Today, survival, from a business standpoint, is survival of the fastest.
To survive, organizations must have the ability to adapt and change very quickly as the business changes, as the technology landscape changes, as the market changes. Adaptability gives companies the ability to move quickly and be the fastest at being able to change versus competitors, and is ultimately what helps them survive.
History is littered with the corpses of businesses that failed to recognize this. From The Pony Express faced with the telegraph, to Blockbuster Video confronted with streaming video: Companies that didn’t adapt to their new reality ultimately failed. But while the need to stay ahead of market trends has always been necessary, the speed at which companies must react seems to be snowballing at a breakneck pace.
The average lifespan of companies listed on the S&P 500 has dropped over 60% since 1958. The SMB market has been hit even harder this decade, with the great recession and pandemic taking a disproportionate toll on these businesses with less capital and smaller reserves.
These last 18 months have especially exposed companies’ ability to adapt. The pandemic ushered in massive changes in business models, massive changes in the way companies had to react to change in order to be able to survive. Take, for instance, retailers. Many retailers were pummeled by this thing. Already struggling to compete in an Amazon world, the pandemic changed things in a ‘do or die’ sort of way. Stores were literally shuttered overnight and companies were forced to react to sudden and drastic shifts in both consumer behavior and business practices. Some made the transition successfully. Many did not.
What’s particularly interesting is that those retailers that were able to adapt now find themselves not just surviving, but thriving. In fact, a recent McKinsey study shows that 25 top retailers have collectively seen a 35% increase in market cap growth since February 2020. And retail isn’t the only segment where this has happened. From delivery services to telehealth, there are a number of industries that have seen innovation and tremendous growth during the pandemic.
While there is not a good measurement for adaptability, nor is is something that ever shows up in an organization’s financial reports, it may be one of the most important factors for long term survival. It is a core capability that organizations are increasingly making a priority. They are aligning people, processes and resources to more quickly respond to what’s happening in the marketplace and move their business forward.
To hear more and learn about some of the technology challenges companies are facing in this journey, you can listen to our president, Alex Heublein, and Josh Klapow discuss Survival of the Fastest in a recent podcast.