path of just
another mining company, and products like Scotch tape and masking tape wouldn't exist. If Corning remained fixated on
catalytic converters and diesel engine filters, the touch-screen glass that
protects our iPhones would not be as dynamic and useful as it is today. And above all else, if these three companies failed
to move on from the products that once defined them, they would not currently
be in existence.
Innovation lies at the heart of business. Those who do not improve constantly will be
passed by those who do. Whether the
company passing them is a well-established brand or a start-up looking to
showcase the power of creative destruction, innovation in a free-market society
will never cease to exist. For this very
reason, a company is much more than its portfolio of brands and product
lines. A company is destined by its
values and mission. Are we a bookstore,
or a company devoted to helping people access the specific information they
need in the quickest, most efficient, and most affordable manner possible? Borders would have led you to believe it was
the former. Amazon would have you
believe the latter. Any business that
defines itself by its product line, as opposed to its long-term purpose is a
business you don’t want your money put anywhere near.
It’s also essential to remember that short-term decisions
can have major long-run implications potentially strong enough to bankrupt your
company. During recessions or downturns
in the economy, for instance, some companies, rather than innovating and
reinventing themselves, will become excessively cost-focused by raising prices
and testing new ways to nickel and dime the consumer. However, consumers are extremely reactive to
these changes, and one company’s selfishness can be enough to run it out of
business. In many ways, recessions,
while frightening and unpredictable, cleanse the marketplace of yesterday’s
visions. Those who remain are those
willing to change.
Whether a business or an individual, change is the law of
the land. As John F. Kennedy so
eloquently stated, “Those who look only to the past or present are certain to
miss the future.” In short, every
decision one makes has lasting effects.
Cheating (even once), speaking out against those who doubt you, or
acting selfishly rather than selflessly can prove fatal for the corporation and
the individual alike.
Which modern day successes will be the Singer’s, Sperry’s
(not the shoe brand), and Esmark’s of tomorrow?
