

Why companies last? - amac
http://www.lion.co.uk/community/questions/4ef8e4a4cc20d54ddc00000f

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mathattack
I like reading Collins, but he's not much for rigor. His "Good to Great"
companies didn't stay Great.

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amac
That's broadly true. Do you agree with the general attributes of companies
that breed longevity though? I've summed them up correctly or incorrectly as
passion, leadership positon and business model.

I guess the Amundsen-Scott South Pole and others are often repeated but still,
they are well worth remembering and can be applied to business.

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mathattack
My sense is survival (as opposed to market outperformance - the subject of his
later book) comes from 2 sources: Financial conservatism and culture.

Procter and Gamble does well because of low leverage, and a culture that
values long term investment in the company's brands and people. Same with GE,
IBM and many others of the Collins list. I would add Berkshire Hathaway to the
list.

Unfortunately I find that concepts like Passion, Best in Class and Economic
Engine to be hard to measure.

One of the comments on your post had to do with innovation. It's very hard
thing to identify is what's the right level of innovation - too much and
you're chasing every fad, not enough and you're stuck in the mud like Xerox.

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amac
Agree with your thoughts on the concepts identified, very hard to measure.
(especially in terms of the balance sheet or other financial reporting)

Another example of a company that seems to manage to manage innovation is 3M.
They've got a history of unveiling innovative products each decade without
fail and have grown steadily over the years. Often under-rated IMO.

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mathattack
They were the penultimate example in the 80s and 90s, but are they still? (I
don't know the answer, but I believe the innovation machine has slowed)

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amac
Agree, innovation has slowed and for me anyway, financial innovation hasn't
quite replaced the physical type e.g aerospace.

