Speed of change is important because the average lifespan of an organization is getting shorter: from 60 years around 1950 to 18 years around 2010. The challenges for companies differ per stage of life.

1. © CGI Group Inc.
The life span of companies in 4 stages
and the resilience of large companies
Leon Dohmen
Co-author: Clemens van den Broek

2. Digital transformation and companies' resilience
Dutch Chamber of Commerce:
https://www.kvk.nl/download/Jaaroverzicht%20Bedrijfsleven%20Nederland%202016%2
0versie%20US7_tcm109-433766.pdf

3. Companies’ life span: 0-5 years (starter)
• 40% does not survive
• 2 times more stoppers compared to large companies
• Strategy: Specialized offering of products / services
• Top 3 Issues
1. There is no need for their product
2. There is a lack of money
3. They do not have the right team
• Remedy for small companies to stay alive: rapid growth

4. Companies’ life span: 5-15 years (fast grower)
• 2015: 7.500 fast growing companies in the Netherlands
• 1 out of 400 companies becomes a fast growing company (‘Gazelle’-
company)
• Strategy: Specialized offering of products / services
• Unicorns: Hyper growth (> 1 Billion USD (estimated) value)
• E.g. Uber (‘Born’ in 2009, 9 years old)
• Services built on software and assets (of others)
• https://en.wikipedia.org/wiki/List_of_unicorn_startup_companies
• Absence of Dutch and European companies

5. (Fast) growing companies: ‘Agile’ properties
1. Constantly working on ideas and possibilities for improvements (1.2
Creativity)
→ “Improve every day” or “making the world a bit better every day”
2. Assess and decide on promising ideas and possibilities (1.4
Transforming ideas into value)
→”Everyone should participate, but the entrepreneur (CEO) decides”
3. Focus (specialization) and do not give up (2.2 Motivation and
continuation)
→”Overcoming disappointments”
4. Homogeneous and performance-oriented culture (2.5 Mobilizing others)
→ Wolf pack
5. Despite doubts and uncertainty, belief in the company and
entrepreneurship (3.3 can deal with uncertainty, ambiguity and risks)
→ Financing with own resources
6. You learn to do business by doing it (3.5 Learning through experience)
→ Importance of education is limited
http://publications.jrc.ec.europa.eu/repository/b
itstream/JRC101581/lfna27939enn

6. Companies’ life span: 15-40 years (consolidator)
• 21% of companies achieves the age of 20 years
• Coolblue (19 years): Online and physical shops
• Strategy: Diversified offering of products / services
• Top 5 S&P Capital IQ – per April 2017
1. Apple (41 years) – 741 billion USD
2. Alphabet/Google (20 years) – 585 billion USD
3. Microsoft (42 years) – 505 billion USD
4. Amazon (23 years) – 432 billion USD
5. Facebook (13 years) – 408 billion USD
(https://itexecutive.nl/data-en-digitaal/data-driven-bedrijven-veroveren-de-wereld/)

7. Companies’ life span: 40-… years (life for the long
term)
• “Don’t put all your eggs in one basket”
• DSM, Philips, Shell, Ahold, Samsung, Siemens
• Average age AEX-companies is 70 years, a large number > 100 years old
• Strategy
• Diversified offering of products / services
• ‘Small inside big’ → autonomous responsible units
• Properties:
1. Systematic divestment and investment decisions
2. Consistent portfolio strategy
3. Lean organizational structure with clear responsibilities
4. Managing and supervising initiatives from the (higher) board of directors
5. Rotating management and skills development (supported by incentives)

8. Grasping it all together: Ingredients for companies to
stay healthy and successful
1. Steering and the role of senior management: This involves seeing
opportunities and possibilities for improvement. Senior management
is involved in and supports change, assesses risks well, is decisive
and determines the direction of the organization.
2. The homogeneous and performance-oriented work culture: Action-
oriented approach, measurement of performance and learning by
doing is an important ingredient.
3. The (relatively) simple, flat and flexible organizational structure: Large
organizations are able to maintain this simplicity and flexibility by
organizing themselves in smaller units with their own (result)
responsibility. https://www.managementsite.nl/veerkracht-grote-organisaties-1
https://www.managementsite.nl/veerkracht-veranderkracht-grote-organisaties

9. Questions?/Remarks!