In 2006, Kongo Gumi., Ltd., a Japanese construction company, finally succumbed to massive debt and was acquired by Takamatsu. Ending Kongo Gumi’s 1,428 year history.
1,428 years.
As you might expect, until they fell on hard times, Kongo Gumi was the oldest company on the planet.
Founded almost 9 hundred years before Columbus set foot in Hispanola. Approximately 200 years before Beowulf was written and almost 1,000 years before Shakespeare was born
I want to build a business that lasts 100 years. That seems like a mighty long time for an 11-year-old business in a less-than-twenty-year-old industry. And when I compare it to a company that lasted almost a millennium and a half, it boggles my mind.
And makes me wonder, how did Kongu Gumi make it so long? How does a company make it even 1/15th that long?
Well, Kongo Gumi specialized in building Buddhist temples. So, I’m sure that had a lot to do with their longevity. Buddhism was already nearly 1,000 years old when Kongo Gumi started. And there’s something to be said for aligning your business with 1,000 year old traditions, with beliefs that transcend the marketplace.
And, they somehow kept it in the family for over 1,400 years. The Kongu Gumi scroll of family leadership is over 30 meters long. Sure, family squabbles have sabotaged countless companies, but blood is usually thicker than water.
Beyond that, I’m not certain. But it fascinates me.
What about your company? How long would you like it to last? Have you even considered the question? I know that most of us are too busy worrying about making payroll to think about a decade or a century in the future.
But I think, maybe on a Sunday afternoon in late winter, it might not be such a bad question to contemplate.
What makes a company last 100 years?
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Perry Marshall has launched two revolutions in sales and marketing. In Pay-Per-Click advertising, he pioneered best practices and wrote the world's best selling book on Google advertising. And he's driven the 80/20 Principle deeper than any other author, creating a new movement in business.
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12 Comments on “What Makes a Company Last 100 Years?”
The founder of swedish furniture retailer IKEA was early on obsessed with the idea to give the company eternal life. That’s the reason why he put the ownership of the stores in a dutch trust and the ownership of the brand and the concept in another trust. I think that will help it to last long, but it will not be immune to bad management.
I think they have to be in the right market that is always in demand. This business also have to be trusted and deliver excellent customer service.
They also have to own the market or at least be the go to person that specialize in that market.
Take for instant the hotel industry, its not going away. The Hilton family is King in this market as well as Mr Trump.
With that said, I am considered a mullet in a big pong of whales but because I am in the right market “hotel reservation” it should last 100 years.
Am I wrong to think this way?
Michael from http://hotellico.com – just over a month old. Its not pretty but delivers a happy feeling like a good Crumb cup cake!
Almost all 100 year businesses sell things that do not go away. Breweries and distilleries for example. And universities.
I think the vital ingredients for that 14 century run were an unchanging market and preeminence based on trust.
After the first 2 generations of solid performance they had a trust asset that could only grow stronger as time marched on. Just being there for 10 years tells your prospects you can be taken seriously. 1400 years? Well, who else would I want to build my temple?
And the implication for a 100 year plan is: how can you build a legacy of trust that will transcend changes in the marketplace and the baton passing between generations? You are passing on a vision and a philosophy as much as a value proposition. Keeping it in the family can help make sure the stakeholders stay on the same page.
My grandfather started a glass business in 1915. It has had three generations of family members running it and still continues, in it’s 99th year.
Why is it still in existence.
1. A deep commitment by an entire family whose life became the business and the business became their life.
2. A series of products and services that are timeless and always in demand. Like glass and glazing products – Inventors have tired to replace glass with other products – but always failed.
3. An ability to turn prospects into customers and customers into friends. Friends will always find away to do business, regardless of the economy, price of materials and competition.
In other words, you need 100 years of dedicated owners, who treat their employees like family.
You need a product line that is always needed and in demand. And you need customers who love to do business with you because they are treated well and you always over deliver.
Plus you need luck ( mazel ) that your kids and their kids and their kids like the business. You need luck that you make the right decisions even when you don’t know what to do. And you need luck that your entire family will support you and stand behind you when things go wrong.
Add to that at least 100 business, social, and personal skills you need to run a business, and it should be no big deal to stay in business 100 years or more!
Joel,
Right you are. It seems like an awful lot of century-long businesses are family owned and operated. Guinness for example.
If you want to have a company last 100 years you need to have superior customer service. People might buy from you initially but when they have a problem or a question they need to be able to get it taken care of in a very timely manner. You can have a great product but if the service is bad you will lose your customers.
You might think that a relentless focus on maximising shareholder value would do it. It is an explicit goal of all public and of many private businesses. But the irony is if you make this the primary goal you will be less successful at achieving it than if they start with a bigger purpose that helps customers in some way. So my first answer would be to have a non financial purpose and keep heading towards it.
There is a lot more to it. But this is a start. Focus on adding value to customers rather than extracting the most money from them or upselling them at every turn
You are absolutely right. Maximizing short term shareholder value is virtually guaranteed to run the company into the ground, sooner or later.
If you want to build a company that last 100 years, then build a company that thrives on change. Your company must be adaptable to change and welcome it. Change must be part of the DNA.
But it is not reactive change – the company needs to be proactive about change, constantly asking, “Are we ahead of the pack?”
And never be satisfied with your accomplishments. Getting overconfident has been the downfall of many companies.
Stay nimble, stay hungry, stay alert and on your toes. Listen to your employees, customers and vendors. When you think you have mastered the business, you are headed for a fall.
I watched a family business be launched by my grandfather and two partners back in the 70’s, growing strong through the next 15 years and seeming like it would never end. Unfortunately, I was front and center as we shut it down in 2006 after one of the two remaining founders went on an attempted turf grab to squeeze the rest of us out of it.
Alternatively, a friend of mine is at the helm of his family’s engineering firm now, which was started back in the late 70’s and they’re growing strong still. It’s not without challenge as he has two other partners in it that aren’t his equal, so it’s like watching him drive down the highway with one foot on the brake.
I think the biggest factors I’ve seen between the two companies that have allowed them to succeed, and what was missing to cause my grandfather’s company to eventually fail are:
1. Innovation and deal making. In both companies, they were started by guys that said “yes” to opportunities when they showed up. They didn’t overthink them and get paralyzed by the unknown.
*This was part of the reason my grandfather’s business failed. They stopped innovating and pushing for more opportunities. They had become complacent and comfortable keeping this as-is.
2. Unity and respect. My grandfather was the glue that kept everything together between him and his partners. Once he died in ’97, it all started unravelling. The remaining partners didn’t respect each other and their kids working in the company became divided against each other.
There are always market factors that can take a company out, but I think existing, profitable companies usually have the upper hand at capitalizing on the changes if they’re willing to take them.
I wonder what the 80/20 rule would show about centenarian companies?