THE BLOG
01/31/2012 03:58 pm ET Updated Apr 01, 2012

Can Any Company Live Forever?

The demise of the once mighty Kodak does prompt an interesting question about whether organisations can live forever.

We often hear the term 'DNA' applied to organisations as a way of characterising their fundamental nature or to describe a component of their competitive success. But the use of this metaphor always starts me thinking about the immutable and rather uncomfortable truth that, as much as we might like to, we humans can't change our DNA, which then raises the intriguing question -- What if organisations can't actually change their DNA either and that like us, with age it becomes increasingly difficult to maintain health and vitality?

Leadership teams who do not take sufficient time to understand the true nature of their organisation's DNA and the influence it is likely to have in supporting or restraining a chosen strategic direction may create an unrealistic future vision which risks triggering an immune response from the organisation and its customers. Such immune responses are of course often quiet and hidden, gradually weakening the ability and resolve of the organisation to compete at all.

The received wisdom within management theory is that through continuous strategic innovation organisations should be able to live forever. But can this ever really be true? Experience shows that markets can evolve in such a way as to make an organisation's DNA irrelevant. In other words a time may come when the experience, product passions, market intuition, competitive drivers, values and capabilities which taken together make up the character and nature of an organisation are no longer enough to allow it to survive.

So what can we learn from Kodak? How can we ensure that our organisations maintain vibrancy and relevance in a rapidly changing environment? I would argue that an answer lies in knowing and deeply understanding the true nature of your organisation's DNA and then using this knowledge to recognise the point at which adapting your market offering is no longer enough to allow the organisation to retain relevancy and that a more fundamental form of evolution is required to ensure survival.

In these situations adaptive change such as Coca-Cola's move to healthier soft drinks, Dyson's move from vacuum cleaners to hand dryers or Nokia's move to smart phones, doesn't go far enough. There has to be recognition that the only way to survive is to create an entirely new organisation with new relevant genetic material.

As with humans the future lies in finding a partner with different, relevant DNA and with whom we can create a new powerful creature. In these situations there must be an absolute requirement to get sufficient new DNA to fundamentally change the old. Unfortunately there are too many aging organisations that remain unwilling or unable to find a partner with whom to create their next generation, choosing instead to invest in increasingly uncomfortable, inappropriate and undifferentiated adaptations to survive with I'm afraid, inevitable consequences.

But there are many examples of successful corporate evolution. Swatch was originally called The Swiss Corporation for Microelectronics and Watch Making Industries Ltd. and resulted from the merger of a leading mass market mechanical watch maker and an electronics group to produce an organisation fit for a rapidly changing technology environment. Swatch is now, the world's largest watchmaker.