Old companies have one old habit in common
What can the world’s longest-standing companies teach us about process excellence, continuous improvement and adapting to change?
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How old is your company? How long have companies really lived in this world? Whilst the human beings are able to live for about 80 years, why is it that the companies started by the same human beings do not survive that long? According to S&P 500 survey, large corporations that survived more than 60 years earlier and now have a lifespan of only 15 years.
According to Stangler a third of the Fortune 500 companies of 1970 were gone by 1983 as they were either merged with another company or acquired by some other company or simply went bankrupt (Stangler & Arbesman, 2012).
In 2026 the top 10 companies of Fortune 500 by Revenue reads as follows:
- Amazon ($716.9 Billion) – Retail & Cloud Computing
- Walmart ($713.2 Billion) – Retail
- UnitedHealth Group ($447.6 Billion) – Healthcare
- Apple ($416.2 Billion) – Technology
- Alphabet ($402.8 Billion) – Technology
- CVS Health ($402.1 Billion) – Healthcare
- Berkshire Hathaway ($371.4 Billion) – Financials/Conglomerate
- McKesson ($359.1 Billion) – Healthcare Wholesale
- ExxonMobil ($332.2 Billion) – Energy
- Cencora ($321.3 Billion) – Pharmacy Wholesale
Many of these top 10 companies have been around for quite a while and have shown consistent growth in their business both in terms of revenue as well as in terms of profit.
Interestingly, private companies with less than 300 employees and that been managed by the family have always survived much longer. Kongo Gumi which was founded in 578 AD survived till 2006. There are a lot of companies which have been in existence for several centuries particularly in Japan, Italy, Germany and France. Sumitomo was founded in 1590.
All the old companies listed above have one old habit – process orientation. They are completely driven by well defined and well laid down processes. Companies that have ensured professionalism in their approach to business have survived for several decades and even centuries. What is common in all these companies? They all have well-defined processes, and they have always reviewed their processes from time to time to align with the requirements of their customers.
As business evolved and the external environment posed challenges these companies have refined and improved their processes progressively. Markets are evolving with new opportunities and new threats and hence it becomes imperative for companies to re-engineer their processes and ensure that they are aligned well with the changing circumstances. Keeping pace with ever evolving business landscape would certainly require having well defined processes that are good for the organization. Good processes will always lead to good relationships with the stakeholders.
Cadbury had a decentralized setup prior to 1995 but decided to implement a Global ERP by adopting the clean slate approach. The ERP implementation across all the divisions is considered one of the most successful instance of Business Process Reengineering. This has helped Cadbury to unify its operations and have a well-defined process that is followed by the entire organization.
Chanel has deployed the vertical supply chain reengineering which has helped the company to have complete control over its supply chain management.
Delmonte acquired 39% stake in Decapolis (food safety service provider working entirely on blockchain technology) to radically reengineer its entire agricultural logistics process.
Saint Gobain took two years (2019 and 2020) to implement its "Transform & Grow" strategy which helped the company to remove the systemic process bottlenecks.
LEGO was losing around USD 1 million every day in 2004 and had to reengineer its processes to save the company from bankruptcy. The company adopted a "clean slate" approach to restructure the organization through Business Process Reengineering.
Managing a company in this world of high and intense competition is not easy. Business environment in which we operate is dynamic, complex, multi-faceted and impactful. The customer requirements are changing, technology is changing, and customers are well educated about the products and services available in different parts of the world.
The customers are constantly demanding only two things, viz., better products, services, solutions and better prices (better price is always reduced price). This bundle of contradictions is what the business world is living with on a daily basis. Innovation is the only way by which better products, services and solutions can be offered to customers. In order to give the better product or service or solution at a better price the companies are forced to constantly work on reducing cost of operations.
Reduction in cost of operations is possible only with improved processes. Process improvement will automatically lead to reduced variable cost and thus will help companies to offer their products and services at competitive prices.
No wonder the old established companies have always focused on improving their processes and ensuring that the current processes are well aligned with the demands of the market. These old companies have always ensured that they provide the best quality products and services to their customers. Quality is all about meeting the requirements and exceeding the expectations of the customers on a consistent basis (Dr.Juran). Aligning well with the expectations of the customers would require the company to have the right processes which are well defined and well monitored.
Does your company adopt the best practices? Are you a learning organization? Are you ready to evolve and adapt to the changing landscape of business world? In the current BANI World of Business (Brittle, Anxious, Non-linear and Incomprehensible) it is important to stay alert and build resilience. Brittleness should be handled with resilience and purpose-driven approach while anxiety should be effectively handled by Business Owners and Business Managers with brutal optimism and compassion. Non-linearity should be handled by agility and adaptability and incomprehensibleness can be handled only through collaboration.
It is important for business owners/managers to constantly look for signals that calls for a review of the business processes. These signals could come from change in customer requirements, change in technology, change in government regulations, change in business model, change in product portfolio, etc. When there is a need to review the business processes then it is better to follow the 5 Steps listed below:
Step1: As Is process mapping – Map the current processes to get a clear understanding of how the process flows.
Step2: Identify the gaps in the current processes to meet the customer requirements and to exceed the expectations of the customer.
Step3: Draw "To Be" Process map that is practical and is aligned with the DNA of the company.
Step4: Get a sign off by all the concerned departments on the "To Be" process and implement it.
Step5: Closely monitor the new process and ensure that it is working well on the ground.
Old habits and old methods are time-tested and have proven over a very long time that they work well and give the best results. In business the most successful outcome in any industry in any geography is "Happy Customers". If the customers are happy, they will keep buying the products and services from the company. To ensure that the customers are happy, companies must meet the requirements and exceed expectations of the customers on a consistent basis. Continuous review of processes and timely improvement of processes is very important to keep the customers happy and thus ensure longevity of the company and its business.
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