g-f(2)58 “THE BIG PICTURE OF THE DIGITAL AGE”: Big companies used to have a lifespan of 61 years (1958), it’s now down to 18 (2016)

Extra-condensed knowledge

• A recent study by McKinsey found that the average life-span of companies listed in Standard & Poor’s 500 was 61 years in 1958. Today, it is less than 18 years. McKinsey believes that, in 2027, 75% of the companies currently quoted on the S&P 500 will have disappeared.
• Large companies need a continuous input of more and more management energy simply to remain in existence. The larger the company, the more energy it needs … to survive. In short, large companies spend more time managing themselves than they do managing their clients.
• As the life expectancy of companies drops, ours is increasing. Since the beginning of the century, 50% of the children born in advanced economies can expect to leave up to 100 years old. 
• The new generation, the Millennials, will probably have to work longer and will do a lot of job hopping during their lifetimes.

Genioux knowledge fact condensed as an image

Category 2: The Big Picture of the Digital Age

[genioux fact produced, deduced or extracted from IMD]

Type of essential knowledge of this “genioux fact”: Essential Deduced and Extracted Knowledge (EDEK).

Type of validity of the "genioux fact". 

• Inherited from sources + Supported by the knowledge of one or more experts.

Authors of the genioux fact

Fernando Machuca

References

Why you will probably live longer than most big companies, Stéphane Garelli, December 2016, IMD.

ABOUT THE AUTHORS

Stéphane Garelli is Professor Emeritus of World Competitiveness at IMD and Professor at the University of Lausanne.

He has founded the IMD World Competitiveness Centre and has pioneered research in this field for 30 years.

Professor Garelli is closely connected to the world of business. He is, among others, Chairman of the Board of Directors of "Le Temps", the leading French language Swiss newspaper. He was formerly Chairman of the Board of the Sandoz Financial and Banking Holding, and member of the board of the Banque Edouard Constant.

Professor Garelli was the Managing Director of the World Economic Forum and of the Davos Symposium for many years. For twelve years he was also permanent senior adviser to the European management of Hewlett-Packard.